1944-07-20

Mr. SPEAKER:: I have the honour to inform the house that I have received the resignation of Pierre Gauthier, Esquire, as member for the electoral district of Portneuf. I have accordingly issued my warrant to the chief electoral officer to make out a new writ of election for the said electoral district.



CANADIAN FIRE FIGHTERS


[Stage Direction]
Hon. L. R. LaFLECHE (Minister of National War Services): Mr. Speaker, may I inform this hon: house that a detachment made up of volunteers from the corps of Canadian fire fighters now in the British isles has been organized for service on the continent of Europe in support of our invading armies. The Canadian detachment will work with the national fire service of the United Kingdom. The authorities in Great Britain have requested that no information be given out as to the strength of the detachment.
It is with very much regret that I must announce that three members of the corps are recent casualties: one, senior fireman John Stewart Coull of Winnipeg, Manitoba, has been killed, and leading fireman John Robert Cook Leguee, also of Winnipeg, and senior fireman Joseph Antoine Willie Cassidy, of Oampbellton, New Brunswick, seriously

Disturbances at Petawawa Camp
injured by enemy bombs somewhere in England. The next of kin were informed some few days ago and the names of the injured men have since been taken from the seriously injured list.


Hon. J. L. RALSTON (Minister of National Defence):: Perhaps this is the proper place for me to make a correction in the statement which I made in answer to the question asked by the Leader of the Opposition (Mr. Graydon) on July 10 with respect to disturbances at Petawawa. At the time I answered my hon. friend I found his question on my desk when I came into my office, and I went immediately to the telephone and got the information from the officers at headquarters. They gave me the information which I immediately gave the house in answer to the question. I now have the proceedings of the court of inquiry and the report of an investigation conducted by the officers of the department whom I directed to be sent to Petawawa, and I very much regret to find that the information I gave the house was not accurate.
I said that at the training centre commanded by Colonel Johnston the only disturbance in recent days had taken place about three weeks ago. I find, in fact, that there had been tw'o disturbances on successive nights; one on June 25 and the other on June 26. The incident on June 25 took place around nine o'clock that evening. A large group of approximately one hundred and fifty men had gathered close beside the canteen and there was some argument between some unidentified persons. I mention that particularly because I stated to my hon. friend that there were only two men involved in each case. The officer tells me that there were only two men involved in the fight, but at the same time I did not have the information that there was a crowd in addition to that. Hebert, a witness, states that he saw a scuffle and noticed a sergeant and a couple of other ranks lying on the ground. None of these has been identified. Another witness, Peters, a coloured man and a boxer, says he saw a few men "pick on" the sergeant. This latter witness did not know what the argument was about but he decided to participate in the scufile in order to help the sergeant, and he got into the fight and says that the crowd was arguing whether he was fighting for the general service or the N.R.M.A., and that he said he was not on 100-321
either side-all he wanted was fair play. Hebert, who had been acting as a regimental policeman, called the provost who intervened. The scuffle stopped almost immediately and the crowd moved off.
About twenty minutes later it appeared that a man named1 Dussault insulted! Hebert, the acting regimental policeman. There had been bad blood between them in the past arising from personal differences. No fight ensued, as friends on both sides stopped them. However, tempers had risen and Dussault incited the soldiers who were still there to get after Hebert; the latter and; two of his friends ran for safety in an office nearby. Most of the crowd followed and the office door was forced open and the upper panel broken. Hebert and his friends escaped by the window. At this time the crowd had increased and there were approximately two hundred men milling around. The regimental sergeant major and some senior non-commissioned officers arrived, ordered the men to proceed to their huts, which they did, and when the orderly officer arrived immediately afterward everything was under control. Hebert, one of the escaping men, reported to the medical inspection room with a lacerated nose. Dussault was the. only man identified in the group which forced the door, and he was disciplined. I may say as a matter of fact that Dussault was just back from embarkation leave. I think he is now overseas. Both Hebert and Dussault were general service men.
The second incident was about nine-thirty the next night. It is substantially as I stated last week. Two men, both general service soldiers, had been doing some drinking and got into an altercation but did not come to blows. A group of about fifteen soldiers got around them, and when the orderly officer ordered .them to break up they did so immediately. A little later a crowd of about fifty had gathered, apparently waiting for something to happen. There was some argument going on but no fight. After the canteen closed there would be probably two hundred' men around. The orderly officer was in the vicinity from nine-thirty onwards. He saw the men in their huts and the lights out. He stayed around until about eleven o'clock and when he left everything was quiet.
These are the incidents at training centre A-l commanded by Colonel Johnston. I had said there was only one disturbance, but as I have just indicated, there were disturbances on two different days. As I mentioned to the house, there had been an incident some time ago at training centre A-2. I said it was

Disturbances at Petawawa Camp

about two mouths ago. As a matter of fact it was on April 9, over three months ago. I said on the tenth that the rumour was that there was a fight between a general service and N.R. M.A. soldier. I find now that what happened was that a general service soldier got into a dispute with another general service soldier as a result of some objection he made to singing in French. He was ejected from the wet canteen by regimental police. It was just closing time, and after the crowdl had left the canteen they gathered outside. There was some shouting and noise which attracted men from the neighbouring huts. A crowd gathered, estimated at about a hundred and fifty men. The regimental sergeant major came on the scene and ordered the men to disperse, which they did. No one was injured, there was no fighting and no property damage.
It should be noted by the house that a crowd of two or three hundred men would not be at all unusual at canteen closing time in a large camp like Petawawa, where there are between nine thousand and ten thousand men.
The officer af Camp Petawawa who gave the information which I gave to the house explains the incompleteness of the telephone information on the ground that he had not then seen the proceedings of the inquiry. I would like to repeat that I received the question of the leader of the opposition only a few minutes before the opening of the house, and in my desire to answer promptly I immediately telephoned my officers here who gave me the information which I forthwith gave the house. This information had been forwarded to headquarters by telephone from Petawawa, and contained nothing showing that any crowd had been involved in the incidents referred to.
I should like to say to you, Mr. Speaker, that general service and N.R.M.A. personnel have been training together in probably seventy-five camps and schools all across Canada for over three years. There has been remarkably little in the way of friction. I think both the officers and the men are entitled to great credit for the way they have carried on.
In Petawawa, which is our second largest camp in Canada, there are more differences to be taken account of than in any other camp in the dominion. We can hardly expect that there would not be strained relations at times between N.R M.A. and general service personnel, but that is not by any means the only possible cause for quarrels, especially in camps of that size and where so many differences of various kinds exist. I am not going to minimize these episodes, but on the other

hand I do not think that we should add to the difficulties of loyal and faithful officers and staff who have to deal with men of all sorts and make them soldiers by undue emphasis on incidents like these, which might occur in any camp, especially around canteen closing time. I think the Petawawa camp has made on the whole an excellent reputation for order and for good work, and I am sure that both officers and other ranks want to help to keep it that way. I would ask the house and the country that we try to leave them to do it.


Mr. ORUICKSHANK:: Will the coloured
soldier get a medal?


James Layton Ralston: He may get the golden
gloves.


Mr. GRAYDON:: He went to the rescue
of the sergeant, did he not?



DISTURBANCES AT CALGARY

James Layton Ralston: I noticed a report in the press of a disturbance at Calgary R. C. Camp, and I expect to be asked a question by the leader of the opposition (Mr. Graydon) with regard to it. A wire has been sent to Calgary with reference to it. Having this lesson about giving information prematurely I am not going to give my hon. friend any answer because I have not any information other than that which is contained in the newspapers. Just a flash came in on this incident and a request was made for a full report. That will be given in due course.


Mr. POULIOT:: The Canadian Press carries a dispatch that there was an active army-draftee clash involving a hundred and fifty men in Calgary. I would ask the government if they are willing to have this matter investigated by someone from Ottawa and if they will consider the policy of separating the active service personnel from the draftees in the different camps.


James Layton Ralston: I have already indicated that I was making inquiries in connection with the matter, and I will make a report as soon as I can.



ACCIDENT AT MOUNT BRUNO RANGES ON JULY 6

James Layton Ralston: May I refer to another question which the leader of the opposition (Mr. Graydon) asked me on July 10 with regard to the tragic accident at Mount Bruno. Immediately the accident occurred two things were done. The attorney general of the prov-

Disturbances at Calgary
ince of Quebec was notified; it was indicated to him that a court of inquiry would be held, and he was given the opportunity to have a representative at the court of inquiry. At the same time the coroner was notified. As a matter of fact the coroner did hold a coroner's inquest in respect of the twelve cases in which,, most regrettably, fatalities occurred.
The finding of the coroner's inquest in all twelve cases was as follows:
Concerning the death of 

 age - years,
domiciled at

; which death happened on the

 day of the month of

nineteen hundred
and forty-four at Montreal, a report haying been made to this court, an inquest was held by me on the 8th of July of the said year, and after having heard the relatives of -the deceased,
*the witnesses, and Doctor 

 who declared as
cause of the death 

And then comes the actual injury suffered by the deceased whose name is mentioned in the finding-
I came to the conclusion that the said 

died of a violent death; that this death was not imputable to the crime of whomsoever, neither to the negligence of anybody; that no crime accompanied or preceded this death, and there was no necessity to hold an inquest before a jury. In consequence, a verdict of an accidental death was rendered.	[DOT]
Pierre Hebert,
Joint Coroner of the District of Montreal.
This is simply the finding of the joint coroner of the district of Montreal.
A full opportunity was given the civil authorities to investigate the matter, and that finding was rendered in all twelve cases. As a matter of fact the findings in four of the cases were forwarded here a few days ago, and I think the remaining eight were received here yesterday.
May I now proceed to the matter of the court of inquiry itself. The attorney general replied on July 7 to the notice we gave him. The reply is as follows:
Your message received re inquiry on death of soldiers accidentally killed at Mount Bruno. Coroner having made an investigation not felt necessary to send representative to attend military court of inquiry.
This is signed by Mr. Cantin, K.C.
The qualifications of the members of the court were these: Major A. T. Stikeman belongs to A.48 basic training centre, artillery, stationed at St. Johns, Quebec. He has had much experience in courts of inquiry during the past two years, and has been eighteen years in commissioned service. Major J. H. Rankin is a permanent force soldier who enlisted in the R.C.O.C. in 1936 and qualified as an ammunition examiner in 1938. He was recommended by the officer commanding
Longue Pointe ordnance depot as being an expert ammunition man, the best available. Captain B. W. A. Allison is attached to A.12 infantry training centre. This officer belongs to the unit concerned. He has had four years' service in the present war and is a graduate in arts of the university of Edinburgh. In civil life he was assistant branch manager of a textile firm. He has had previous experience on courts of inquiry, and is well spoken of.
The court held a number of sittings-I do not know the number of witnesses, but it was a very large number.
I am now in a position to tell the house of the circumstances surrounding this unfortunate accident which took place at Mount Bruno Rifle Ranges, Mount Bruno, Quebec, on July 6, 1944.
The proceedings of the court of inquiry have been received and perused. The information disclosed is substantially as follows:
On July 6, 1944, a detachment of the specialist company, Canadian infantry training centre at Farnham, province of Quebec, went from Farnham to Mount Bruno ranges ta give a demonstration of mortar firing to personnel of Farnham at that time at the battLa drill camp at Mount Bruno.
The demonstration was supervised by an experienced mortar officer and a staff sergeant who had had long experience in firing 3-inch mortar.
The crew were picked men from a group of twenty-seven who had recently completed a qualifying course.
The 3-inch mortar used for the demonstration had been inspected by technical personnel of the army on the evening of the previous day and found in a clean and serviceable condition. The evidence does not indicate any use of the mortar between the time of the inspection and the demonstration.
The ammunition (mortar bombs) had been drawn that morning from the stores of the training centre at Farnham and had been obtained previously through ordnance at Montreal. This ammunition had been inspected in May, 1944, and found serviceable.
At 1120 a.m., a couple of hours before the actual demonstration, which took place at
1.45 p.m., a further check was made of the weapon and ammunition by the detachment commander of the gun crew and the members of the crew.
At the time set for the demonstration personnel under training at the battle drill camp,, consisting of 105 all ranks, were paraded to the site of the 3-inch mortar and took up positions from twenty-five to thirty feet from the mortar. They were placed as a company, in
Disturbances at Calgary

threes, in a semi-circle to allow every man to see what was going on. Four bombs were fired successfully; No. 2 of the gun crew was then seen placing the fifth bomb in the barrel of the mortar, whereupon a terrific explosion was heard and a large red flash was seen as well as black smoke at the site of the gun position. The gun crew were killed outright and a number of those watching the demonstration were wounded.
_ Medical assistance, both military and civilian, was immediately requested by telephone, and a Roman Catholic chaplain from the St. Hubert airport was called. There was a qualified medical orderly with a first aid kit on duty with the troops. Unfortunately he was one of those injured.
In the meantime all able personnel of all ranks administered first aid to the injured and field and shell dressings carried by all of the men as a part of their personal equipment were iused in addition to medical supplies furnished by the range caretaker. The court in its finding commended all ranks for their cool-headedness and intelligent care of the wounded.
Two civilian doctors were on the scene of the accident within twenty minutes after - the explosion but because of the adequate first aid already given found that only the administering of sedatives was required1.
I think I saw at one place where they had readjusted some temporary bandages as well. I do not wish to be tied down to that, but I believe I did see that-that they had rearranged the bandages. Ten minutes later the parish priest of Mount Bruno arrived with a Cistercian Father and administered religious rites to the dying. Ambulances and army medical personnel arrived about forty-five minutes after the blast, and the wounded were driven to various hospitals in Montreal immediately thereafter.
I very much regret to report that the casualty list at present is: 7 killed; 5 died of wounds; one critically injured; 16 severely injured, and 16 injured. One civilian, the caretaker, was injured.
The evidence establishes that the explosion took place in the base of the mortar, and the court so found.
It was impossible to establish conclusively from the few fragments of the bomb which were found that the bomb which exploded was defective. However the evidence indicates that the explosion was not due to any defect in the mortar itself or to improper technique on the part of the crew in loading the mortar. The elimination of these two possible causes of the explosion supports the explanation that
{Mr, Ralston.]
the cause was a defective bomb and the court so found.
All ammunition of this batch is impounded and will be returned for examination by X-ray.
That is the very terse report on the situation. It is all I am able to report at this time, with this addition, that I do wish to express my most profound regrets for the accident, and my deep sympathy to the bereaved families of the victims of this most unfortunate episode.
I can say to the house that as soon as this ammunition is X-rayed, if we find there is anything wrong with it I shall make a further report. As I understand it, this is ammunition of a certain fuse series, and that is all being taken and being retested.


Gordon Graydon: Since the war started have there been any similar incidents or accidents of this kind?


James Layton Ralston: I can only say to my hon. friend that I cannot remember any-grenades, sometimes, but not bomb mortars.



QUESTIONS

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


Mr. DIEFENBAKER:: 1.	How many men in the home defence army
are in receipt of trades pay in addition to their ordinary pav?	.	,	,	,
2.	How many have been given trade courses' 3 How manv are non-commissioned officers?


Mr. MACDONALD (Halifax):: 1 and 2. Information is not available at National Headquarters as to the number of N.R.M.A. personnel receiving trades pay nor as to the number who have been given trades courses.
As at June 7, 1944, the number of N.R.M.A. qualified tradesmen exclusive of those on long term leave was 9,698.
3.	Exclusive of those on long term leave the number of N.R.M.A. personnel who were confirmed or acting N.C.O.'s. of the rank of corporal and above as at June 7, 1944, was 3,353.


PRISONERS OF WAR-MERCHANT SEAMEN- INCOME TAX
Mr. ISNOR:: Are Canadian merchant seamen held as prisoners of war liable 'to, (a) national defence tax arrears; (b) income tax?


Mr. GIBSON:: (a) Yes; (b) yes.


ARMY TECHNICAL DEVELOPMENT BOARD
Mr. KNOWLES:: 1. What is the personnel of the army technical development board?
2 What remuneration is paid to each ot the members of this board for their services in connection therewith?


Mr. MACDONALD (Halifax):: 1. The members of the board are as follows:-
Major-General J. V. Young (M.G.O.), CUE. (Chairman).	.
Major James E. Hahn, D.S.O., M.C. (Director General).
Prisoners oj War

Brigadier G. P. Morrison (D.M.G.O.), C.B.E. (Deputy Chairman).
H.	J, Carmichael, Esq., Department of Munitions and Supply. (Coordination of Production).
R. E. Jamieson, Esq., Department of Munitions and Supply. (Director General, Army Engineering and Design Branch).
C. J. MacKenzie, Esq.-Acting President, National Research Council.
2. None of the members of the army technical development board receive any remuneration whatsoever for their services as members of the board.
QUESTION PASSED AS ORDER FOR .	RETURN


ASSISTANCE TO COAL COMPANIES
Mr. GILLIS:: I.	Has any amount of money .been paid by way of subsidy or other assistance, .for the period from January, 1943, to June 30, 1944, to (a) Acadia Coal Company, of Nova Scotia; Ob) Minto Coal Company, New Brunswick; (c) Welton Coal Company, New Brunswick; (d) Gerald King Coal Company, New Brunswick?
2. If so, how much to each of the above-mentioned companies?



JUDGES ACT


[Stage Direction]
Hon. L. S. ST. LAUR'ENT ('Minister of Justice) moved that the house go into committee at the next sitting to consider the following resolution;
That it is expedient to amend the Judges Act to provide that a judge of the Supreme Court of Canada, the Exchequer Court of Canada or o.f any superior court, county court or the circuit court of the district of Montreal, may elect, in lieu of a pension or annuity as presently authorized under the said act, to divide his annuity so that his wife will receive an annuity equal to one-third thereof, and that if he should die m office his widow will receive an annuity equal to two-ninths or one-ninth, in certain cases, of his salary.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, I should like to
direct a question to the Prime Minister rising out of a report in the press with respect 
to a forthcoming united nations meeting scheduled to take place, I presume, some time in August. Will the British commonwealth and empire have representation at this meeting?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: There is no meeting of
united nations scheduled to take .place. What the hon. leader of the opposition evidently refers to is a meeting of the four great powers, to take place at Washington, in accordance with what was forecast in the Moscow declaration. The purpose of the meeting is that these four powers may consider the development of a general plan of world security. There will be only the four powers at the meeting.


Gordon Graydon: When the Prime Minister refers to. the four powers, do I understand that the British commonwealth is included in those powers, or is it just the United Kingdom?


William Lyon Mackenzie King: The four
powers are the United Kingdom, the United States, the U.S.S.R. and China.



PRISONERS OF WAR


[Stage Direction]
On the orders of the day.
Gordon Graydon: Sir James Grigg, the war secretary, is reported to have stated in the British House of Commons on Tuesday that German captors had shot thirty-three more allied prisoners of war. I would therefore ask the Prime Minister to inform the house whether or not any Canadians were included in this latest nazi crime, and if so, what steps the government is taking in connection with the matter.


William Lyon Mackenzie King: The government has no
information at the present time with respect to Canadians. The matter is being inquired into.


William Lyon Mackenzie King: When the
leader of the opposition asked me a question a moment ago in connection with the statement made by Sir James Grigg in the British house on Tuesday I had in mind some statement that Sir James Grigg may have made in reference to a recent matter. It may be and it probably is the fact that the question my hon. friend asked refers to some matter that has been or is being inquired into very care-

Labour Conditions
fully. 1 am not in position to give information at the moment but I hope to be able to do this a little later on.


Gordon Graydon: May I say to the Prime Minister that my question was founded upon a press report emanating from London, I think on Tuesday, and which purported to describe a debate which had taken place in the House of Commons or at least some statement that the ministry had given. These thirty-three additional allied prisoners of war which are alleged to have been shot were not included in the forty-seven which were previously the subject of discussion both in this and the British House of Commons. I understand that this is a new incident and perhaps this will indicate to the Prime Minister exactly the situation as I understand it.


William Lyon Mackenzie King: I will have to look carefully into Sir James Grigg's statement.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Clarence Gillis: Mr. Speaker, I should like to direct a question to the parliamentary assistant to the Minister of Labour. Recently two members of the industrial cooperation board, Messrs Carl Goldenberg and M. M. Maclean, visited Nova Scotia to obtain first-hand information of the disabilities affecting the mining industry, and also for the purpose of setting up industrial production committees. Is the parliamentary assistant in position to report to the house as to the success or otherwise of that visit?


Mr. PAUL MARTIN (Parliamentary Assistant to the Minister of Labour):: Mr. Speaker, the hon. gentleman gave me notice yesterday of his question, and in reply I wish to pay that in May and June, 1944, the industrial production cooperation board concluded agreements between the coal operators of Nova Scotia and district number 26 of the united mine workers of America for the formation of joint labour-management production committees in each mine and 'for the purpose of discussing all possibilities of improving and increasing coal production.
Following these agreements, Mr. H. Carl Goldenberg, chairman of the board, summoned a conference of the coal operators and of the miners to be held in Sydney, Nova Scotia, on July 12 and 13, with a view to inaugurating the joint production committee and to discuss
all aspects of the problems responsible for the decline in coal output, as well as possible means of increasing output.
Mr. Goldenberg and Mr. M. M. Maclean, a member of the board, proceeded to Sydney for these conferences. The conferences were attended by a large representation of both operators and miners. The conferences were marked by a full and frank discussion of the problems facing both operators and miners in the Nova Scotia coal mining industry. The discussions led to a clarification of a number of issues, and to a better understanding of mutual grievances.
The principal agreement reached at the conference was that both operators and miners undertook immediately to consider all causes, such as absenteeism, presently interfering with maximum coal production, at meetings of the joint production committees, the first of the series being held on Monday of this week, July 17. It was further agreed that meetings of these committees are to be held twice every month at each mine, and that the operators and the miners would submit for consideration to each meeting problems affecting coal production as each side sees them, together with recommendations for solutions or improvements. Each side also undertook to give immediate consideration to all recommendations, the operators to put such recommendations as are acceptable and feasible into effect as soon as possible, and the union to urge its members to act accordingly. Reports of these meetings and of the progress made are to be submitted regularly to the industrial production cooperation board, which will continue to assist in the operations of the committee in so far as is necessary.
The conference also discussed the recent closing down on Saturday morning of the two mines, number 4 and 11. The company advised that it was considering reopening these mines on Saturdays if the rate of absenteeism was reduced. Before the termination of the meetings the miners were advised by the Dominion Coal company that these two mines would be open on Saturday, July 15, and on that day they were open for work.
It is anticipated as a result of these conferences, and more particularly of the functioning of the joint production committee, that coal production problems will receive more immediate, more careful and more serious consideration. They will be considered both at the level of the mine production committee and of the district production committee, the latter covering a number of mines. H both parties show the good will and cooperation which they showed at the conferences attended



Labour Conditions
by Messrs. Goldenberg and MacLean, there should be an improvement in the coal situation,. The industrial production cooperation board now has this matter in hand, and will follow up on the conferences as the situation requires it.
I may say the conferences in. Nova Scotia are in accordance with the policy laid down by the government sponsoring the formation of labour-management production committees in industry. A large number of these committees are now functioning across Canada, and the staff of the industrial production cooperation board is constantly engaged in setting up more of these committees. Not only in the coal mines, but in all industry, joint production committees should constitute effective machinery for the discussion and solution of production problems by labour and management on a democratic basis.


Clarence Gillis: I want to thank the parliamentary assistant for the very comprehensive reply he has given, and I also want to compliment the department for the realistic action they are taking at the present time in connection with this matter.



NATIONAL WAR LABOUR BOARD-APPLICATION OP STANDARD RAILWAY LABOUR ORGANIZATIONS

[Stage Direction]
On the orders of the day:
Mr. J. W. NOSEWORTHY (York South):: I wish to direct a question to the parliamentary assistant to the Minister of Labour. Will he tell the house when an announcement may be expected from the national war labour board regarding the case of the standard railway labour organizations whose application went to the board in September, 1943, and who were heard by the board in May, 1944?


Paul Joseph James Martin: The hon. gentleman gave me notice of his question. While it is not possible to give the hon. member any specific date on which the decision of the national war labour board on this case will be made known, I can assure the hon. member that the national war labour board has this matter under active consideration. I should like to say further that this is a complex case involving detailed and careful analyses of wage rates and related matters. I should like to point out that the delay which is apparent in the date cited by the hon. member in his question has arisen from two factors. In the first place, a large amount of time was consumed by the applicants and respondents in the preparation of their extensive briefs following their application to the board in

September,, 1943. In the second place,, extensive analyses have been necessary since the board heard the application in May of this year, which hearing followed promptly upon the receipt of all necessary briefs.
The board has the matter in hand and hopes to give its decision as soon as possible.



PACIFIC CONFERENCE


[Stage Direction]
' On the orders of the day:
Mr. R. W. MAYHEW (Victoria, B.C.):: Mr. Speaker, I should like to direct a question to the Prime Minister. I regret I have not sent him previous notice of this question, but I believe it is of such a nature that the answer will not require any preparation. It was announced over the radio last night that Prime Minister Eraser had said that a conference would be held in the Pacific between the United States, Australia, New Zealand and Great Britain to consider the best method of prosecuting the war in the Pacific. Will Canada be represented at that conference?


William Lyon Mackenzie King: When the Prime Minister of New Zealand spoke in this chamber he intimated that he hoped that such a meeting would be held in New Zealand, but he was unable to say at that time whether or not it would be held. I have no information beyond what my hon. friend has had over the radio with respect to the possibility of the meeting taking place. I assume that what the Prime Minister of New Zealand said in New Zealand was similar to what he said here. I think I would have heard if there had been any definite decision with respect to the time of a meeting.



QUEBEC ELECTION


[Stage Direction]
On the orders of the day:
Hon. H. A. BRUCE (Parkdale):: Mr. Speaker, I desire to direct a question to the Minister of Justice. In view of the statement made by Jacques Sauriol at a public meeting in Montreal on July 9 last that the English soldier is, "the rottenest of the earth and it is necessary for Canadians to fight England's battles and be killed instead of the English in the Caen inferno" and that "we will use every means-and I do not say legitimate-we will use every means necessary to halt this drainage of our young toward the charnel house of

Quebec Election
Europe," I ask the minister if Jacques Sauriol remains at large, free to campaign against the nation's war effort? If so, will the minister say what steps he has taken or proposes to take in the circumstances? This is a clear violation of the defence of Canada regulations.
Hon. L. S. ST. LAURENT (Minister of Justice): I was not aware that the hon. member was present at the meeting and can testify as to the accuracy of the newspaper report of what took place in Montreal. I saw the report when it >
was published in a newspaper, but feeling that a newspaper report was not evidence upon which any action could be founded I immediately instructed the Royal Canadian Mounted Police to make an investigation to ascertain whether dr not evidence of the statements attributed to Jacques Sauriol in the report could be adduced. I returned to Ottawa last night from an international conference. Prior to my departure on Saturday I had not had a report from the Royal Canadian Mounted Police beyond the preliminary report that the matter was being investigated. Since my return I have not had an opportunity to confer with the deputy commissioner to see if evidence has been found of the accuracy of this report, but I expect as soon as I have a few spare moments to get a further report from the deputy commissioner.


Mr. HANSON (York-Sunbury):: And if it is correct will you lock the man up?
Mr. ST. LAURENT: Mr. Speaker, I do not think I should answer that question. here. If the report is correct, the seriousness of the situation will have to be considered and appropriate action will have to be taken.


Herbert Alexander Bruce: May I remind the minister that this statement is very similar to the nazi propaganda broadcast in English from Berlin to Canadian listeners.


Mr. CHURCH:: Am I to understand that the provisions of the. defence of Canada regulations and of the mobilization act have , been suspended during the holding of provincial elections in the various provinces?
Mr. ST. LAURENT: I do not think it is necessary for me to say that they have not been, to my knowledge.


Thomas Langton Church: Then why are they not enforced?


Gordon Graydon: May I direct a question to the Minister of Justice arising out of what my hon. friend has said? On Tuesday I put a question to the minister but I found that he had been away on official business, as he has said today. I do no more than bring to his attention the question I then asked with
100-322i
respect to certain remarks made by a candidate in the Quebec provincial election, and ask for an investigation by the Minister of Justice. At the same time the minister might also look into an incident which occurred in Lethbridge during another provincial election where some people took the law into their own hands. We ought to have fairness in these matters, and perhaps an investigation can be made by the Royal Canadian Mounted Police into that incident.
Mr. ST. LAURENT: I am not sure that it would not be appropriate to remind hon. members that the administration of justice and peace and order in ordinary circumstances are the responsibility of the provincial authorities. If I were to attempt to have investigated by a dominion agency every brawl which may occur, I would be very soon charged with meddling with affairs that ape no concern of mine.


Gordon Graydon: May I say to the minister that I suggested the Royal Canadian Mounted Police make the investigation because they would be a neutral body.


Thomas Vien: The questions (hat are being asked to-day are far beyond what questions should be on the orders of the day-They must be with respect to matters that are urgent.



DIAMONDS


[Stage Direction]
On the orders of the day:
George Alexander Cruickshank: I should like to direct a question to the Minister of Finance. I am particularly interested in preventing inflation and in keeping down the cost of living, and I think this matter has a bearing on the cost of living. According to release 0907 of the wartime prices and trade board, under date of July 20, owing to the fact that importers are having a great deal of difficulty in transacting business in diamonds, the board have under this date authorized a mark-up of from fifteen to twenty per cent in the price of the larger diamonds. Is this action of the board to prevent inflation, or to keep the cost of living down?


Hon. J. L. ILSLEY (Minister of Finance):: Is the hon. gentleman referring to strawberries or diamonds?


George Alexander Cruickshank: Diamonds.


James Lorimer Ilsley: I will make inquiry.
Succession Duty



FARM MACHINERY


[Stage Direction]
On the orders of the day:
Mr. J. W. BURTON (Humboldt):: I wish to direct a question to the Minister of Finance, notice of which was sent to his office yesterday. Is the report correct that the wartime prices and trade board has set September 30 as the date when the new prices on repair parts for farm machinery are to go into effect? I wish to draw to the minister's attention the fact that this year more than ever before will the farmers have to buy enormous quantities of repair parts.


Thomas Vien: Order. The question has been asked.


James Lorimer Ilsley: The hon. member gave notice of his question which reached my office yesterday but I would :ask him to allow me another day in which to ,get full information in regard to the situation which he has in mind. I will give him an answer to-morrow.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Mr. S. H. KNOWLES (Winnipeg North Centre):: Mr. Speaker, I should like to direct a question to the Secretary of State or to the Minister of Finance. I ask it on behalf of a group of employees who play a very important part in the life of this parliament, although behind the scenes. I refer to the employees in the printing and mechanical departments of the government printing bureau. My question is this: In view of the announcement which was confirmed on Tuesday that an amendment will be introduced to the Civil Service Superannuation Act, is consideration being given to including within the act these employees of the printing bureau?


Thomas Vien: That is a question for the [DOT]order paper.



WAYS AND MEANS

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

The CHAIRMAN:: The committee is on resolution 2 of the succession duty act.
2.	That when a person is given a general power of appointment or disposal over property, such property be subject to duty as if it were given directly to him, and, upon his death, the person then benefiting be regarded as his successor for purposes of taxation.
[Mr. Ilsley.l


Richard Burpee Hanson: Mr. Chairman, I desire to go to the banking committee very shortly and I should like to make one or two inquiries now with respect to this resolution.
Last night brief consideration was given to this resolution and a case was cited by the hon. member for York West of what amounted' to confiscation by the action of the succession duty acts in the various provinces. In reply to a question by the hon. member for Saskatoon City the parliamentary assistant stated yesterday that the present resolution was to cover a technical omission from the act; that it was to take care of the case where a general power of appointment is given and the man does nothing about it. That of course is not quite apparent from the terms of the resolution itself, and I was fearful that the result of the change would be two taxes on the same set of funds. I think the resolution is open to that interpretation. Those of us who are lawyers and accustomed to draft wills know that it is a common thing for a testator to give to a person a general power of appointment or disposal over property, whether that person takes anything out of the fund or not. Frequently the person to whom the power is given is. also the recipient in his lifetime of income under the fund, and in such cases, I assume, his interest in the fund is taxable, having regard to the expectation of his life, and so on. A general power of appointment is given. But I have never seen a case where, in a testamentary disposition, the testator failed to give an alternative if the person in whom the power of appointment is vested fails to act. Usually there is an alternative. In my own practice I have invariably made it a rule to advise my clients that when the power of appointment is given to a particular person to dispose of a fund, on his death or at any intervening period, if he fails to act, the testator himself or herself in the will should proceed to make the disposition.
If I understand correctly the object of this resolution it is that if a person is given a general power of appointment or disposal, such property shall be subject to duty as if given directly to him; then upon his death, "the person then benefiting" will "be regarded as his successor for purposes of taxation." If that means anything it means two taxes on the same fund. There can be no question about it. I think that is wrong and unjust and should not become effective. I see the commissioner shaking his head, but I entirely disagree with that form of denial. That is what this means. It may be that that is not the intention, but it ought to be made absolutely clear either that it is or is not the intention of

Succession Duty
this resolution, so that the public will know just where it stands. To-day such a fund is in effect liable only to one tax. That tax may be divisible, if I may use that term. If. the person to whom a power of appointment is given takes any interest out of the fund, his interest in the fund is taxed, if I apprehend the law correctly, and the balance is taxable in the hands of the party to whom it is disposed. Now, what is the position and what is the intention under this act?-because as it stands to-day this fund is going to be taxed twice. Parliament ought to understand what the intention is, and so far as I am concerned I would oppose it.


Mr. ABBOTT:: I speak on this with some
diffidence because I do not .practise law in a common-law .province and I am not so familiar with this general power of appointment, although we have a similar provision in Quebec. I am advised it is not the intention of this section that there should be a double tax imposed. If property is conveyed under a general power of appointment with power to the person to whom it is conveyed to appoint himself, then there is a tax. Of course if he appoints himself and if the .property is still in existence at the time of his death it would vest in his heirs and be subject to tax.


Richard Burpee Hanson: Of course that is a very unusual case.


Douglas Charles Abbott: It is a very unusual case,
but this is intended to prevent that. The form of the act,.as my hon. friend knows, defines under section 3 what is a succession; and in the dominion act we have rather followed the practice in the various provinces of an elaborate definition, if you will, of what is included in a succession.


Richard Burpee Hanson: On the
theory that you do not want to leave anything out?


Douglas Charles Abbott: Quite so, and also partly
because of certain decisions of the privy council with respect to the constitutional powers of the provinces to. tax. Section 3, subsection 1, sets out what a succession shall be deemed to include, and it includes a long list of various things,-property taken as a donatio mortis causa, and so on. Coming to paragraph (i) of subsection 1 of section 3 there is included in the definition or description of a succession-
-property of which the person dying was at the time of his death competent to dispose.


Richard Burpee Hanson: That is a common provision.


Douglas Charles Abbott: If property is left to one
person with power of appointment and if it is not exercised, then on his death, to a designated person: I think that is a common type of power of appointment. But if the power to appoint were general without a designated person to take the property, in the event of failure to exercise such power, and the power was not exercised, I am advised that as the section now stands the property may pass on the death and not be subject to tax.


Richard Burpee Hanson: That is
on the death of the testator?


Douglas Charles Abbott: Correct-on the death of
the first testator.


Richard Burpee Hanson: Ultimately it must pass to somebody.


Douglas Charles Abbott: And the amendment is to
make certain that the .property passing on death even in the circumstances outlined would be taxable. It is pretty technical to me.


Richard Burpee Hanson: Let us understand this, because it is perpetuating what they have in New Brunswick-or so I am informed; I have not the statute before me-and it is something I have never ceased! to protest against. There is a double tax down there under these conditions; at least my colleague the hon. member for St. John-Albert tells me that is so and I take his word for it. That just means this, that on the death of the testator the whole fund pays the tax, under the present proposal, irrespective of to whom it may pass. It is a particular kind of fund which is not disposed of by the testator except in certain contingencies. Then, if the person to whom the power of appointment is given-if I understand the position correctly; I am rather feeling my way along-fails to make operative the power which is vested in. him by the testamentary instrument, and no alternative has been provided in the testamentary instrument, another tax is imposed* Is that the position?


Douglas Charles Abbott: That is right.


Richard Burpee Hanson: When it vests in a third person. That is the position.


Douglas Charles Abbott: There would really be another transmission under these circumstances which would not have flowed from the direction of the original testator.


Richard Burpee Hanson: That, I think, clarifies what is intended, although it is somewhat involved. Now, if the testator has a fund over which he gives a power of appointment to, say, the husband-most frequently I think it happens in the case of
Succession Duty

a wife or a husband having a fund for the benefit of children, and they do not like to designate the w'hole of them, or they want to keep them on good behaviour-that has been my experience-it goes to the one most worthy and perhaps cuts out somebody who is unworthy, if the testator makes an alternative disposition; in the event of failure of the appointee then there is not a second tax.


Douglas Charles Abbott: That is correct.


Richard Burpee Hanson: There is not a second tax. I hope I am right about that.


Douglas Charles Abbott: I am certain about it.


Richard Burpee Hanson: Then, of course, what people should do is to look at their wills. Now I understand the proposal. It is based on this theory that there are two successions; is that the idea?


Douglas Charles Abbott: That is correct.


Richard Burpee Hanson: Based on the theory of two successions?


Douglas Charles Abbott: I think this discussion has been useful. Perhaps the committee would defer further discussion until we have the bill before us and the exact text of the proposed amendment which will fit in with the section of the act which it is intended to amend. When the bill is in committee the succession dirty experts of the committee who are familiar with this branch of the law could carefully scrutinize it.


Richard Burpee Hanson: I agree with the parliamentary assistant that it would be very much better if we had the bill.


Douglas Charles Abbott: It would be easier for us to discuss it.


Richard Burpee Hanson: I think I understand the principle.


Mr. HAZEN:: If a man by his will leaves his property to his wife for life .with the power of appointment, and, failing to exercise that power, then to his children share and share alike, when the testator dies is there a tax imposed on his widow on the full value of his estate?


Douglas Charles Abbott: The position there is, of course, on the death of the testator the wife pays tax on her life interest.


Douglas King Hazen: That is what I want to understand clearly. Does she pay on her life interest or does she have to pay on the full value of the estate?


Douglas Charles Abbott: She pays on her life interest in the estate, and in Quebec-I do not know
(Mr. R. B. Hanson.]
about the dominion-it is based on her life expectancy. As to the subsequent transmission to the children, that, of course, was not in virtue of any general power of appointment given to the widow, but was provided for by the testator himself, and on her death this proposed amendment would have no relation to that situation whatsoever.


Douglas King Hazen: I do not know; there is a power of appointment there.


Douglas Charles Abbott: But not a general power of appointment. The power of appointment, as my hon. friend will see when the legislation is brought down, is power of appointment where an absolute discretion is given to the testator and no provision made as to whom the property should go in the event of his failing to exercise that power.


Douglas King Hazen: The resolution reads:
When a person is given a general power of appointment or disposal over property, suck property be subject to duty as if it were given directly to him. . . .


Douglas Charles Abbott: This resolution may not be very happily framed. I have tried to make clear that what he appears to fear is not the intention of the resolution. The bill will be drafted-drafting may be almost complete now-along those lines: I suggested a moment ago in the discussion with the hon. member for York-Sunbury that perhaps we could make the criticism a little more effective if we deferred it until we had reached the sections of the bill in committee. I do not want to force that view on. the committee, but I should prefer to discuss it with the section before me.


Mr. BENCE:: I quite agree with the parliamentary assistant, but I wish to make this point clear. Where the property is given with a general power of appointment, no restrictions-[DOT]


Douglas Charles Abbott: And no alternative in the event of the power not being exercised.


Alfred Henry Bence: In the power of appointment he may express certain wishes in the will. And as 1 understand it from the way this is worded the estate is immediately taxed on the whole value.


Douglas Charles Abbott: Right.


Alfred Henry Bence: If he exercises the general power of appointment then the whole estate is taxed again upon his death?


Douglas Charles Abbott: That is right.


Alfred Henry Bence: I want to make that point clear. It would be a very foolish thing for a lawyer ever to draw a will along those lines.

War Exchange Conservation


Douglas Charles Abbott: It is tantamount to making an open bequest; it is an outright gift to the beneficiary.


Alfred Henry Bence: I do not understand how the succession duty department loses out on the provisions of the law as they were before. If they fail to make the appointment I presume the estate would fall back into the residue of the original testator.


Douglas Charles Abbott: It is a very technical amendment. It could be urged that because he failed to exercise this general power of appointment there was no succession or transmission. It is very technical, if you will; I am not sure that I completely understand it myself, but that is the reason I am given for the amendment.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to amend the War Exchange Conservation Act, 1940, and to provide:
1.	That sections 2, 3, .4, 5 and 6 of the said act and schedule one thereto, which prohibit the importation of specified goods from countries outside the sterling area, be repealed.
Stanley Howard Knowles: This act contained a provision giving the government power to provide special depreciation for certain Canadian companies in order to conserve the supply of exchange. In the minister's budget speech of June 26 he indicated, at pages 4185 and 4186 of Hansard, that the amendments now being proposed are presented by reason of the fact that the exchange situation has considerably improved. I am rising to obtain some information. I should like to know whether the amendments proposed in the resolutions now before the committee alter the provision under which special depreciation has been granted to companies such as Falconbridge Nickel, International Nickel, a number of oil companies, and so on.


Douglas Charles Abbott: The agreements to which my hon. friend refers were entered into under section 8, part III, of the War Exchange Conservation Act, and that section is not to be repealed.


[Stage Direction]
Resolution agreed to.
2.	That schedule two to the said act be amended by:
(a) substituting the phrase "synthetic textile fibres or filaments" for each of the phrases "artificial silk", "artificial silk or similar synthetic fibres", and "artificial silk or similar synthetic fibres produced by chemical processes"
wherever they appear in items 524a, 548, ex 553, 558b, 558d, ex 560c, 561, 561a, 562a, ex 564, ex 565, 567a and ex 568;
(b) substituting the phrase "yarns of synthetic textile fibres or filaments" for the phrase "artificial silk yarns" in item 558d.
Resolution agreed to.
3.	That any enactment founded on-
(a)	Resolution 1 come into force on August 1, 1944; and
(b)	Resolution 2 come into force on June 27, 1944.
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Special War Revenue Act, and to provide:
1.	That the excise tax of twenty-five per cent on furs be extended to cover the fur content of imported articles.
Resolution agreed to.
2.	That exemption from sales tax be provided for grain loaders or elevators with a capacity not exceeding forty bushels per minute.
Stanley Howard Knowles: Before this or the next resolution passes I should like to ask one or two questions, and again I ajn seeking information, because we are getting into pretty deep water. Later on we are to deal with changes in the customs tariff, and in the schedule appended to the budget resolutions I see a long list of agricultural machinery and implements on which the tariff is being changed; in fact I believe in all these instances it is being wiped out. Now I note that under the Special War Revenue Act exemption from sales tax is being provided only for the two or three items mentioned in resolutions 2 and 3. I should like to know if there are any other items of farm machinery or farm implements included in the customs tariff schedule on which the sales tax is not being removed, or are these all the sales taxes that now obtain as far as farm machinery is concerned?


Douglas Charles Abbott: I understand the list is pretty complete now under the Special War Revenue Act. I have the act before me, and the list of agricultural implements appears to be very long. This item, I believe, is not one which ordinarily would be classed, and is not now classed, as an agricultural implement under the tariff items, but it is used for farm purposes and therefore it is felt that it should be included with the already long list of articles specifically mentioned in the Special War Revenue Act as being exempt from sales tax. The deputy minister advises me that there are no other similar items, as far as he knows, which are excluded.
Special War Revenue


Stanley Howard Knowles: That is, the policy of the government now is to remove both the tariff and the sales tax from all farm implements and farm machinery, at least to the extent that they are listed in the customs tariff schedule attached to these resolutions?


Colin William George Gibson: I would say that is the general policy. The sales tax has been off farm machinery right along, and under the legislation we are bringing in this year the customs duties are being removed as well.


Mr. QUELCH:: What is the situation in regard to farm tractors? Are they subject to any tax to-day? They are not mentioned in the tariff schedule or in the resolutions under the Special War Revenue Act.


Douglas Charles Abbott: Was my hon. friend asking a question about a tariff item?


Victor Quelch: Either under the customs tariff or under these resolutions.


Douglas Charles Abbott: I would ask my hon. friend to defer questions relating to tariff items until we come to the items themselves, which are to be taken by the Minister of Finance.


Victor Quelch: When you purchase a
tractor to-day you are given to understand that a very considerable portion of the price represents a tax. I am wondering if that tax is to be removed. I see no mention of farm tractors in any of these schedules.


Douglas Charles Abbott: I am advised that the duty on tractors is being removed.


Mr. MacNICOL:: Have not tractors been free of duty right along?


Douglas Charles Abbott: No.


John Ritchie MacNicol: The parliamentary assistant has made the statement that the duty on tractors is being removed. I am asking him if tractors have not been free of duty right along.


Douglas Charles Abbott: Not being [DOT] personally
familiar with the matter I am afraid I will have to ask that questions with respect to tariff items be deferred until we consider the customs tariff, when we will have the proper officials here.


John Ritchie MacNicol: The parliamentary assistant did make the statement that the duty on tractors was being removed, leaving the inference that up to the present that duty had been in effect.


Douglas Charles Abbott: I had in mind the war exchange tax.


Victor Quelch: Is there any sales tax on tractors?
tMr. Abbott.]


Mr. WOOD:: I think we should clear up this matter. When tractors are imported for farm use they are free of duty, but when they are brought in for other purposes the duty is collected.


Douglas Charles Abbott: When I answered my hon. friend I had in mind the war exchange tax.


Victor Quelch: Is there a sales tax on tractors to-day? Certainly the farmers are given to understand that a large proportion of the price represents a tax, and I am wondering what that tax is.


Douglas Charles Abbott: There is no sales tax on tractors used for farm purposes.


Mr. WRIGHT:: The tax on farm tractors at the present time is a ten per cent war exchange tax, which has been on since the war started. I understand that is now being removed.


Douglas Charles Abbott: That is correct.
Resolution agreed tQ.
3.	That exemption from sales tax be provided for baling twine to be used for baling farm produce and for articles and materials to be used or consumed exclusively in the manufacture of baling twine.


[Stage Direction]
Resolution agreed to.
4.	That the tax on certain places of entertainment as imposed by part XVI of the said act foe levied on the operator in each case where he fails to collect the tax from the patron or fails to affix the excise stamps as required under the provisions of the said act.
Resolution agreed to.
5.	That the retail purchase tax as imposed by part XVII of the said act be levied on the vendor in each case where he fails to collect the tax from the purchaser or fails to affix the excise stamps as required under the provisions of the said act.
Resolution agreed to.
6.	That the existing provision for the taxation of cigars in item i (a) of schedule II to the said act be replaced by a provision imposing an excise tax of three dollars and twenty-five cents on cigars valued at not more than twenty-five dollars per thousand, and six dollars and twenty-five cents on cigars valued at more than twenty-five dollars per thousand but not more than forty dollars per thousand.
Resolution agreed to.
7.	That any enactment founded on paragraphs one to six inclusive of these resolutions shall come into force on the twenty-seventh day of June, one thousand nine hundred and forty-four.
Resolution agreed to.
i

Supply-Agriculture
Douglas Charles Abbott: I would ask that the customs tariff items be allowed to stand until the minister is here. At the moment he has to be in the banking and commerce committee.


John Ritchie MacNicol: I was not in the house when the question came up in reference to the income tax on revenue from United States bonds. The government of the United States deducts from the income on those bonds fifteen per cent. Do I have to pay income tax in Canada on that deduction?


Douglas Charles Abbott: You would be entitled to take credit against your Canadian tax for the amount you paid or had deducted in the United States.


John Ritchie MacNicol: Would I be able to recover the tax I have paid on those deductions for quite a number of years?


Douglas Charles Abbott: I am afraid that question falls within the category of a legal opinion which I referred to yesterday.


John Ritchie MacNicol: This is the point I want to get clear. When the United States deducts fifteen per cent-I have a receipt in my hand -I am able to deduct from my income lax return here the amount deducted in the United States?


Douglas Charles Abbott: You are entitled to take credit for taxes paid in the United States provided the rate is not higher than the rate in force in Canada.
Progress reported.

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



DEPARTMENT OF AGRICULTURE

[Stage Direction]
Special-
29. Prairie Farm Rehabilitation Act and water storage, $2,000,000.
Percy Ellis Wright: This item was quite fully discussed the other day, particularly with respect to larger schemes which might be carried out in western Canada under this act. We all agree that these larger schemes have their place, but I think the act was originally drafted for the purpose of taking care of the smaller schemes-dugouts, regrassing, the forming of community pastures and that type of work. As such it has performed a very useful service in western Canada, and has done a great deal of good. However I should like to see this scheme extended much further than it goes at the present time. It has been maintained to a great extent in what is known as the Palliser triangle in Saskatchewan. That
is, as a matter of fact, the old drought area. In northern Saskatchewan we have gone into stock raising on a large scale, and we have found that in many parts of that area, since the land has been cleared and the bush taken off, many of the streams which formerly ran through the whole of the season now run only during about two months in the early part of the season. The matter of obtaining a water supply in some of the northern areas not now included under the Prairie Farm Rehabilitation Act has become a serious problem. Many of the municipalities are now making application to come under the act. I suggest serious consideration should be given to those applications, and that perhaps they should be considered before some of the larger schemes are entered into. If many of these municipalities could obtain the proper machinery for the digging of these dugouts, I know they would be very glad to enter into some sort of agreement with the Prairie Farm Rehabilitation Act administration to do this type of work in those municipalities in the northern part of the province.
I know the minister has received applications from that part of Saskatchewan, and that he has given sympathetic consideration to some of them. However, there are still many others anxious to come in under the act. I bring this to his attention, and ask again that serious consideration be given this matter.
The other matter I wish to bring to the minister's attention is one which was discussed by the hon. member for Acadia. I refer to the division of the water rights in the whole Saskatchewan river area. We in the northeast part of the province are possibly most interested in the power projects which might be developed from that river. If some of the larger schemes of irrigation are entered into in the western part of Saskatchewan and in Alberta they might seriously curtail the amount of water available for power purposes at points farther along the river. I would certainly suggest to the minister that at as early a date as possible an interprovincial conference should be held with respect to this matter, and that possibly a commission should be set up to come to some agreement in respect of the division of the water available. There is no doubt that by the establishment of reserves in the foothills a much more economical use could be made of the water than is being made at the present time. But before too much expense is involved in connection with the surveying and laying out of these larger schemes, it is my view that some agreement should 'be arrived at between the provinces. Otherwise it is just possible that some
Supply-Agriculture

of the survey expenses which may be incurred and other necessary work connected with these larger schemes, would be useless, if there is not enough water available.


Hon. J. G. GARDINER (Minister of Agriculture) :: Before replying to the points raised by the hon. member I should like to emphasize a correction in a report which has gone out from the discussion which took place the other day. I notice that in some of the press I am credited with having advised the committee that farmers should hold back their cattle. I think hon. members who were in the committee will agree that no such suggestion was made in the discussions which took place the other day. I should like to emphasize the fact that we do not want cattle held back. On the contrary we want cattle marketed at this time-all cattle, in fact, that are ready to 'be marketed, in order to avoid bringing about a great glut on the market later on, in October. We feel that in October the rush of hogs will take up a considerable part of the capacity of the packing plants, and for that reason we would like cattle to be passed through in as large numbers as possible ' before that time. So that I wish just to emphasize the fact that I had no intention of even suggesting toi the committee or the country that the farmers should hold back their cattle.
On the question the hon. member for Mel-fort has now brought 'before the committee, may I say that in principle I agree with what he has said, namely, that we should emphasize small projects. I think it is generally agreed that the Prairie Farm Rehabilitation Act was brought into being to assist individual farmers as much as possible in areas where they were experiencing difficulty in getting water for live stock or water for small irrigation projects which might provide them with feed and fodder. That was the original intention of the act, and considerable emphasis should be placed upon that feature at all times. We did experience difficulty in getting the money spent on these small projects. The hon. member for Melfort will recall that that was the condition in the early stages of the development of this plan. The first act indicated that the farmer himself should dig the dugout. He was told under the terms of the act and the regulations that if he did so about half the cost-in the first place it was a third, and later it was raised to a half, then later to two-thirds, and then at last reduced to a half again-would be borne by the government. He was told that if he would put

up approximately half the cost, the government would pay the other half. That was the way we started.
In the first year it was found that there were very few farmers who dug the dugouts, the chief reason being that they did not have the equipment. It will be recalled that at that time we had drought and poor crops, with resulting poor feed supplies. Even those farmers who could secure equipment from the municipalities did not have horses fed to the condition where they could be utilized for that kind of heavy work. And so the farmers just said, "We are not able to do it."
Then we devised a plan of encouraging municipalities to obtain equipment, either by hiring contractors or by buying equipment themselves and taking out the bottom six or seven feet. They said, "If the farmer takes off the first five feet they would send draglines in to take out the other six or seven feet." The money which would otherwise have gone to the farmers was paid to the municipality or to the contractor.
It will be recalled that in 1939 we had an unfortunate experience with that. We had authorized the digging of dugouts by the thousands. The farmer was authorized to go ahead and dig any time he wished to do so. In the early stages there were very few dug, and the result was that we did not get into financial difficulties. But in 1939 when there was a shortage of work for drag-lines and construction equipment, practically every contractor in the country entered into the digging of dugouts. It will be recalled that it took us two years to pay for the dugouts dug in 1939. As a matter of fact, a great many of our opponents said, unkindly, that we did it because there was an election coming on. Of course no one knew in 1939 that there was going to be an election in the winter of 1940. We did not even know it ourselves. Even in this house we did not know it until one day in January. Nevertheless, those who like to produce political arguments said that we simply went out and dug all these dugouts- twice as many as we could pay for-in that year, because there was an election coming on in the winter of 1940. We were not able to dig any dugouts in the summer of 1940 because we had no money with which to dig them. We had to pay for those already dug.
We are coming back into a similar period. For the last three or four years every contractor has been busy working on airfields and other work of that kind and was not able to dig any dugouts. In the meantime the municipalities have been buying equipment or have been getting permits to buy equipment in

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order to do this work. Some contractors have equipment not now working on new work. The result is that this year there are many people who want to dig dugouts. The municipalities have equipment and the contractors are coming back and are trying to get work digging dugouts. The money was expended by the middle of July this year.
There was just as much money for dugouts as there has been in other years. Under ordinary circumstances we would not have been able to spend any more money than we spent last year or the year before, but my information is that this year the money ceased to exist about the middle of July. I think another $30,000 was provided in order to make it possible to go on until about harvest time. It is not entirely a question of how much money was available. We tried to divide the money up in such a manner as to get it all spent on useful undertakings, but it requires a lot of cooperation and sometimes a lot of advance knowledge as to what equipment is going to be available and so on. This year we could probably have used more money on dugouts than we have if we had known in advance that there was going to be equipment available.


Mr. PERLEY:: Are the contractors who
formerly did this work going to continue to do it this year? What price per yard is being paid and is it the same as it always was?


James Garfield Gardiner: It was estimated that it took about nine cents per yard to move the earth, and we are paying four and a half cents per yard.


Ernest Edward Perley: At the present time?


James Garfield Gardiner: Yes, and we have been for three years. For a time we did pay up to six cents but we reduced it because we found that certain of these people who had purchased equipment could dig dugouts for six cents per yard, and in certain cases municipalities which had purchased equipment could dig them for that price. We were a little suspicious that in some cases they were making money digging them, and we put it back to four and a half cents, which has been the price for three years.


Ernest Edward Perley: I believe considerable survey work has been done in the Qu'Appelle valley and the tributaries of the Qu'Appelle. The minister will know what I mean by " tributaries." Some stock watering dams were built. Is there anything likely to be carried on following the results of those surveys? Could the minister give us a little information with respect to the surveys and the reports he got?


James Garfield Gardiner: The general plan in connection with any of these streams in the west is that we put in engineering parties to make surveys. We have done considerable work on the Frenchman1 river and in the southeastern part of the province where we are carrying on similar projects. Some of these surveys were originally carried on by the provincial government when irrigation was entirely under the provincial government, and we continued the survey work. Surveys were carried on on the South Saskatchewan river for the purpose of locating projects similar to the one which had been developed at Medicine Hat. There is a privately operated irrigation project just outside of Medicine Hat where the water is pumped up about sixty feet to a plateau which can be irrigated. Corn and alfalfa and other crops are grown there in abundance. With that experience and with the experience gained from other projects we conceived the idea of trying to locate as many as possible of these along the South Saskatchewan river between Medicine Hat and Saskatoon. Survey parties have been out working on this. From these, information can be supplied to farmers along the way as to what can be done.
Such projects can be developed only if power is available. We have all the figures of the cost of operating the project at Medicine Hat. Power is supplied there and there has been a discussion of the possibility of the company that develops power on the Bow river up at Calgary extending its line right on through to Saskatoon. They have asked for the privilege of doing this on a number of occasions. This kind of project is involved in the kind of thing that as now being discussed in Saskatchewan. It is suggested that all power development in Saskatchewan shall be under government control. About fifty per cent of it is now under government control. That would make it necessary for the government rather than the company to continue on through to Saskatoon. The Saskatoon plant is operated by the government. There would have to be power lines before these developments could be carried on along this particular stream.
Similar investigations are being made along the Qu'Appelle. I think survey parties have been out continuously for the last five years and as a result recommendations have been made in connection with the controlling of the waters in the lakes in the Qu'Appelle valley. Dams have been constructed at Buffalo Pound lake and at Long lake as well as at Qu'Appelle lake near the town of Fort Qu'Appelle. These dams control the waters in the Qu'Appelle valley. As is known by all who are familiar with that valley, Buffalo Pound lake is the
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first of a series in the valley. At times when there is a rush of water the level of this lake is at a certain level. As the season advances and evaporation occurs the water level will drop from three to six feet below the level of the outlet. The water then became just standing water with no stream flowing out of the lake. A dam has been built across the end of the lake which prevents the water from rushing out in the spring. This dam is opened during the summer months to permit a continuous stream of water down the river. That is the object of having the dam there.
A little further along the valley is Long lake. This was probably not a part of the Qu'Appelle river but in a tributary basin. If one flies over the country he will see that at one time there must have been a connection between Long lake and Quill lake. There are alkali flats between those two lakes which indicate that they may have been lakes which have filled in at some time. The water flows into Long lake out of the Qu'Appelle valley in the early spring, and later sometimes flows out by the same runway as it flowed in. During a drought period Long lake may be six feet below the level at which water flows out. No water flowed out for a number of years recently because the level of the lake surface was too low. We have controls now at the end of that lake which we hope will result in our being able to control the level of the water to better advantage when the water in the lake returns to the level at which it once was.
Below that are the Qu'Appelle lakes. At the town of Qu'Appelle, where the old grade ran across the river and where the original bridge was, there is a dam put in. The grade was already there. When the dam was put in, the waters in that lake were kept up from one and a half to two feet, at any rate to a higher level than they were before. It is impossible to keep the waters any higher than the dam provides for because all along that lake we have summer resorts and people with cottages and if the water were higher certain points being utilized as summer resorts would be washed away.
The parties working along these lakes were providing information upon which decisions could be reached as to the levels at which the water should be controlled.
The next lake below Qu'Appelle is Katpewe lake. There has been a dam at the end of that lake for many years and the water is still kept at the same level at which it was prior to this programme being undertaken. But it is suggested by the engineers that the level should be raised. We have doubts about that because of the experience we have had. 
When I was minister of highways in Saskatchewan we put another foot on top of the dam and then had to take it off because the water was beginning to wash away the lands where the church and cemetery and Indian school buildings are located at Lebret. So that we had to let more of the water out of the lake. We are getting expert information from the engineers which will enable us to avoid difficulties such as we have got into in the past when trying to control the waters of that lake.
At Round lake and at Crooked lake it is much the same thing. There has been a dam constructed there for that purpose.
So far as the other surveys are concerned, they are made on streams running into the Qu'Appelle valley from both sides. Those streams have flowing water in them, under natural conditions, only in the spring of the year. The grade on which the stream flows is steep and the waters have a rapid descent. What the engineers are doing is trying to find all the locations where one could put in a dam and hold the water sufficiently far back to make it useful for different purposes, one of them being stock watering, as has been suggested. A number of small stock watering dams have been put in on different streams. What the engineers are really searching for is locations where one could put a dam across what may be a flat that runs out from one of these streams, and back the water into it in very much the same way as the water backs into Long lake.


John Ritchie MacNicol: In other words, make reservoirs.


James Garfield Gardiner: Yes, instead of having the water come down in the spring months, in a rush that will be over in from two to six week's time, we are attempting to hold the water back and let it down the streams gradually, keeping the water in the lakes at the bottom of the valley up to the proper level and keeping the stream flowing during: the summer months instead of its being converted into stagnant pools.


Ernest Edward Perley: The idea would be to have more than one dam on each stream.


James Garfield Gardiner: Our big difficulty is not as to the number, but finding the proper locations. Because of the rapid descent of the streams, one could put a dam in it anywhere and hold back the water for two or three hundred feet, but we are trying to find a location where we can hold the water back for half a mile or a mile. If that can be-done on the stream itself, so much the better. Where we can find locations to put in a dam,.

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say ten feet high, which would put six feet of water in a reservoir along the ravines, we would do that.
'Mr. MacNICOL: They are working on that now?


James Garfield Gardiner: Yes. These survey parties which the hon. member for Qu'Appelle is asking about have been working continuously on that and we have some reports on locations where that can be done. The streams come in from both the north and the south of the river.


Ernest Edward Perley: 'If I may interrupt the minister, three or four years ago there was the idea of using this water for irrigation purposes and encouraging the farmers to produce sugar beets in the valley. Has the minister any information on that?


James Garfield Gardiner: That is a possibility, but if you are going to do that it will be necessary to have all your data on how much water you could store back and let down. One of the difficulties in that valley is that many flats that might be useful have been created through the disappearance of the water. There may have been a lake there but the silt nas come down and gradually filled up the lake until it is slightly above the high water mark of the stream, and the water disappears from the flat. There is some difficulty about irrigating a flat of that kind unless you can control water higher up the stream. You could not take sufficient water out of some of these lakes at present levels to irrigate any considerable acreage unless you had a further supply of water which you could let down after you had taken off your first supply of water. All that is being studied before any considerable scheme of irrigation can be entered upon. At present our information is that there is about 30,000 acres of land in that valley which could be irrigated if we were assured of a water supply and storage at the proper places.
In addition to irrigation down in the valley, there are many farmers along the tributaries who have possible projects very similar to those I spoke of on the Saskatchewan river, where a man by putting in a pumping outfit could pump water out on to a flat so that he would be assured of a garden, or it might irrigate a hay meadow without pumping. That is possible at places along these streams.


Ernest Edward Perley: Does the minister recall that at Round lake and at Crooked lake a dam was put in raising the level of the water between four and five feet? That resulted in the flooding of the flats on the Indian reserve and destroying their hay meadows. They used to get about 500 or 600 tons of hay off that land
just west of the lake, but for the last two or three years they have not been able to get any hay from that land, and that has been a terrible blow to the Indians. I have taken that matter up with the Minister of Mines and Resources, and I have had two delegations from the reserve wait on me within the last six months urging me to continue my representations to the minister that the water be lowered, say three feet, draining certain areas, so that the Indians could produce the quantity of hay which they produced previously. But the Minister of 'Mines and Resources would not give these representations any consideration at all. I have been over the location and know exactly the situation. Will the Minister of Agriculture take it into consideration? It would not affect the water in the Qu'Appelle river because, as the minister knows, that is a flat country, and1 the water level in the other lakes would not be affected either. There would be no less water going from the Qu'Appelle lakes into the river. I wish the minister would give this matter his earnest consideration. As I said before, I cannot get any consideration from the other department; and as the minister's department is building the dams and controlling the water, I bring it to his attention now.


James Garfield Gardiner: The Indian branch of the Department of Mines and Resources, of course, put in claims on account of that land, and we have paid them S3,330 in damages on account of these lands which were flooded by the putting in of the dam. I can understand that that does not get them the hay.


Ernest Edward Perley: They protested against that, as the settlement which the department offered to make them was permanent and for all time. They said that would not reimburse their loss for any more than one or two years. Certainly they will lose the hay for all time, so to speak, and that is one of the reasons they protest against having been forced to accept that settlement. I asked the Minister of Mines and Resources if his department would reconsider it. No, they said, that offer had been made and the Indians had to accept it. It was forced on them, and they accepted it under protest.


James Garfield Gardiner: What we actually do is buy the land. In all cases, whether it is individuals or the Department of Indian Affairs or any one else concerned, we set a price for the land and buy it; and of course the land is sometimes flooded and is under water for all time to come and no one can occupy it afterwards; it is occupied by a
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lake. I am not just sure what the condition is at that point, whether the water is up over the land at all times.


Ernest Edward Perley: It is now.


James Garfield Gardiner: I presume we bought and paid for it, and it is now .part of the project.


Ernest Edward Perley: I may say that the water is over it now, and the raising of the dam has forced a good many of the campers to move their cottages back. It is a great injustice to them; it has given them no additional service nor has it made the resort any more convenient or pleasurable.


Percy Ellis Wright: Will the minister state how many municipalities have made applications to come under the P.F.R.A. which the government has been unable to accept, and what is the possibility of more of these municipalities being able to come under the scheme?


James Garfield Gardiner: The present position is that we have taken in certain river basins which I think everyone will agree are more or less in the drought area. This legislation is based first upon the fact that there is a drought area, and in defining it we have kept as close as possible to what is known as the old Palliser triangle. When we started out to operate under the act first we were not able to define exactly the boundaries of the old Palliser triangle, and we adopted the idea of confining it to river basins. What we have taken is the Assiniboine river basin, the Qu'Appelle river basin, the Souris, the Frenchman, the South Saskatchewan, and the North Saskatchewan until it comes to the point where it joins the South and becomes the Saskatchewan river. We have taken the height of land east and north of these and have made that the boundary as far as Saskatchewan and Manitoba are concerned. On the Alberta side we have followed down between the streams from Lloydminster toward Calgary where we touch the foothills, and then followed the foothills down to the United States boundary. That, roughly speaking, is the boundary line around the area. It starts just north of Winnipeg, comes up west of lake Manitoba, then follows into Saskatchewan, and around the height of land dividing the Assiniboine river from the Saskatchewan river basin including the Crooked, which is a branch of the Saskatchewan, and following the height of land through to a point where a line drawn north joins the Saskatchewan river. We have gone around the northern side of the municipal boundaries wherever we can, rather than taking the south side. Where the height of land runs through the municipality we have invariably

taken the northern boundary. At the point where directly south of the junction of the two Saskatchewan rivers it becomes to Saskatchewan river, the boundary runs up to the junction of those rivers and then on the north side follows the height of land between the North Saskatchewan and the Churchill or other rivers north of the North Saskatchewan. That brings us out at the boundary line of Alberta at about where the North Saskatchewan river crosses the boundary line from Alberta into Saskatchewan. Municipalities all along that boundary line have suggested that they would like to be in, but our difficulty in connection with that is that a matter of policy is involved. The bill says, and all the discussions in this house have been related to the fact that, there is a drought area in the Palliser triangle and that because we induced settlers to go into it we ought to do something to assist in rehabilitating them; and that is the reason the act has the name it has.
A recommendation was made by a committee of this house last year that the principle should be applied to all lands and all provinces right across the country. The conflict is as between those two principles. If we are going to continue to apply this act to the Palliser triangle or-what is known as the drought area, then of course the problem of water conservation outside of it is the responsibility of the provinces. We at one time under the Saskatchewan government had a well-digging policy; and we also built dams all over Saskatchewan before this policy came in at all. The same thing was done in Alberta and Manitoba. You can find dams all over the drought area which were built by provincial governments before this plan was adopted. You can find wells on road allowances which were dug by the old territorial government before there was a province and that are still operating, and other wells which were dug, within the first years after the provinces were formed, by the provincial governments. In other words, the responsibility for that kind of thing has always been assumed to be a provincial responsibility, and the only place we have departed from that in this house is in connection with what we call the Palliser triangle, the drought area, and we only took that on during the recent drought period, on the assumption that the federal government had induced people to go there, knowing that it was a dry area.
I as minister, and many others in this house, would be in favour of having a policy which extended right across the country, provided we could adopt it without getting into great difficulties with the provinces. But for the time being, with this act as it is, and with the

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discussions which have taken place in this house in carrying out these projects, we think it is impossible for us to go outside the Palliser triangle or the lands which are as nearly as possible related to the Palliser triangle.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


John Ritchie MacNicol: When the committee rose I was on the point of asking the minister a question with reference to what the prairie farm rehabilitation board is planning for that area west of the northern portion of the south branch of the Saskatchewan river west from Saskatoon. Last summer I met some engineers in the west who told me that the prairie farm rehabilitation board-to my mind quite rightly; I wish to support their plans in a general way-were planning to build a dam across the south branch of the Saskatchewan river at some point near Saskatchewan Landing. There is a natural depression north from that point, as the minister knows, which would seem to have been put there by Providence for some purpose. The depression is about forty miles long. A dam at Saskatchewan Landing, or perhaps near there, between 130 and 150 feet high, if the base of the river is of such material that a dam could be built that high, would result in that depression some forty miles long filling up with water. I believe that the general level would reach about 1,930 feet above sea level. If that could be done, the engineers really have something worth while. They could then run a canal north from a lake at the end of the depression, the name of which has slipped my mind at the moment; I think it is White Bear lake. The water level of that White Bear extension of the natural coulee would rise to about 1,930 feet above sea level. That would be providential, in my judgment. They propose to run a canal from the end of White Bear lake north for a few miles and then divide it into two main branches, one running northwest in the general direction of Tramping lake for perhaps fifty miles or more. Tramping lake is nothing more than a coulee at the moment. There is water in it at times and it is dry at times. Fortunately the general topography of the ground lends itself to these plans. In other, -words it slopes, I am told, from the high point of 1,930 feet down towards Tramping lake. If those plans are carried out it would mean that the water would flow by gravity as far as the Tramping lake depression. It would assist all of that area around Rose-town and the communities north. If my
memory serves me rightly the other branch of the canal runs off to the right in the general direction of Saskatoon and north of the general direction of Saskatoon towards a place called Kinley. Another branch is planned to turn southeast in the direction of Luck lake, west of Riverhurst. Riverhurst is on the opposite side of the south Saskatchewan river.
As it was explained to me, there were three areas that could be served for irrigation purposes with water from a reservoir built behind a dam in the vicinity of Saskatchewan Landing. The west area would be something over 200,000 acres. That great extent of land could be irrigated. The land that could be irrigated west of Saskatoon would consist of over 600,000 acres. The southeast area down in the direction of but west of Riverhurst would be something less than 100,000 acres. From the information I gathered from the engineers I judged that there would be at least a total of a million acres of land there that could be irrigated if a dam were erected at or near Saskatchewan Landing.
I wish to assure the minister as one hon. member of this house that if such a proposal to irrigate a million acres were put forward I would support it to the best of my ability. It would mean the opening up of many thousands of new farms. It would mean the irrigating of that area by gravity without pumping, as I understand it. I hope I am right in that. It would supply water to an area that richly deserves it. I believe if such a programme were carried out it would result in the doubling of the population of Saskatoon in twenty-five years. Instead of being a city of forty to fifty thousand people it could have ambitions of reaching a hundred thousand.
Other proposals, as the minister knows, have been made for bringing water four hundred miles from the north Saskatchewan river for irrigation purposes. I am opposed to that. I am opposed to any diversion from the north Saskatchewan river, and would do my best to organize opposition to it. But the scheme I have outlined seems to me to be one that Providence has provided for.
I ask the minister if any plans have been prepared to take care of providing water from a dam anywhere in the vicinity of Saskatchewan Landing for the irrigating of the million acres of the low moisture land west of the general line of Saskatoon and north of the general line from Saskatchewan Landing. If there are, they would have my sincere support. If the proposal to build the dam at Saskatchewan Landing-<a power dam as well as an irrigation dam, because the large coulee would store all the water that would be required to take care of the irrigation work,
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and the dam itself would be of such a height that I believe some 75,000 horse-power could be produced there-is proceeded with it will have my support. However, I wish to warn the minister in one particular. As I see it, the primary consideration is the building of the other dam I proposed somewhere near River-hurst to take care of that area in the general [DOT]direction of Regina. I am not going to go into that, other than to say this. The engineers in charge of both those proposals should see to it that the dam at Saskatchewan Landing should not be so constructed that it would interfere with the backwater from' a dam that could be built near Riverhurst. By river water it would not be more than a hundred miles from Riverhurst to Saskatchewan Landing. I believe that the river level at Riverhurst is about 1,700 feet above sea level. I believe the river level at Saskatchewan Landing is about 1,811 feet above sea level. Therefore if the dam is raised to 1,930 feet the engineers would have to be careful that anything they do at Saskatchewan Landing would not interfere in any way with what must be done at Riverhurst. The first thing to be done is to build a dam somewhere near Riverhurst.
I wish to compliment the department on the grand plans that the P.F.R.A. people have apparently examined into. I can see plainly that if these plans were carried out, as they should be, with the cost divided in proportion, it would be a great thing for the central province of Saskatchewan.


James Garfield Gardiner: The engineers of the P.F.R.A. branch are making surveys in the area just referred to by the hon. member for Davenport. The first investigations have to do with the possibility of building a dam somewhere near Saskatchewan Landing. Last year a certain amount of money was spent in [DOT]drilling test holes during the time the ice was on the river, in order to determine whether or not conditions were suitable for the construction of a dam. That is about as far as we have gone up to the present in the matter of investigations. There is no report from which I can quote as to what are the possibilities. The statement that has been made was a general statement of the situation as it now exists. This summer we hope to spend some money in making surveys from the air and further surveys on the ground in order to ascertain the possibilities of that plan, but at the moment I am not in a position to give any details of what will be accomplished by the plan or what are its possibilities for the future, because as yet we have not received a report from the engineers which would make such a statement possible. I

should add that the distance from the proposed site north of Moose Jaw to the site suggested here is something like sixty miles.


John Ritchie MacNicol: Am I right in my understanding that the general topography of the land slants to the north?


Mr. GARDIINER:: I would think so, though I have not an engineer's report upon which to base that statement. I believe water will have to be pumped in order to get it up to the point where it will flow.


John Ritchie MacNicol: Pumped out of the river?


James Garfield Gardiner: Yes, I would think so.
I believe under the plan sufficient power will be developed from the dam itself to take care of the pumping, and the cost will not be prohibitive. I believe some pumping will have to be done, but I would not want to be too definite on that before we get the final report.


Mr. GERSHAW:: This vote is to support prairie farm rehabilitation, the need for which was recognized long years ago. Ten years ago the need became particularly acute, and this act was passed. That need is still great, particularly in the Palliser triangle, which so desperately requires something in the nature of a permanent policy. Year after year it has been demonstrated that there is not sufficient rainfall in that district to permit agriculture to be carried on, so that some permanent policy must be adopted in regard to irrigation. Streams flow eastward from the Rocky mountains and north from the Cypress hills. If the waters of these streams could be made use of it would be a great blessing to the people of this district. The works should be of a permanent nature, so that they may continue to be useful long after we are gone. I am sure the staff in the office at Regina have gathered a great deal of valuable information in connection with this area, and I want to make the plea to the minister that the engineers should concentrate on this primary objective until it is much closer to accomplishment than is the case at present. In addition, some of these works which are partly finished could be completed at very small cost, and I think that should be done just as soon as men and material are available. The longer they are left unfinished the greater will be the suffering. This is really one of our very urgent problems.


Mr. TRIPP:: First of all, Mr. Chairman, I should like to congratulate the minister and the department on what has been done under the P.F.RA. I know this measure was brought into operation by a previous administration, but it took the present minister to realize the

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possibilities of this area. He knows the country; he recognizes the needs, and if you travel through that country you will realize that he and his department should be given great credit for the way these projects are being developed under this act.
This morning I was very glad to hear the minister place emphasis upon the small projects which are to be undertaken. It is all very well for some hon. members to get up in this committee and advocate the expenditure of considerable sums of money on large projects, but in my opinion what is needed more than anything else is the further development of the small dugout and the small dam both on the farm and on the stream in the southern part of Saskatchewan. These small projects, I believe, best serve the needs of the greatest number of people. As far as the expenditure of money is concerned it does not cost much to build one dugout, but collectively they are of great benefit to the farmers of that country. Many farmers who formerly had to draw water three or four miles have benefited from the construction of these small dugouts and dams.
I should like also to bring to the attention of the minister a project on the Souris river, with which I am sure he is well acquainted. This project has been surveyed and fully covered by his department, and I believe the commissioner at Regina is quite prepared to go ahead with it when the money is available. It will consist of the construction of two or three small dams, which will provide storage for considerable water over a matter of about forty miles of country. The valley of the Souris river is quite wide, and if the pumping method of irrigation were adopted a great many acres of land could be developed for the production of hay and even fruit. I was speaking to the commissioner with regard to this project, and he feels that fruit crops could be developed in that valley just as they are now being developed at the experimental farm at Morden.
I also want to commend the minister upon the work he has done in establishing community pastures in that area. These pastures have served a very useful purpose and are still doing so. Years ago, when the drought was upon us, we had community pastures where we could send our stock, where water was provided, and they filled a great need.
I hope the minister will give consideration to this project along the Souris river. If it is not possible to include it in this year's programme I hope he will be able to include it in the programme for next year.


Joseph William Burton: As has been pointed out by other hon. members, the P.F.RA., as it is
commonly called in the west, was begun primarily as an experiment in the so-called drought area. I want to join other hon. members who have given credit for the work that has been done in this connection.
While some of us may from time to time have offered criticism, in the right places, we are also prepared to give credit where credit is due. I sincerely believe that this so-called experiment, in the drought area has proven successful and is beyond the experimental stage. While we were experimenting with that work, the idea was to be made effective in the smaller field. That was the original plan. I was pleased the other day to hear the minister explain how the Moose Jaw water project had been taken care of by a special vote earmarked for that purpose. 1 think that was handled in the proper way, and I suggest that similar work in the future be undertaken in the same fashion.
While I am prepared to admit that the preliminary work, and even the active administration work and the handling of the larger projects, in all probability can best be done under the Prairie Farm Rehabilitation Act, I do submit that the larger irrigation projects, those connected with the supplying of water to urban centres such as Moose Jaw and Regina, as has been advocated by the hon. member for Davenport, should be provided for by a special vote, and the Prairie Farm Rehabilitation Act should carry out the work. However, the experimental stage of this work, as I suggest, has passed. I believe we have now reached the time when there might be a renaming of the act, and also a rewriting of it so as to widen its scope. The renaming might easily be done by inserting in place of the word "prairie" the word "Canadian", so that we would have a Canadian farm rehabilitation act.
Having gone through the experimental stage in the west, we now have the advantage of knowing what can be done. The time has-arrived when we should take in all the farming areas in Canada. We might have three separate zones, one for the maritimes, one for central Canada, and one for the western provinces, all working under an administrative head. The other evening the hon. member for Cumberland suggested that there should be a reclaiming of the marsh lands in the maritime provinces. That work could' be taken care of, as well as other necessary work. I had hoped when coming to Ottawa that during the course of the session I would have time to get around to other parts of so-called eastern Canada so as to familiarize myself with the conditions in this section of
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Mr. HENDERSON:: I should like to add a word to what has been said in connection with the Prairie Farm Rehabilitation Act. There are seven community pastures in the constituency of Kindersley, which I have the honour to represent. Those pastures aggregate 174,680 acres of submarginal land which has been reclaimed. Nearly all the pastures have been operating for three or four years, and the greater portion of them have been regrassed with tame grasses of various kinds, chiefly crested wheat grass. Those pastures are supporting and feeding over 3,000 head of cattle and 2,000 horses. There are two more pastures ready for construction when we can get the men to build them. Those pastures are rendering service not only locally to Kindersley constituency, but to the whole of Canada.
With the advantage of registered Shorthorn and Hereford sires in developing those strains of cattle on the pastures, buyers from eastern Canada are in a position to select from one to three or four cars of feeder steers in the fall if they care to come to that community. They can go into these pastures and soon get plenty of splendid cattle. In truth those cattle are fairly well ready for the market when they come off the pastures in the fall. There are some feeders who would consider them pretty well warmed up, and in condition that the old country pepole like. The way the present minister has extended this work under the Prairie Farm Rehabilitation Act, in connection with pastures, is most commendable.
I have one further word in connection with water. I support what the hon. member for Davenport has said. We have cooperated on this subject before. I believe I have spoken with respect to it on two other occasions in this chamber. The hon. member was on sound

ground in practically everything he said in connection with irrigation along the south Saskatchewan river. I did not agree with him, though, in what he said with respect to the area north to Tramping lake. There is a height of land there which would eliminate it from the area. Most of the country to which the hon. member referred could be covered, more particularly that portion near Saskatoon via Eagle creek. It could be taken care of from there. But Tramping lake would have to be filled from the north, either from the North Saskatchewan river or the Red Deer river. It has been suggested we should not take anything from the North Saskatchewan river. It could be secured from the Red Deer and other sources in the west, utilizing Sullivan lake and Tramping lake to take care of the surplus of water now running away.	.


Mr. McNIVEN:: From the remarks made in connection with the Prairie Farm Rehabilitation Act it would appear that there is unanimity with regard to the merits of the act and its administration by the present minister. With that view everyone in western Canada would agree. Scattered throughout western Canada there are about 19.000 individual dugouts, watering dams and small irrigation projects which have proven a veritable boon to western Canada. It was a real tribute to the minister to hear the hon. member for Humboldt suggest this afternoon that the name of the act should be changed to the Canadian farm rehabilitation act and be administered for the whole of Canada in the same way as it has been administered for western Canada. I am in accord with that suggestion. The matter was considered last year by the reconstruction committee, and in an interim report to the house it was recommended that the provisions of the Prairie Farm Rehabilitation Act be extended to other parts of Canada so that districts which might be afflicted would be able to receive the benefits of this legislation.
I concur in the plans that are being developed for the irrigation of certain parts of western Canada. In this connection I would commend the efforts and vision of the director, Mr. Spence. In giving evidence before the reconstruction committee he formulated plans for an irrigation project which would provide water for very extensive areas and assure abundant crops.	_
These amounts are contained in a general vote, but, as has been mentioned by the minister, special votes have been provided for water conservation. This was the case in connection with Saskatoon and later for Moose Jaw and more recently for the town of Hum-

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boldt. In this connection the department has undertaken a search for water to supply this town. I commend the minister for this undertaking. Having recently spent three weeks in Humboldt I know something about the quality of the water there. I think I can say there is not a town in western Canada in greater need of a supply of consumable water.
Mention has been made on more than one occasion of the projects to provide Moose Jaw and Regina with permanent water supplies. It is part of the plan that this water should come from the Saskatchewan river and be piped to these areas. This plan is not new; it was first broached in 1913 when a vote of the burgesses of Moose Jaw, Regina, Weybura and some of the intervening areas, together with the inhabitants of the rural areas concerned, was taken. The proposal was that the city should pay a certain portion of the cost, the provincial government a proportion, while the lands bordering upon the project and which would be benefited therefrom would be taxed. The project was defeated, and until recently there has been little done or said with respect thereto.	*
I would point out that the minister has partly developed this plan by means of an open ditch and pumping station at Riverhurst in order to make available a supply of water for Moose Jaw. Moose Jaw has an acute water situation, and those of us who live in Regina are in sympathy with the situation in which that city finds itself. We are heartily in accord with any plan that may be formulated for the correction of that situation. When the plan was first broached some three or four years ago our citizen body was glad to lend its support to carrying it out.
Regina is not in exactly the same position. Regina is peculiarly situated in a saucer, and it obtains its water supply from a series of artesian wells. These were first drilled some forty years ago and at the present time there are forty-two wells in operation. Water has never been rationed in Regina and there has never been any shortage for domestic purposes. We have an abundance of water to satisfy any reasonable demands of industrial life. The water consumption in Regina for the first six months of this year was 869,000,000 gallons, an average of slightly under 5,000,000 per day or 80 gallons per person. These figures indicate that there is immediately available a supply of water for all reasonable purposes. Within the last few weeks another well has been brought into production with a flow of 1,000,000 gallons per day, and two other wells are being drilled at the present time. Water is found at a depth of from 150 to 180 feet. In addition
to the forty-two wells I have mentioned, certain industries, including two breweries, have artesian wells on their own properties. The General Motors plant have an artesian well, the two packing plants have wells, as has Imperial Oil. It will be apparent that there is available an immediate supply of water.
I want at this juncture to pay a tribute to the hon. member for Davenport for his continued interest in western Canada and in the development of water and irrigation projects in particular. He has had a continued interest in the cities of Regina and Moose Jaw. On several occasions the hon. member has said that he is a retired eastern manufacturer, but unlike other eastern manufacturers the hon. gentleman spends much of his time and considerable of his money in visiting western Canada to ascertain for himself the problems facing that part of the country. I want also to commend him for his industry in eastern Canada. On numerous occasions when addressing eastern audiences the hon. member has emphasized the necessity of the development of western Canada to ensure a prosperous east.
The other evening the hon. member stated that having been engaged in the manufacture of radiators, if he were to establish a plant in Regina the first thing he would ask for would be the water supply. With an inadequate water supply he would be deterred from starting his plant there. I know the extent to which the words of the hon. gentleman are weighed and considered by those in eastern Canada and I hope therefore that eastern manufacturers will not consider that Regina is a continuing victim of the drought and that a shortage of water is a reasonable excuse for their refusal to establish manufacturing plants there.
I should have stated earlier that the city engineers informed me that there had been no appreciable diminution in the supply of water, nor had the water level dropped in the artesian wells in the drought years between 1930-39. I have before me a telegram from the mayor of Regina in which, after expressing his thanks and appreciation to the hon, member for Davenport, and commending the Moose Jaw water project as a post-war undertaking, he says:
Mr. Farrell, waterworks superintendent, quite interested. States present supply adequate with no suggestion of failure but ultimately water from Riverhurst logical.
My view that eastern manufacturers, in addition to the hon. member for Davenport, have some such thought in their minds is confirmed by certain statements made by the hon. member for Danforth, who, before the reconstruc-

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tion committee, said that 'western Canada could not expect industrial development until the water situation in western Canada had been corrected. I am very much afraid that our eastern industrialists are looking for an excuse to keep out of western Canada, rather than to go in there and develop a market. I am constrained to that viewpoint because at the city of Calgary, for example, they have the Bow River and an unlimited supply of excellent water. The same is true of the city of Edmonton, on the north Saskatchewan. The same is true of Battleford in the province of Saskatchewan, where they have the Battle and North Saskatchewan rivers. It is equally true of the city of Saskatoon, where the river flows right through the middle of the city. It is equally true of the city of Prince Albert, where the North Saskatchewan flows right through the city.


Mr. REID:: The hon. member is speaking
of industrial development on the prairies. I agree with him that that is very desirable, but is it not a fact that electricity can be developed in areas near to coal fields as cheaply by coal as it can be by water, so that there is no reason why the prairies should be denied industrial plants?


Donald Alexander McNiven: That opens up a very
interesting question and one that has been under consideration in our province for many years. In southern Saskatchewan we have some twenty million tons of lignite coal, with an overburden of from 35 to 150 feet. That coal is mined by the strip method. There is a small power plant located down there now that should be utilized and will be utilized at some time in the very near future to a greater extent than at present for the development of electrical energy. I am not so sure that power can be developed from coal as cheaply as it can be from hydro.
But to continue, the city of Brandon likewise is on the banks of the Assiniboine river, and the city of Winnipeg is located at the confluence of the Red and Assiniboine rivers. Therefore we have a superabundance of water in western Canada, but industry has not located in western Canada to the degree that it should have. As an example there is in the city of Calgary a rolling mill. It was estab-Pshed some years ago, but never turned a wheel. It required a superhuman effort on the part of the hon member for Calgary West to keep that rolling mill from being rolled clean out of the province of Alberta about two years ago. Again, there is a steel and iron works in the town of Selkirk in the province of Manitoba which has not operated to the degree that it should have.

No, sir, I am constrained to the viewpoint that it is not water that is the deterrent. It is not a lack of water in the west that compels the centralization of industry in other parts of Canada. We have attempted to establish industry in the west. In my own experience since coming to the city of Regina we have had a soap factory there, a plant for the manufacture of shoes, a tannery, a plant for the manufacture of cigars, a plant for the manufacture of hats, and other establishments of one kind and another. All these plants have folded up and gone out of business. In some cases it was for lack of capital; in other cases it was poor management; but for the most part it was unfair competition from established industry in other parts of Canada that drove them out. Now that must be corrected if we are going to have a better balanced economy in our province. I could give you a great many instances of how it has worked out in western Canada.
While the minister may not think that this is identified with P.F.R.A., I should like to continue for a moment to establish that it is not the shortage of water but some other reasons that deter industry from establishing in western Canada.


James Garfield Gardiner: Since the hon. member has raised the point I must say, Mr. Chairman, that I hope we shall not get into a discussion of industry under the P.F.R.A. vote because I am hopeful of getting through some time.


Joseph-Arthur Bradette: I do not want to curtail the discussion but I think the point of order is well taken. The subject is the Prairie Farm Assistance Act.


Donald Alexander McNiven: I bow to your judgment, Mr. Chairman, and will make only one other short statement which can be linked up and identified with water and which serves to emphasize the point I want to make.
Some few years ago enterprising farmers north of Regina sunk a well to the depth of 3,300 feet. They got salt water at that depth. In order that their efforts should not be completely abortive, they put in a pumping plant and a drying plant and were ready to put salt on the market. But the day that they were prepared to put salt on the market, the price of salt in the Regina freight area was dropped by $9 per ton. That put that salt project out of business and it has never functioned since.


Mr. CASTLEDEN:: The C.P.R.


James Garfield Gardiner: Nff, he said it was the price, not the freight rate that dropped.

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Donald Alexander McNiven: It was not the freight rate but the salt price which dropped in the Regina freight area by $9 per ton. This project was unable to met that competition and has never functioned since.
The hon. member for Davenport suggested a fire hazard existed in our city and that it would be a deterrent to the location of industry there. I believe I have established to his satisfaction that there is a supply of water immediately available to meet any emergency and every contingency ; and I would not have him overlook the artificial lake we have almost in the centre of the city which covers some sixty acres and could be used in case of emergency as an auxiliary.


Alfred Henry Bence: I should like to endorse particularly the latter part of the remarks made by the hon. member for Regina City. I do not intend to enter into any discussion of the matter of industries; I realize that it does not come up strictly under this item. But in addition to the remarks made by the hon. member, I am sorry to have to say that in certain instances the administration or their officials have discouraged the setting up of industries in western Canada. I refer particularly to flax processing; I know definitely- that it has been discouraged in Saskatchewan, whereas it has been encouraged in Ontario by officials of the government.
I endorse the suggestions which were made this afternoon with respect to -the enlargement of the schemes which the government has been undertaking during the last number of years under the provisions of the Prairie Farm Rehabilitation Act. I especially endorse the suggestion of the hon. member for Davenport with respect to irrigation. This matter first arose a few years ago when we found ourselves in a straitened situation through drought. Now that conditions have returned more or less to normal I am afraid that many people will forget what occurred at that time, and it is possible-we hope not-that there will be a recurrence of drought conditions and we shall not be properly prepared to meet them. If seems to me that we should be thinking very seriously now of extending as largely as we can irrigation projects which have been carefully worked out and will produce the greatest results. The minister has often described in this chamber that great Palliser triangle which takes in my constituency and a large part of central Saskatchewan, where one needs a certain amount of moisture, but just a certain amount, to produce the best grains in the world. Unfortunately if you do not get that amount you have a crop failure; if you have too much you do not get quite the results you should have in grade and quality. Because of
our scientific researches and our modern knowledge of agricultural produce, excess moisture is not as great a hazard as it used to be. But certainly we should have some protection for the times when the supply of moisture is not sufficient to induce germination and to produce crops in this particular area. Besides, if these vast irrigation schemes were put into effect we would be able to achieve a diversification of agricultural production; in addition to producing very hard wheat we would profit by that diversified economy which, I am sure, all hon. members feel is essential to all parts of Canada.


George Ernest Wood: I should like to make a short contribution from the Ontario standpoint. I am inclined to endorse the standpoint of the hon. member for Humboldt, that P.F.R.A. should be given national application and extended to other parts of the dominion. Even in Ontario we have conditions wherein public assistance might serve a national interest, through the reforestation of certain lands which should never have gone into agricultural production. It seems to me that there is a field for expansion in that direction. At the same time I do not believe that large investments of taxpayers' money should be made in schemes of this kind without the prospect of an ample return for the money expended. I do not know whether I am clear about this scheme

whether at the present time there is a return of any kind. I was led to believe that it was intended that there should be, in course of time. It is true that if you can increase production, the government receives indirectly as a consequence a certain amount of revenue. But in the United States, on schemes such as that by which the reconstruction finance corporation built Boulder dam and many other projects, assessments are made in respect of the services rendered, upon those who benefit by them, and up to the present time the return upon the original capital expenditures has been as much as twenty-five per cent. I do not believe that governments should throw their taxpayers' money around without a prospect of return, and I urge that this principle be kept in mind.
I was out in Saskatchewan in 1937. It was a fairly dry year, and I was much impressed by the necessity of doing something to maintain the families in the drought areas of the west. Any of us who happened to see what conditions were there could only welcome an opportunity of contributing money to the general welfare and well-being of the prairie provinces. But conditions have somewhat changed. Although this year we are asked to vote only two million dollars, I would remind hon. members that there has been a consider-

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able expenditure in the west in these various schemes. I happen to have in my hand a return from the Canadian federal farm loan board, and I find that there is a measure of prosperity even in Saskatchewan, as indicated by the fact that in the year ended March 31 last, of eight million dollars borrowed from the board, two million dollars was paid in the retirement of principal. In other words, in one year of prosperity Saskatchewan farmers have been able to repay one-fourth of their indebtedness to the board. We are very glad that that has taken place, but it seems to me that the time has come when an assessment might be levied on those who derive the benefits from these schemes. In this way capital would be returned and could be reinvested in a kind of revolving fund and the work extended all through the dominion.
I have mentioned this because it seems to me that there is a tendency for us, even in prosperous times, to endeavour to satisfy some desire at the public expense without the prospect of return to the treasury. I hope that when this work is continued, this aspect of the scheme will be given some consideration, so that the money will be returned and made available by way of a revolving fund for expenditures throughout the country.


Mr. MATTHEWS:: I shall not attempt to follow all the way through the remarks of the hon. member for Regina city. I was impressed by the able presentation he made. I wish to say a few words to endorse all that he said and more with regard to the Prairie Farm Rehabilitation Act expenditures. No ^ one living in other than the prairies can begin to visualize what those dugouts have meant to the farmers of the west. They have simply transformed large sections of western Canada; and drive where you will to-day you will see splendid herds of cattle from which the owners are reaping good returns, where a few years ago, because of lack of water, they were not able to keep more than two or three cows. During the last few years this has been of particular advantage in supplying food to our allies. I feel sure I am speaking for the general public throughout the west when I say that the Minister of Agriculture, his staff and his engineers, are entitled to a large measure of gratitude and appreciation for the way they have stood by this work. I am speaking of what I have seen, speaking of what I know.	_
Just a few days ago I received a letter from a progressive farmer in Manitoba who fives in a district where water has never been plentiful. He has made considerable money because of those dugouts, and he expresses the hope that in part of that district there will soon be a 
hundred more dugouts placed. I understand the great trouble is the lack of machinery.
I am glad that there is no reduction in the estimates this year for that purpose. I do not regard this as an expenditure; it is an investment. It is an investment that yields rich dividends. These dividends are not payable to western Canada alone; in very large measure they seep back to the east. They mean abundance of business. They mean more and more to the workers of eastern Canada. They tend to the upbuilding of Canada as a whole; and I wish to express my appreciation of the fact that again this year that expenditure or investment, as one may wish to call it, is to be continued.


Charles Albert Henderson: May I give a word of information to the hon. member for Brant, which I should have given before. These community pastures are now all self-supporting. In fact the sinking fund will more than rebuild the pastures in twenty years.


Mr. DIEFENBAKER:: 
Mr. RICKARD:: On a point of order, Mr. Chairman, what has this to do with the'item before the Chair?


John George Diefenbaker: It has to do with prairie farm rehabilitation, and has been incorporated in the book dealing with this subject issued by the minister. During those years the Prairie Farm Rehabilitation Act was set up under the Bennett administration, and has been carried on and extended under the present administration. The hon. member for Brant asked whether or not it pays a return. I join in the suggestion made this afternoon by the hon. member for Humboldt and supported by the hon. member for Regina City- who also advised us that this scheme had been suggested by the committee on rehabilitation as a post-war measure-that the P.F.R.A. be extended as a dominion measure; and experience has shown that it will pay returns. It has brought results. It has paid returns far beyond the extent of the expenditure made under it, in the new hope and determination it has given the people of western Canada, who never could have carried on in recent years if this scheme had not been inaugurated.
In passing let me say this. We often hear the suggestion advanced that people in eastern Canada do not appreciate the needs and difficulties of the people on the prairies. My answer is that we in western Canada can never adequately show our appreciation of the attitude taken by the people of the east dining those dark and difficult days. We may fail to express that appreciation and to pay our tribute of thanks, but the west know that they helped us during our difficult days, and the suggestion advanced this afternoon that the operation of P.F.R.A. be extended to apply^ to all of the country offers just one way in which we, having passed through the experimental stage under this act, may do our bit to assist in the rehabilitation of other parts of Canada. I believe the minister dealt with this matter last year, and I am sure he believes that something along this line must be developed in eastern Canada.


James Garfield Gardiner: I also dealt with it this morning, just before lunch.


John George Diefenbaker: I heard the hon. gentleman deal with it last year; I was not present this morning at the sitting of the
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committee of the whole. I am not in agreement with the suggestion that there should be an expenditure of $100,000,000. To-day I am afraid too many hon. members are apt to recommend the expenditure of hundreds of millions of dollars without considering the fact that such tremendous expenditures will necessitate increases in taxation. I do feel that a step can be taken in the direction of extending its operation to the whole of Canada without spending anything like the amount mentioned.
I know something of the conditions that exist in Nova Scotia, in the marsh areas referred to not long ago by the hon. member for Cumberland. I feel that this act should be made applicable to projects in all parts of Canada, and that this could be done without difficulty, and certainly without criticism, _ so that something in the way of rehabilitation might be accomplished in the marsh areas of the maritimes.
I join in the very generous tribute that was paid by the hon. member for Regina City to the hon. member for Davenport. I believe that western Canada, regardless of party affiliations, owes a debt of gratitude to this hon. gentleman for what he has done in endeavouring to show the people of this country from his first-hand experience and knowledge something of what unity means in building up a nation, each part dependent upon the other, in order to assure the economic welfare of the whole. That has been the crusade in which the hon. member for Davenport has been engaged for a number of years, and the people of western Canada appreciate what he has done. He has also shown the people of the east something that the hon. member for Brant has lost sight of, which is that in restoring prosperity in western Canada, or in the maritimes, or on the far western slopes of the Pacific, prosperity is brought to those portions of Canada that depend upon industry. That has been the purpose of the work of the hon. member for Davenport, and this being the first opportunity I have had to say a word of commendation, I am glad to be able to do so.
I should like to know from the minister what is being done in connection with the submarginal lands. I know of the work that is being carried on by the land utilization branch, but I have noted that in recent months there has been a gradual return of people to these areas because of the fact that in other parts of the province farm land is difficult to secure and prices have increased. They are returning to these areas which history and experience since 1860 have shown have experienced periods of drought that have

continued from five to seven or even ten years at a time, they being located within the northern confines of the great American desert.


James Garfield Gardiner: During the years this act has been in operation we have taken
1,268.000	acres of land out of cultivation and put it under pasture. When I say "out of cultivation" I do not mean that all the land had been put under the plough. Some of it, of course, had been included in farms, and the proportion of a farm which is under natural grass in submarginal areas is perhaps greater than in the better areas. We have taken over the land previously operated by individuals, in some cases as farms and in other cases as ranches, under lease from the government, and have placed that many acres under pasture. In the beginning we had a very definite opinion in that regard. It will be recalled that- this method of dealing with submarginal lands was not contained in the act as it was first drafted but was added in one of the amendments made in 1936 or 1937, shortly after I took over the department. When we began to deal with the matter we asked the provinces, since the lands had been returned to them, to turn over to us any of these lands over which they had control. We asked them to turn over to the federal government, through the Prairie Farm Rehabilitation Act and through the Department of Agriculture, any of the lands they desired us to put into pasture. Only one province agreed to do that. Saskatchewan agreed to turn the lands over and place them under the ownership of the federal government, if they were fenced and put into pasture.
The reason we were insisting upon that at the beginning was that we wished to prevent for all time farmers going back on those lands. And so we wanted them to be under the ownership of the federal government. We put fences around them, and we make them available to the people in the community. In obtaining that control and ownership of the lands we agreed to enter into some kind of arrangement with any individuals on the lands to provide for moving them off and putting them on better lands. We preferred to put them on lands outside the pastures, where they could get a better grade of land, and at the same time utilize the pasture in order to assist them in carrying on. But in addition to that we did provide to move them. This has a very important bearing on the item we are going to discuss next, namely that having to do with the Prairie Farm Assistance Act.

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Many persons have made representations to me to the effect that we should enlarge the Prairie Farm Assistance Act to take in every individual on an individual basis. The reason we did not do that from the beginning, was that under this act we have provided for financing an individual when moving off submarginal lands. We did not wish, under another act, to finance his staying there. In other words if you have four or five individuals in the middle of a township, where everyone else is getting by under the same weather conditions, it would appear to us that to assist that small group of individuals to remain in the area would mean that we would be assisting people, in many instances, to remain on su.bmarginal lands. And so we suggest that the assistance we ought to give to that type of individual is assistance to him to move away from there and to go on better lands. We applied that principle under this act, and we have moved a great many people out of Saskatchewan, or off some lands in Saskatchewan, to other lands. I can look up the exact figures if they are required.


John George Diefenbaker: About how many?


James Garfield Gardiner: I think that will be
found in the report the hon. member has in his hand. My memory is that we moved about a thousand families. We are carrying on on that basis in Saskatchewan.
In Alberta we have agreed to enter into an arrangement under which we have control of the lands over a twenty-year period. But up to date the Alberta government has not signed that arrangement. For that reason we have not been able to form what are known as community pastures in that province. In Manitoba, where the situation is not quite the same, there are very few of these areas upon which people are located that could be organized into pastures, and where there is any considerable amount of government-owned land. We have there entered into arrangements under which we have assisted in organizing very much smaller pastures than are found in Saskatchewan. Most of those have been taken over for operation by the municipalities. That is, we have not taken actual ownership of the lands. We have taken some control for a period of time, and, having made capital expenditures, in some cases we have turned the administration back to the municipalities for purposes of operation.
We have different methods in the different places in which we are operating. Our general desire is to get people off the submarginal lands. There is legislation in each of the provinces dealing with submarginal lands. In Saskatchewan, under certain legislation in
that province, they designate certain lands as submarginal. We deal with those lands on the basis upon which they have been designated. In other words, it must be a matter of cooperation between the federal and provincial governments, when lands are under the control of the province. But the basic principle underlying our desire is that if we are going to take land and fence it into large pastures, we build fences which will be good for at least twenty years, we put grass on those lands, and also supply breeding stock. We put sires in the pastures so that there will be good stock. We ought to have ownership of those lands to prevent someone from coming back when prices are high and conditions particularly good and starting in on those farms again. We wished to make resettlement permanent.
As to the other suggestion, I doubt very much if the hon. member for Lake Centre can quote me at any time as having said anything different from what he has just read from the report. I have never been one who believed that the depression in Canada was or could have been caused by any government in this country. That is one reason I am not in favour of the C.C.F. policy. I do not think it can be corrected inside this country. I think when we talk about the depression which existed in the thirties as being something which we ourselves could correct, without any consideration being given at all to what happened outside of Canada, we are approaching it from an entirely wrong angle. I still think the w'ay our problem can be solved here is by having conditions both inside and outside Canada under which we are prepared to exchange our products very freely. That of course depends upon our being able to find markets somewhere else for the products we produce here in surplus quantities. When we are not able to do that, as we were not during the time referred to, difficulties arise. I think it is in the report to which reference has been made that one of the causes of our not being able to do that was that restrictions were placed upon the shipments of our products into other countries, as a result of the desire to increase the production of the same products in those countries.
Mr. IiUHL: What about the home market?


James Garfield Gardiner: My friends over there would like to force 560,000,000 bushels of wheat and 800,000,000 pounds of bacon and ham down the throats cf 12,000,000 people, and it just cannot be done. We have to be able to find other people who are prepared to eat some of it. That of course is what we desire to do under those circumstances.

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All this, however, is aside from the matter now under discussion. The position is that under rehabilitation we are attempting to get submarginal lands out of cultivation, and making a further attempt to keep them out. We must have a certain amount of cooperation both from provincial governments and from individuals on the lands, if that is to be accomplished. In some cases we require the cooperation of municipal councils. I must say that in a very large degree we have had cooperation from all those sources. Because of that cooperation we have been able to accomplish something in connection with the rehabilitation of that country.


John George Diefenbaker: Has the department any scheme for the use of submarginal lands other than the establishment of pastures and reseeding in grasses?


James Garfield Gardiner: There are some lands which would be considered submarginal in relation to the growing of wheat, let us say, which would not be submarginal in relation to the growing of other crops. The best illustration of that, one which would be best understood by hon. members in all parts of the house and from all parts of Canada, would be that area in which tobacco is grown to a very considerable extent in southwestern Ontario. There is a section there which at one time would have been classed as submarginal, and to-day it is perhaps the most valuable land in Canada because they are able to grow tobacco on it. There are other lands elsewhere of the same character. I know of a farm in Saskatchewan, a quarter-section, which was homesteaded by a man who went almost bankrupt. I do not know whether he came from Prince Edward Island or one of the other maritimes, but in any case he knew how to grow potatoes. He put in about fifteen or twenty acres of potatoes on this farm, which was located about fifty miles from Regina. Within a very few years he was able not only to get out of bankruptcy but to retire in Regina, and he has lived there ever since. That land would be considered as submarginal if you were going to grow wheat on it, but it could grow another product and make considerable money for the owner.
I realize there is another factor involved in this. If all the land of that type in Saskatchewan were put into potatoes, everyone would go broke trying to grow potatoes. A few individuals can become fairly wealthy producing a product as long as too many do not go into the production. There are many things involved in grading land as submarginal. The location is one-where it is in relation to a

city or in relation to some other market. However, generally speaking, submarginal land is that light, sandy land found in many sections of the country, or land that is so polluted with alkali that it is not suitable for the growing of ordinary crops.


Wilbert Franklin (Frank) Rickard: Mr. Chairman, it is my intention to say only a few words. I have been very much interested in the discussion that has taken place to-day. This has been an innings for western Canada. I was glad to hear the praise given to the minister by members of different parties. He surely must be popular in Saskatchewan by now.
He has been very generous to the west, but he has also been generous to the east. I believe he is just as much interested in the east as he is in the west. He tries to do everything he can as Minister of Agriculture for the benefit of Canada as a whole. The hon. member for Lake Centre I believe suggested that perhaps we in the east did not appreciate what is being done for the west. I think we do. I do not think there is any person who gives more support to proposals brought forward for the west than the eastern member. We have sat here and seen millions and millions of dollars provided for the west in one way or another. I think it is all right, but we want to know that the money is being well spent.
We are not trying to deprive the west of anything they should have. I believe these dugouts and irrigation schemes are necessary and no doubt there will be good returns to the country. But, as I said before, we like to know that the money is being well spent. We are paying our share of what is paid out from the dominion treasury for all these things, but if we get results that is all we can ask for. I do not want the impression to go out that we are not in favour of backing the west in everything that is feasible, but I would like to ask western members to support the eastern members in some of the things that we think we should have. They may have an opportunity to do this before the session is over.


John Ritchie MacNicol: there is no guarantee that the present supply system would be able to look after the increased water demand.
He is quite right. The engineer knows that it would not begin to look after it. With a population of 80,000 people, it would mean that there would be only 70 gallons per day per person.
The superintendent said that when the city developed its three present supply sources-at Mound Springs, Boggy Creek and Mallory Springs-the water "simply oozed out of the ground, it was that plentiful." That condition does not exist to-day. It appears now that the long-time storage in the ground has been .somewhat depleted.
Any one who is an engineer and knows anything about water appreciates how water resources will decrease, and the engineer is right.
It was imperative that the water issue be . kept alive, Mr. Farrell said-
That is what I have been trying to do, and I hope I have the minister with me. I will support him as strongly as I can in any programme to provide the capacity which he determines is sufficient to furnish ample water for these cities. I will read that sentence again:
It was imperative that the water issue be kept alive, Mr. Farrel said, for there is no telling when Regina may need additional supply sources.
I have no comment to make on what the hon. member for Regina City said. I was an industrialist and I do know something about
100-323J
business. I, and I know there are many others, would like to see industries started in the west. I believe industries should be started there, but as the hon. member for Regina City said, the present supply of water is only eighty gallons per capita per day. That bears out what the city engineer said. But, Mr. Chairman-and more particularly Mr. Minister, because I want to stay with him just as I want him to stay with me-the average per capita consumption in Ottawa is 117 gallons per day. That is fifty per cent more than the present average in Regina. Bring the average water gallonage in Regina and Moose Jaw up to the Ottawa average. Why should not Regina and Moose Jaw have as high an average as Ottawa? I do not want anything that the member for Regina City said-I thank him for what he said about me personally, although, that is neither here nor there-to detract the minister's attention from the absolute necessity, according to the figures of the hon. member, of bringing the average in Regina and Moose Jaw up by at least fifty per cent. Bring it up to 117 gallons per capita per day.
I have tried, and I intend to continue trying, to keep this matter on a higher plane than politics. This country has been cursed with politics. Let us get on a higher plane than that. The minister can count upon me as a supporter of any programme for providing an ample water supply for western Canada if he brings in a programme that is big enough to do it. But I shall not be a supporter if he is satisfied that 80 gallons per capita per day is enough for the people of Regina. They can get by with that, but that is not what they should have.


James Garfield Gardiner: Just in conclusion on this point, let me say that I was for five years minister in charge of labour and industry in Saskatchewan,, and during that period we went into all these matters having to do with the water supply of Regina and other cities and the requirements of industry. We all appreciate, and I do particularly myself, the manner in which the member for Davenport has tried to picture to the eastern part of Canada the possibilities of western Canada. With regard to the programme that is now presented, at the start of the war we were embarking upon a much larger programme than this. Our vote then for this kind of work was fifty per cent higher than it is to-day. We are spending a considerable part of our vote to-day on engineering work with regard to the larger projects, and we have, I would not say complete information, but very full information with regard to all these larger projects. We
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hope that immediately the money is available when this war comes to an end, very much larger sums will be available for expenditures through the P.F.R.A. or perhaps through one of the new departments or otherwise.


John Ritchie MacNicol: Or by special appropriation.


James Garfield Gardiner: However the money is expended and by whosover it may be spent, we are gathering the information necessary to lay the foundation for that expenditure. The money expended now is being used to a very considerable extent for that purpose.
When Mr. Spence was here a year ago he Outlined before the reconstruction committee a water supply programme that would cost $111,000,000. While we have not detailed information we have very full information to place in the hands of the officials of P.F.R.A., whoever may be there, two years or five j'ears hence, so that they can go right ahead with these projects when the money is available. But I would like to emphasize what was said by the member for Lake Centre. When that Figure of $111,000,000 was given before the *committee, I immediately sent for Mr. Spence because I saw the headlines in the papers the next morning that it had been suggested that we spend $111,000,000 on irrigation in western Canada, and I know from experience that you can scare people. I also know that you cannot spend $111,000,000 on this kind of work in western Canada in one year.


John Ritchie MacNicol: Was not his a long term programme?


James Garfield Gardiner: It came out in the press is an expenditure of $111,000,000, and I asked Mr. Spence to go back before the committee ind enlarge upon his proposals. It is a programme that ought to be spread over a number of years. You simply cannot start out with the idea that you are going to spend all that amount of money in the first or second year after the war. We are gathering information that will cover a programme of at least $100,000,000 of expenditure. But of course how fast we can go will depend entirely upon how many other programmes are being gone on with in Canada at that time and what the labour conditions are. I can assure the member for Davenport that we cannot go faster than I would want to go. I do not Imagine that I shall be able to persuade a [DOT]government, if I happen to be a member of :the government at that time, to go as fast ias I would want to go. I can assure him there will be no holding back as far as I am concerned. I would like to see the whole job done at the earliest possible day, and I think every western member and every member from eastern Canada who understands the situation
XMr. Gardiner.]
feels the same way about it, no matter to which party he belongs. I feel also that when the time comes there will be a membership of this house, no matter who happens to be in control of the government, which will hold that same point of view.


George Hugh Castleden: Would the minister
place on record the number of community pastures in Saskatchewan in 1941, 1942 and 1943, giving the acreage and the number of stock kept in each of these areas? Would he also state his programme for community pastures in 1944?


James Garfield Gardiner: I had perhaps better give the total figures for Saskatchewan and Manitoba. There are only four community pastures in Manitoba, and they are small in acreage compared to the others. They do not change the picture very much. The total acreage at the end of 1943 was 1,268,148. That is the entire pasturage acreage from 1937, wrhen the policy was brought in. The total carrying capacity is 41,455 head. We estimate what the carrying capacity of a pasturage is and then cut that down by a certain percentage to allow some leeway for other persons who want to come in and for those who want to increase their herds. The number of cattle carried in 1943 was 38,821: the number of horses 13,104; the number of sheep 12,734. The cost of operation was $108,348.66 and the revenue $111,119.75. The surplus was $12,473.39. That is the accumulated surplus. Some had small deficits and some has surpluses. The accumulated deficit was $9,718.30.
I would say to the member for Brant in connection with what he said about a revolving fund, that here is a case where the amount coming in is just about the same as the amount going out.


George Hugh Castleden: Were there any pastures which were not being used-in which there were no stock-in 1943?


James Garfield Gardiner: Only those, I think, which were still under construction. I notice that all those recorded here-and there is a page of them-have stock in them.


Mr. HANSELL:: I do not rise at this time to make a speech. I only want to ask the minister a question, based upon a remark he made a few moments ago when he was describing the relationship between the bygone depression and the Prairie Farm Rehabilitation Act; at least what he was trying to establish was that one was in no way responsible for the other. I think I would agree with him on that. The period of depression which we experienced some years ago was a business depression, not one of production. He said

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that no government could solve that problem, that no government would have an answer to that.


James Garfield Gardiner: They might have an answer, but they might not be able to solve it themselves.


Ernest George Hansell: That reasoning does not quite add up in my mind; it may do so in the minister's mind. In making his argument the minister went on to say, at least as I understood him, that there was only one solution, namely, that we had to find foreign markets for our goods. I want to ask him one question, and I do not want him to take half an hour to answer it; it can be answered in a very few minutes if the minister has the answer to it. If the question were asked me I could answer it in thirty seconds.


James Garfield Gardiner: Well, you answer it and then I won't need to.


Ernest George Hansell: I want to get the minister's answer, because this is the position. The government is going to bid for power to run this country, perhaps this fall. I fancy that for a good many years hence they will be still bidding for power to run this country. I ask the minister this one question; I asked it of the Prime Minister the other day in another debate, but I did not expect an answer because we were not in committee. Supposing his government finds itself in a position where Canada has produced all that it needs to produce, that goods begin to pile up and men are laid off and an unemployment problem exists; we have the goods, we have unemployment. Supposing the government cannot get these foreign markets, how would the minister solve that problem?


James Garfield Gardiner: I will answer that question in as near to thirty seconds as I can. I am bringing down a bill to-morrow which in so far as agricultural products are concerned is intended to deal with the matter for some time to come, in any event.


Ernest Edward Perley: I have not been able to follow all the discussions or hear all the questions which have been asked the minister on this item this afternoon, since I have been trying to keep in touch with another committee. I can assure you, Mr. Chairman, there is a very interesting situation in that committee this afternoon, and they are now getting down to a little action.


Thomas Reid: Are they making progress?


Ernest Edward Perley: I understand that the minister in reply to the hon. member for Lake Centre admitted that the low prices prevailing in respect of farm products, more particularly
from 1930 to 1935, resulted from a world condition, including the operation of tariffs in other countries. Maybe he is right to a certain extent.
I had something to do with the act when it was first passed. The main purpose was to provide for the development of water projects, by way of dugouts and otherwise, to benefit certain areas, particularly in Saskatchewan, which were in need of water as a result of drought conditions which had continued for year after year. That was the main purpose of the legislation. Since 1936 or 1937 this branch of the department has developed to very great importance and many other projects have been undertaken, with whose utility I certainly agree.	:
No government can see eight or ten years ahead. Bills pass which within two years, it is seen, can be improved upon and their operations extended. That has taken place' in connection with this branch, and in many respects the minister is to be commended for what has been done.
I do not believe, however, it was ever intended that under this branch there should be undertaken some of the larger projects which were spoken of yesterday evening and to-day, namely, to provide water for cities, and matters of this kind. I think such work should be undertaken under another vote and, perhaps, not under the control of this branch.
In looking over this report I find that a number of different projects have been undertaken, upon which the minister has given a good deal of information. The projects of community pastures were being discussed as I came into the chamber. I note that sixty-three were in operation in 1942-43, and the minister has informed us that the number has increased, and has stated the acreage. It is one project which I think is worth while, especially in sections of the province where stock is available within a reasonable distance to be pastured or cared1 for. In certain sections, including the district which I happen to represent, this provision is not needed, because we have water within reasonable distance for anyone who wants to go into the stock raising business.
1 notice that there is a land settlement branch under whose direction settlers are moved from areas where adequate crops cannot be raised, and established in other districts. Perhaps the minister will give us some information with respect to that.


James Garfield Gardiner: I dealt with that in reply to the hon. member for Lake Centre-About a thousand families were moved.
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Ernest Edward Perley: I can look up the information in Hansard; I will not ask the minister to repeat his reply.
One complaint which I should make, although I am not going to be unfair about it, relates to the staff. If one consults the auditor general's report he will find that this branch contains 280 employees, of whom twenty-six receive an annual salary of more than $2,000 each. Twenty-five men in this branch get over $2,000 in salary and some are getting as much as $6,000. Mr. Spence, the man in charge gets that amount. When we consider the number of employees and their salaries as set out in the auditor general's report I think the minister should give us information with respect to the number of employees that are engaged on this work at the present time and whether there are as many there now as the auditor general shows in his report at page A-38. This report shows that there were 281 employees. Is there any increase in that number; if so, would the minister tell U8 how many more pastures and dugouts will be constructed this year? Is the increase in the number of employees comparable with the increase in the work that is being done?


James Garfield Gardiner: So far as the permanent staff is concerned it is reduced to some extent, not so much as a matter of choice but because of existing conditions. As I explained when I was before the committee last, we have quite a number of men engaged on a daily wage basis. It is that figure which changes most from time to time; that is, we have not very many in the winter time, but ,ve have a considerable number in the summer -ime. If we keep that fact in mind, the staffs, is at March 31, 1944, were as follows: Ottawa, six; Manitoba, thirty-six; Saskatchewan, 238. It will be remembered that the head office is in Regina, and the Swift Current farm does considerable work in connection with it. The staff in Alberta was fifty-one. That makes a grand total of 381. We now come to the technical staff. The total number of graduates is fifty-two; non-graduates, seventy. They would all be either graduate or non-graduate engineers. The clerical staff is forty-one. It will be noted that most of the engineering staff are men who will be out for a considerable part of the time. The unclassified or year-round total number is ninety-three; seasonal, 426. There were employees there on March 31 who would not be on for the full year, 126 of them. When you come to June 30, which would be about our peak in any season, and go over the same list you find the following: Ottawa, six, the same number; Manitoba,
(Mr. Gardiner.]
seventy-seven; Saskatchewan, 551; Alberta, 117; total, 751. The graduates under technical services total sixty-six; non-graduates, sixty-eight. The non-graduates are slightly lower than they were, two below; clerical staff, forty-seven; year-round staff, 102, and the seasonal staff, 468. That makes a grand total of 751. It will be noted that the greater part of the increase in seasonal employees is 350 in Saskatchewan; but one has to remember that practically all of the pasture work is in Saskatchewan and that extensions are being made this year to two different pastures. There were two new ones under construction and there were two that were being completed in Manitoba. The others were in Saskatchewan; four in Saskatchewan and two in Manitoba.


Ernest Edward Perley: Community pastures?


James Garfield Gardiner: Yes. Two of those are extensions to pastures already in existence, and one is a new pasture of the ordinary type. The other one, the Sterling ranch, is a smaller one that we are providing for the purpose of handling the bulls that we use in connection with the breeding of stock in the summer time.


Ernest Edward Perley: What was the first one
you gave?


James Garfield Gardiner: Local improvement district 21, an extension Excel rural municipality 71 is also an extension. The new one that is being built is Hillsborough rural municipality 289. The two in Manitoba are Woodlands and Ellice. The Sterling ranch is a ranch down south of Shaunavon in Saskatchewan.


Ernest Edward Perley: Would the minister give
us the number of dugouts and water projects that have been undertaken and tell us if there is an increase?


James Garfield Gardiner: The figure I gave the
last time I was before the committee was 1,308 for two years ago, and for last year a little over 1,400.


Ernest Edward Perley: That is in the report. Do you expect an increase this year?


James Garfield Gardiner: I said last time that as near as I could get to it the same amount of money is being expended with probably $30,000 added. We are trying to find $30,000 out of our other items in order to increase that sum, but we are attempting to construct about the same number, about 1,400 or 1,500.


Ernest Edward Perley: Do I understand that the staff has increased from the figure given here, 281, to the number just given, 700 and some odd?

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James Garfield Gardiner: Between March and June, and the increase is made up of practically all labourers on the pastures.


Ernest Edward Perley: Most of them are the same positions as those recorded in the auditor general's report?


James Garfield Gardiner: I am not sure without going over it carefully. It would depend on the time of the year, if you want to compare the figures.


Ernest Edward Perley: Give us the figures for last year.


James Garfield Gardiner: The figures that would be comparable would be all of those except the seasonal ones. If you leave out the 126 on the first list and the 468 on the other list you will have the year-round employees in the other for figures, the fifty-two graduates, the seventy non-graduates, the forty-one clerical and the ninety-two year-round staff.


Ernest Edward Perley: Really the increase is the difference between 126-


James Garfield Gardiner: That makes 255
employees at the first of March. That is a decrease from the 281. Then in the next list we have fifty-six graduates, sixty-eight nongraduates, forty-seven clerical and 102 year-round, making a total of 293. That is slightly above the figures you have there. Our figure would be a little higher this year than it was a year ago.


John George Diefenbaker: I should like to ask a question based on an application by the town of Lumsden requesting certain expenditures from this vote for repairs of a dike. I do not often bring up individual cases, but this seems to be a proper one having regard to the changes that were made at Craven in connection with the Long lake development. I should like a report from the minister as to what has been done in connection with the request made by that town.


James Garfield Gardiner: I am not in a position to deal with the exact request that was made, but I know some of the circumstances. This morning I think I mentioned the fact that water flows into Long lake early in the season and fills it up, and some years it flows out again after it has reached a certain level. There have been times when Lumsden has been flooded. We hope to be able to control that situation to a certain extent by keeping water back in Buffalo lake, further west, and letting it come down later on in the year. We have built a dike across the south end of Long lake and in that dike we have placed a cement structure to control the water flowing in and out. Not everyone
agrees with what the engineers hope will happen in connection with that work. As a matter of fact we have found obstructions there, probably not the dam but rather the silting up of the ditch which runs from the Qu'Appelle river into Long lake, and which has been there for a long time. The water does not flow in through the old, original, natural creek; it flows through a ditch dug many years ago, and we put in a cement structure to control it. Some people think the engineers did not put the bottom of that structure down low enough, and that as a result it has something to do with obstructing the water getting in. In order to satisfy them, I think it was last spring we opened a certain part of that dike to let in more water, in order to raise the level of the lake much higher than it would otherwise have been.
I am not certain as to what has happened since that time, whether they are replacing the dike or widening the opening still further, or just what they are doing. However, the engineers are reporting continuously on the matter and some work is being done, although I am not clear as to just what it is.


John George Diefenbaker: I appreciate the work that has been done on the south side of the lake, and understand generally the plan the engineers are following. What I had in mind particularly was the request of the town of Lumsden.


James Garfield Gardiner: Have you the request there, and, if so, would you read it?


John George Diefenbaker: The matter has been brought up on two or three occasions, and an application was made directly to the Regina district office. The request is that the department bear a share of the cost of repairs to the dike on the south side of the Qu'Appelle river where it passes through Lumsden. When the dike was constructed in 1929 the federal Department of Public Works bore seventy-five per cent of the cost. The dike was constructed of earth, and a section beginning near Lake street and extending a short distance on James street was constructed of planking bolted to piling. It was thought this would last for a considerable length of time; I believe the estimate was twenty years, but as a result of the change in the flow of water consequent upon the development work which took place last year, damage occurred thereto. The result is that the dike became in dangerous condition. The request is that the town should not be held responsible for the repairs to this dike when those repairs are made necessary by the changes which have taken place in the engineering
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work near Craven, at the south end of Long lake. A considerable amount of work will be required to fix up this dike, and I think it might very well be included as part of the expenditure necessary for the maintenance of a proper level in Long lake.
In that connection let me say that the engineering work which has been done there is very important. The level of the lake is rising, as the minister has stated, and the work has been worth while in the preservation of the levels in that outstanding body of water. I ask that consideration be given the request of the town of Lumsden. That municipality is not pressing for any unfair consideration, and it seems to me their request is a reasonable one.


James Garfield Gardiner: All I can say is that I will check into the matter very carefully and take it up with the staff at Regina. I can assure the hon. member that if on investigation it is found that anything we are doing has contributed to the difficulties which are being experienced in Lumsden, in circumstances of that kind we do take care of at least some of the cost.


Joseph William Burton: Has the minister any knowledge of the number of municipalities that have been endeavouring to secure suitable equipment for the construction of dugouts? I know that quite a few have endeavoured to obtain that equipment but, owing to war-time regulations and restrictions, have found it impossible to do so. Now that the Alaska highway has been completed and work has been finished on the airports, one would expect some of this machinery to be available to these municipalities. They would like this machinery both for putting in dugouts for the benefit of their ratepayers and for road construction work.


James Garfield Gardiner: I am not in a position to state the number, but I know that quite a few municipalities have asked us to assist them in getting this equipment. We have referred all these requests to Mr. Bloom, who is in the office of the controller, where I think they have met with sympathetic consideration. This does not mean that they can all get equipment. One of the reasons for the lessening in the number of applications is the fact that our money is running out. Early in the season applications came in from municipalities which wanted to construct dugouts. Contractors who have pretty well completed their other work, of the kind mentioned by the hon. member, have come in and constructed a number, and in addition some municipalities have been able to get equipment. In that 
way we have used up all the money available for this year, so that there is not the same demand now for additional equipment.


[Stage Direction]
Item agreed to.
30. Prairie Farm Assistance Act, administration, $250,000.
George Hugh Castleden: I want to draw the attention of the minister to the particular case of a township which last year made application for the bonus. I am referring to township 27, range 19, west of the second. The first inspection was made last fall during harvesting operations, while many of the farmers themselves were away and a good deal of the grain, having been combined, was in piles in the fields. Those were the conditions under which the first inspection was made, and I believe at that time the dockage was estimated at about five per cent. Later, when the farmers hauled in their grain, the dockage was found to be about fifteen per cent, and the figures shown in the permit books in regard to dockage were much higher. Then they went through and made another survey; the chief inspector, I believe it was Mr. Scott, was sent out. My information is to the effect that his report showed that production for that township was less than eight bushels per acre. The producers in that area have been doing their very best to get fair play under the existing set-up, but in spite of the fact that the chief inspector's report showed that they came within the bonus area, they have been told that they do not qualify. Is there any way whereby further appeals can be made; what tribunal can they apply to for a further consideration of their plea? The producers have gone about this matter methodically. They have done considerable work themselves by way of making surveys, and they feel they have been discriminated against. What can be done?


James Garfield Gardiner: The practice followed is that inspectors go out and make inspections. If there is no question that they are under eight bushels, it is passed, But in cases where there is any question, they all go to the board. This is a board of three members, the chairman of which is Professor MacEwen of Saskatchewan agricultural college. Then there is Mr. Stevenson, who is here at the table with me. The third representative is really named by the Department of Finance, and at the present time is Mr. Holmes of Saskatoon.
Those three men are the board, and1 all questionable cases are referred to them. They are the board to whom final appeal is made; there is on appeal beyond them. In this particular case, however, as has been said there

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have been two inspections. One of them was made in the summer months and the other in February. One can understand why it is much more difficult to make a proper inspection in February than it is in the summer, at the time the crop is growing.


George Hugh Castleden: In, some respects, yes.


James Garfield Gardiner: Yes, in some respects. The second report made would indicate, if one takes the figures obtained at that time, that it would be slightly under eight bushels. The other figure, which was taken when they thought all the facts were available, showed over eight bushels. This matter has been before the board1 three times, and each time the board has refused to pass it. There is only one way whereby any recourse can be had. The board has final authority, and the only action that can be taken is to have the matter reconsidered by the board. That is all that can be done.


George Hugh Castleden: Were all members of the board present in each of the three reviews?


James Garfield Gardiner: The second time only two were present, but I understand they were all present the last time. The two western members considered it the first time.


George Hugh Castleden: Nothing further can
be done; that would be the position?


James Garfield Gardiner: Nothing more than make an appeal to the board, and I do not imagine, after the board have considered it three times, they would be very anxious to consider it again.


Ernest George Hansell: I should like to ask a question with respect to the regulations governing rectangular plots within a township accepted for benefits under this act. I know the government has made the regulation with a view to taking in certain areas in a township, where perhaps the whole township may not get the average crop required to meet the conditions in the regulations. I think that was a good move, but it does complicate matters to some extent.
I shall explain to the minister what I mean.
I have in mind a case where all the sections coming down the side of one township are not in a position to receive benefits from the drought bonus. All the other sections in the township, because that particular block went below the average, receive the benefit' of the bonus.
The condition which has arisen is this. One man whose property is in a section bordering on the block that gets the benefits had only six and a half bushels to the acre in the last



REVISED

[Stage Direction]
year's crop. However, his neighbour, who is within the block which receives the benefit, had an average crop greater than did this man iu question. I can understand the government's policy, with respect to their not being able to deal with every case on its individual merits, but one can hardly explain that to a farmer who finds that his neighbour gets a higher average on his crop.
James Garfield Gardiner: Is that a wheat crop?


Ernest George Hansell: Yes, a wheat crop. The one man receives the benefits of the bonus, while the other, who has a smaller crop than his neighbour, is ruled out because he does not come within the specified rectangular block. Could the minister change the regulations in some way so that that peculiarity would not exist? I believe that the minister would agree it is unfair, and that the regulations should be changed to meet circumstances of that kind.


Joseph William Burton: Before the minister replies I should like to place on record a similar example. Before doing so, however, I would say that while listening to the minister's explanation I noted that he made the remark, when another item was under discussion, that we were paying money to some people to get them out of submarginal areas, and that consequently it was not deemed advisable to pay them money to remain on submarginal lands. I appreciate that explanation, and it covers the situation very nicely. Yet at the same time it does not cover problems such as described by the hon. member for Macleod, nor does it cover problems such as I shall now draw to the minister's attention. In the past I have noticed a number of similar cases.
In township 37, range 24, in the municipality in which I live, they had a low yield; yet that township cannot be considered submarginal land. Over a period of years they had produced in that township very good crops. This year, with the exception of about two sections in one corner of the township, they had poor crops. In that corner they had one or two fairly heavy showers. The farmers in that corner of the township were not better farmers than those in the remainder, but the showers had helped them out. It was found at a later time that the township was slightly over eight bushels to the acre. The question still remains in the minds of many people in that township as to whether the actual returns from those two sections were as large as had been reported.
Leaving that aside, however, the fact is that the yield in the rest of the township was away below eight bushels to the acre. What these people wanted to do was to have the remainder of the township, less those two sections, blocked



EDITION

[Stage Direction]
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[Stage Direction]
over to an area which was already entitled to receive assistance. They were informed, however, that that could not be done. I believe that about one-third of the township west of this area was permitted to block itself with the township lying to the south. That is, they were in range 25. It was township 36 which was entitled to receive the assistance, and the department allowed township 37, range 25, to block a certain area over to 36. But when the people of township 37, range 24, wanted to block their territory over to another township they were told that, under the act, that could not be done.
It is difficult for people to understand why they cannot receive any benefit from this plan, simply because one comer of the township happens to be a few bushels over. They do not understand how this plan is going to help them, and other townships which have been paying into the fund right along. Then, when they see their neighbouring township blocked in with another township receiving assistance, they cannot understand why they are refused that assistance. I wrote to the minister about this case, but both he and I have been on a rather long journey since. I have not received any reply and I was just wondering whether he got my letter.
James Garfield Gardiner: The reason why I have not replied is that I have made a test case out of this one and have submitted it to the justice department. They gave me one reply, but I was not satisfied with it and I sent the case back to them. I did not want to reply to the hon. member until I was sure of what I was talking about. We said that if a block of townships or even one township were already under the act and there were at least nine sections which were lying alongside and which were rectangular in shape that could qualify, they could be declared in. That is what happened in connection with this township. It was taken in and we took in nine or more sections of the next township.
The other group of sections the hon. member is speaking about were over in the next range. I am not a lawyer and I certainly am not a constitutional lawyer. According to the act the minister is to make the payments, although they are made according to the method we have been discussing here. However, the act states that the minister has authority to make payments. The only way I can make payments under the wording of the act is to make them to those townships where it is admitted that payments can be made.
I contend that I am only able to make payments in a township such as that even when only part of it is considered as being in, if it
(Mr. Burton.]
is declared a township. I contend also that the other township lying alongside should be able to get in because it is alongside one declared in. If I am right, the act will not need any amendment in order to get the decision desired here. If I am wrong, the act will require some amendment in order to have that decision given. I am not in position now to make a reply, but I hope to be in a short time.
The other question raised by the hon. member for Macleod is one that has been before us ever since the act was first drawn. It would not make any difference whether such a farm was on one of those borderlines, that is between a township and the adjoining nine sections, on the borderline of a township that is in and a township that is completely out. You will find farmers on one side of the road who have yields under eight bushels to the acre, and farmers on the other side whose yields are above eight bushels to the acre. But there is one thing that we should not lose sight of. We are not paying on wheat. This has nothing to do with wheat as such. We simply use wheat as a barometer to find out what the weather is like in a particular district.
A farmer on one side of the road may have wheat that runs twenty bushels to the acre, while a farmer on the other side may be getting only five bushels to the acre. This may be due entirely to the fact that one man's wheat was on spring ploughing, while he had put his coarse grains on summer-fallow, whereas the man across the road put his wheat on summer-fallow. If you are going to determine whether or not both men are in exactly the same position you would have to take a complete record of everything that had been produced on the farms; you would require to have a complete record of the operations of both men in live stock, coarse grains, vegetables, poultry and everything else.
We took the simpler way. We decided to take a township and allow nine sections in on the border, or take away nine sections in order to get away from any zigzagging lines. It is impossible to determine just because one man had six bushels to the acre and another had four, that one should be in and the other should be out. We have to draw a line somewhere, and no matter how you attempted to draw it you would run into difficulty. You could not have lines running angleways across a man's farm; you have to go up one side and down the other. No matter how you drew the line you would always have some farmers outside who had a lower yield of wheat. However, when you got a few miles away that would be corrected by the fact that they all would have more.

Supply-Agriculture


Ernest George Hansell: I expect that I shall have to accept the minister's statement. I agree, of course, that it presents quite a problem, but I suggest that if there is a section or a farm, or whatever size the piece of land may be, that borders upon the nine sections or whatever the rectangular may be, it should receive the benefits provided that the yield is below the minimum. I make that suggestion to the minister and hope that he will take it into consideration. It would not be so bad if all those in the township who were receiving benefits averaged less than the man, who was not receiving benefits, but in some cases they average more. I ask the minister to consider my suggestion.


Frederick William Gershaw: I find that most people appreciate this legislation; they find it of great help and they want to see it kept going. However, I also find that a lot of bitterness exists for the reasons that have been mentioned. One man with a yield of nine or ten bushels will be getting the bonus and another fellow with a yield of six, five or even, four bushels to the acre cannot get the bonus. I realize that this is not an insurance scheme. If it were, it would be under the province and the premium would be much higher.
I should like to suggest to the minister once more the possibility of having each individual investigated. I know it would be an impossible task to have a special man go out to each farmer in the area, but I was wondering if it would not be possible to get the information from the municipal councils. They usually know the yields. Then investigation could be made of those who were reported by the municipal councils. I have found it impossible to answer a man who says, "Why should I not get the bonus when I have a complete crop failure when some other man with a much larger yield is able to get it?" I am wondering if the minister will not consider this suggestion. I am sure he has considered it already.
'Mr. QUELCH: Most of the complaints I get are similar to those which have been enumerated by other hon. members. However, there is another group of farmers who are always penalized under this act. I am referring to the farmer with fairly poor land who lives in a township where the majority of the land is good. Even though such a man has a crop failure he can get no benefits because the average yield of the township is above twelve bushels to the acre. He suffers because the majority of the land is good while his is poor.
I remember that when this question was raised some years ago the minister suggested that it might be possible to define the areas on the basis of soil classification. He said at that
100-324i
time that the department was investigating the question whether it would be possible to define areas on the basis of soil classification rather than on the township basis. Would the minister say whether anything has been done in that regard.


James Garfield Gardiner: The greatest difficulty is that you would have to eliminate all submarginal land if we proceeded on the basis *ny hon. friend suggests.


Victor Quelch: I am not referring to submarginal land but simply to lighter land.


James Garfield Gardiner: There are different ideas as to submarginal lands. Somebody would have to make up his mind what was to be eliminated. I think the simplest way to eliminate these lands is by the method we are pursuing, to take a block of land and say chat if the majority have good jerops in that area and there are people in that district who cannot get the average yield there is something wrong with the land or something wrong with the man who is farming it. There is the additional fact that men farm in different ways. A man with live stock is more anxious to grow coarse grains than wheat, and he may put his wheat on land that is not quite so well prepared. He may put his wheat on his spring ploughing, and he may put his coarse grains, in a year that was dry, on his summer-fallow in order to make sure that he will have feed grain. The present method makes allowances for all that. I do not see how you could do it in any other way. I have not been able to satisfy myself that any other method would be better.


Victor Quelch: Another thing that is giving the department a headache is this question of deciding whether a father and son shall be considered as farming one or two units. I have one or two of these cases. I have not been able to understand the basis for some of the decisions that have been made. In two cases that seem identical you will have a decision in the one case that the farms are two units, and in the other case they will be regarded as one unit.


James Garfield Gardiner: Has the hon. member experienced many of these difficulties within he last two months?


Victor Quelch: I have two or three cases running around just now.


James Garfield Gardiner: The reason why I asked the question is this, that the board has been changed because our recent chairman became organizer for one of the political parties, not the Liberal party. He has gone and we now
Supply-Agriculture

have a new chairman. When the new chairman took over, we had a meeting here. I had discovered just before that, that a set of regulations had been drawn up by the old board. They were really interpretations of the regulations and many of them had to do with this father and son question. I took objection to that on the ground that the board were passing regulations that only the governor in council could pass and that the regulations as passed by the governor in council contemplated every case being dealt with separately on its merits. The board was to consider all the facts and. then give its decision, and that is the basis on which the new board has been operating. They have reported to me that they are finding it much more satisfactory to take each case separately and deal with it on its merits, go into all the facts and give their decision. All we have in mind is this, that a person must be debarred from trying to make two collections when there ought to be only one. For instance, a man may have 800 acres under cultivation and he may say: If I run this myself I will get one payment up to 200 acres, but if I divide the farm into two farms of 400 acres each, I shall get the bonus twice on the 200 acres. We are trying to eliminate that kind of case. We want to pay the bonus in a bona fide case because our intention is to encourage fathers to turn over their land to their sons when they reach a certain age, rather than have the son working under the father all his lifetime. That is the basis on which we are now proceeding, and I do not think there will be as much difficulty in the future.


Victor Quelch: Is there any intention of lowering the age, because boys start farming now at eighteen and in Alberta a young man can vote at nineteen, but here in order to qualify he has to be twenty. I think the age should be lowered to eighteen.


James Garfield Gardiner: If they do not live with their parents they can qualify at any age. Twenty is the age when they are living at home.


Victor Quelch: It is in those cases that the iifficulty arises, when the boy is living with ais father. It is hard to decide whether it is two units or one.


James Garfield Gardiner: We are considering it continuously, and I am glad to say that my views are similar to those of the hon. gentleman.


Ernest George Hansell: I appreciate very much the kindness and the valuable assistance which the superintendent of the P.F.A.A. in Edmonton has given to me in the past few years.

There was a time when I criticized the administration rather harshly. That was when the bonuses were first being paid and the organization had not quite found itself. Things were in rather a muddle then. But since they have become organized I find that the department is quite efficient. Naturally I have not been able to get all I wanted, but they have taken an interest in the cases that I have submitted to them, and while I am handing out bouquets I might also say the same for the minister, who has looked into one or two tough cases for me.
I should like to ask a question in regard to the regulation governing payments in the case of a man who operates a farm, part of which is irrigated. The particular case I have in mind is that of a farmer who has fifty acres of irrigated land and another farm some forty or fifty miles away. Because he has fifty acres of irrigated land on one parcel of land, he cannot get any benefits under the act in respect of his farm that is forty or fifty miles away, even though it would qualify. I would not be so persistent if the farmer who has this irrigated property had had a good crop, but one year it was very dry and the weeds did not come up that year. Next year he put in some flax on those fifty acres of irrigated land. The weeds came up and he had a tough time getting a crop of flax at all. He raised only a very small crop. He naturally expected that his other farm was going to help him out. Tlis other farm went below the required average bushels per acre, but because he had this irrigated land he could get no benefits under the act in respect of the other farm. I am sure that the minister will look into this case if I give him the particulars. This cannot be an isolated case; there must be others similar. Could the minister throw some light on a case of that kind?


James Garfield Gardiner: I am told by a member of the board who is here that cases of that kind have not come here. I am told that there are a few cases of that kind in Alberta. The wording of the regulation is, "farm lands operated by a farmer who as owner or tenant also operates more than fifty acres of land which is part of an irrigated system." It would depend entirely on the interpretation placed on the land operated by the farmer. If a man has an irrigated farm and another farm one hundred miles away, let us say, it would be rather a stretch of the imagination to say it was the same farm. Even if it is forty miles or twenty miles it is the same thing. I think if they were just a mile apart, if a man lives a mile away and operates both places from the same buildings, it would be difficult to give it any other interpretation

Customs Tariff
than the one which is given here. It has not come to my attention on that basis before. I think I had better get a legal opinion on it, and if they adopt that view I would have to have the regulation amended. It is not in the act; it is in the regulations.


Ernest George Hansell: These farms are about
fifty miles apart. I can quite understand that if two farms are about a mile or so apart you could use the same equipment on each farm. But this man cannot do that; he cannot haul his equipment every few days about fifty miles. In one letter I received from the department at Edmonton-without mentioning the name of the case-a paragraph reads this way: Mr. So-and-so

-had a tough break with his flax crop. Nevertheless according to (g) of clause 6 of the act we cannot pay him a P.F.A. claim for 1943.
I can quite understand that he cannot have the benefits of the scheme if he is working one farm and another adjacent to it, if he has irrigated land; but a man who does not get very much income from that irrigated land and has a farm which he has to operate separately some considerable distance away should, it seems to me, have the benefits of the act if that distant farm yields only a small average crop.


James Garfield Gardiner: Send the case to me.


Ernest George Hansell: Thank you; I will.


[Stage Direction]
Item agreed to.
SI. To provide for wheat acreage reduction payments; for administration expenses in connection therewith, and for temporary appointments that may be required notwithstanding anything contained in the Civil Service Act, $4,265,000.
James Garfield Gardiner: That has gone out, anyway, for this year.


[Stage Direction]
Item agreed to.
Progress reported.

[Stage Direction]
The house in committee of ways and means, Mr. Golding in the chair.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.

[Stage Direction]
2a. Rabbits, pure bred, for the improvement of stock, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Gordon Graydon: I take it that this item extends to all other breeds of rabbits the same provisions, so far as entry is concerned, as have previously been accorded to the Chinchilla, the Angora and Sable. Is that the idea?


James Lorimer Ilsley: Yes; that is the effect of the item.


Gordon Graydon: I take it that this does
not apply to rabbits imported generally, but only for breeding purposes.


James Lorimer Ilsley: Pure-bred rabbits for the
improvement of stock.


[Stage Direction]
Item agreed to.
Item 156 agreed to.
158. Methyl alcohol, subject to the provisions of the Excise Act, and regulations, per proof gallon: British preferential tariff, 20 cents; intermediate tariff, 20 cents; general tariff, 20 cents.
Gordon Graydon: Are these items bottles? Does that apply only to new stock?


James Lorimer Ilsley: There is no change in the
bottle item.


Gordon Graydon: They are just put in
because they are in the item generally?


James Lorimer Ilsley: That is right.


[Stage Direction]
Item agreed to.
Items 188, 206c and 216d agreed to.
219a. Non-alcoholic preparations or chemicals for disinfecting, or for preventing, destroying, repelling, or mitigating fungi, weeds, insects, rodents, or other plant or animal pests, n.o.p.:
(i)	When in packages not exceeding three pounds each, gross weight: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 25 per cent.
(ii)	Otherwise:	British preferential tariff,
free; intermediate tariff, 15 per cent; general tariff, 15 per cent.
James Lorimer Ilsley: There is an amendment to
219a. The motion will be that the rates of duties of customs set opposite sub-item (ii) of item 219a as contained in resolution No. 2 of June 26, 1944, be amended to read as follows; British preferential tariff, free; intermediate tariff, 7J per cent: general tariff, 15 per cent.
The goods entitled to entry under 219a (ii) as worded prior to June 27, 1944, were admitted at the Canada-United States trade agreement rate of 7J per cent. The intermediate tariff rate of fifteen per cent is now reduced to 7J per cent in order to ensure that
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all the goods coming under item 219a (ii), as widened in scope, will be accorded the same tariff treatment.


Colin William George Gibson: I so move.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
220. All medicinal and pharmaceutical preparations, compounded of more than one substance, including patent and proprietary preparations, tinctures, pills, .powders, troches, lozenges, filled capsules, tablets, syrups, cordials, bitters, ano-dymes, tonics, plasters, liniments, salves, ointments, pastes, drops, waters, essences and oils, n.o.p.:
(i)	When dry: British preferential tariff, 17J per cent; intermediate tariff, 25 per cent; general tariff, 26 per cent.
(ii)	Liquid, when containing not more than two and one-half per cent of proof spirit: British preferential tariff, 20 per cent; intermediate tariff, 40 per cent; general tariff, 40 per cent.
(iii)	All others: British preferential tariff, 60 per cent: intermediate tariff, 60 per cent; general tariff, 60 per cent.
Provided that any article in this item containing more than forty per cent of proof spirit shall be rated for duty at, per gallon: British preferential tariff, $3: intermediate tariff, $3; general tariff, $3, and British preferential tariff, 30 per cent; intermediate tariff, 30 per cent; general tariff, 30 per cent.
Provided also, that drugs, pill-mass and preparations, not including pills or medicinal plasters, recognized by the British or United States pharmacopoeia, the Canadian Formulary or the French Codex as officinal, shall not be held to be covered by this item.
George Hugh Castleden: What was the duty on these articles previously under item 220?


James Lorimer Ilsley: The same. Item 220 included chemical preparations before. Chemical preparations are now provided for under a separate new item designated as 220a. There is no change in the rates.


George Hugh Castleden: There is no change in ;he rates?


James Lorimer Ilsley: No; it is to take chemicals jut.


[Stage Direction]
Item agreed to.
Items 220a, 300, 316a and 326b agreed to.
[DOT]526ft. Fresnel type lenses, sections and globes, }f glass: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.
George Hugh Castleden: What is the function [DOT]of this particular item, and why is thirty per cent placed on the general tariff?


James Lorimer Ilsley: There is no change in the rates of duty. It is free under the British

preference and free under the intermediate. There is a change in the description of the lenses merely to facilitate administration.


[Stage Direction]
Item agreed to.
Item 356b agreed to.
1)08. Malleable sprocket chain and link belting Chain of iron or steel, including roller chain of all kinds for operating on steel sprockets or gears, when imported by manufacturers of agricultural implements for use exclusively in the manufacture of agricultural implements, in their own factories, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
John Ritchie MacNicol: In reference to a lot of the items commencing with 408, I am not going to oppose the proposals, but I should like to ask the minister if any representations have been made by a few dozen or more plants making agricultural implements. Have any or a number of the agricultural implement manufacturers made any representations? Perhaps they have not because the making of the implements free at the moment does not mean very much anyway. They cannot buy them on the other side in any event. I suppose every local manufacturer has his price set to-day and can get almost anything that he wants if he has the implements for sale. After the war, of course, a succeeding government may or may not change this schedule as they see fit. Have any representations been made.


James Lorimer Ilsley: I think I am safe in saying that no representations whatever have been made by the agricultural implement companies or by the companies manufacturing parts, except in respect of imports needed in the manufacture of parts. Representations have been made with regard to those.


John Ritchie MacNicol: Take a company' like the Massey-Harris company. At the moment, apart from making agricultural implements, a large part of their plant is engaged in the making of munitions of war-


James Lorimer Ilsley: Yes.


John Ritchie MacNicol: -and various parts of war equipment. I presume every other agricultural implement plant is doing the same thing. If they have not made representations it is evidence that they are not interested1 at the moment.


James Lorimer Ilsley: They have not made any to me.

Customs Tariff


Mr. MACDONALD (Brantford City):: There are some representations that I should like to make to the committee in regard to agricultural implements, and probably it would facilitate the work of the committee if I made them, all at this time. I referred to the removal of the duty on agricultural implements when the budget was being debated in the house. At that time I said that I could not approve it. I have given the matter careful consideration since, and I am still opposed to the removal of the duty on agricultural implements.
I do not think the committee has taken into consideration the great value that this business industry is to Canada. There are a great many men employed in the manufacture of agricultural implements. My fear is that when the war is over, the removal of the duty might have a detrimental effect on the workers in these factories. I realize that the price of farm implements is of considerable importance to the farmers of the country, but sometimes I think it is overemphasied. Some years ago a paper published in western Canada called the Norwest Farmer, after making inquiries, said that a farmer spent only three cents of every dollar on farm implements. Since that time, Mr. Chairman, I have gone over the figures of the 1930 census, and, according to my computation, out of every dollar the Canadian farmer receives he spends 3*3 cents on farm implements. I have d break-down of these amounts, if hon. members of the committee are interested, and I should be glad to place it on Hansard with the consent of the committee.


Joseph-Arthur Bradette: Has the hon. gentleman the consent of the committee?


Gordon Graydon: What is this?


William Ross Macdonald: The statement shows the gross average income for 1938-40 from the sale of farm produce in Canada, and it shows the total sales of farm machinery during that period.	,


Thomas Reid: What is your authority?


William Ross Macdonald: I
am coming to that. My figures are based on the 1930 census. From the figures obtained at that time I show what has been spent on other goods bought by the farmer. All the goods are not included, so that I have taken some of the
items from the United States census. I believe the table will be of benefit to hon. members of the committee. It is as follows:


THE FARM DOLLAR-CANADA
[Stage Direction]
Gross income average 1938/40 (from sale of farm produce).. Farm machinery sales average 1938/40 ...
Per cent
$1,170,000,000	100
39,000,000	3-3
Based on Canadian figures
(1930 census) Per cent
U.S. (1931) Per cent
Farm machinery and
repairs	
Taxes	
Rents	
Feed	
Fertilizer	
Seed	
Labour	
3-3	3-2
5	6-7
1	6
4	5-9'
0-7	2-3
1-5	
8	6-5
[Stage Direction]
	23-5
Based on equivalent U.S. figures
Interest	
Retained on farm for food, feed, seed... Food purchased .... Clothing purchased - [DOT] Miscellaneous family
maintenance	
Autos and trucks bought and maintained	
Miscellaneous operating expenses	
10	7-6
20	14
12	12-5
14	14-1
10	9-9
5	6-7
5-5 	 76-5	4-6
100-0 100-0
* (with seed)
Assuming that the average farmer spends $1,000 a year, of which 3-3 per cent is spent on farm implements, it means that he will spend $33.33 annually in this way. But I must remind hon. members that half that amount is spent on tractors, which come into Canada duty free.
Gordon Graydon: We do not manufacture any tractors here, as I understand it.


William Ross Macdonald: That is what I say; all tractors come in duty free. Therefore, of the $33.33 the farmer would spend on farm implements, only half would be spent on implements other than tractors.


Ernest Edward Perley: What percentage of his purchases of farm implements are tractors?


William Ross Macdonald: Practically fifty per cent. So that he would spend only $16.66 out of his $1,000 on implements other than tractors. If we figure the duty of 7i per cent on $16.66, it comes to exactly
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$1.25. So that the removal of this duty on farm implements will save the farmer who spends $1,000 a year a total of $1.25.


Joseph William Burton: In computing his figures did the hon. gentleman also take into consideration the repair parts bought by the farmer?


William Ross Macdonald: Yes; the figures I have placed on Hansard take repair parts into consideration. No one has contested these figures, nor have I seen anything which would suggest that farmers spend more than this amount on farm implements.


Gordon Graydon: If that is the case the mountain has laboured and brought forth a mouse, so far as the farmer is concerned.


William Ross Macdonald: The hon. gentleman may be right. I felt that I should bring this point to the attention of the committee and more particularly to the attention of those hon. gentlemen who believe the removal of this duty will be a great thing for the_farmers. If I could help the farmers I would certainly do so, but $1.25 out of every $1,000 they spend is not a very magnanimous gift. The figures I have given are the latest I have been able to obtain. If any hon. member has been able to get other figures I am sure the committee would be glad to have them. Therefore, Mr. Chairman, the removal of this duty will not give the Canadian farmer any greater ability to compete.
What about the worker? If the removal of this duty results in less employment I am afraid the adverse effect on the worker will be much greater than the beneficial effect on the farmer. Farmers are interested in maintaining a healthy home industry, because employment is dependent upon it and employment means an ever-expanding home market for farm products. I believe the farmer is just as much interested as anyone elsfe in having a large home market for his products.
May I also bring to the attention of the committee the fact that all the goods the farmer produces are not on the free list as far as the tariff goes. After listening to discussions in this house one might come to the conclusion that all manufactured goods are protected by high tariffs while farm products have no tariff protection. Let me remind hon. members that a great many farm products have substantial tariff protection. I will not take the time of the committee to mention the duty in each instance, but there is a substantial duty on live cattle, sheep, hogs, 
fresh beef, Iamb, canned meats, baby chicks, bacon and hams, beef in brine, lard, tallow, eggs in shell, cheese, butter, powdered) milk and so on. I am quite confident that if many eggs were brought into this country, or if a great deal of butter came here, the very first people who would rise in their places in this house and demand that something be done would be those representing rural constituencies. So that it is not entirely one-sided; there are tariffs on manufactured goods and tariffs on farm products.
My objection to the removal of this duty at this time, however, is rather to the way in which it is being done. As I said during the budget debate there has been virtual agreement among the united nations, although it has not been put in writing, to reduce tariffs after the war by multilateral agreements. In my opinion at all events it is a mistake to adjust tariffs while the present upset economic conditions prevail throughout the world. It is a mistake to adjust tariffs downward without some compensating advantages from other countries with which we are trading. The best example of that is, I think, to be found in the action taken recently by Canada in connection with cream separators. In the United States they have a tariff against us of 12J per cent on cream separators selling for more than $50. I am not particularly blaming the government in this connection, because apparently the removal of this duty meets with the aproval of all hon. members, and each must accept his share of thg responsibility. If this matter had been handled judiciously by parliament, instead of putting cream separators on the free list we could have arranged a saw-off with the United States, so that if their nationals were to be granted the privilege of shipping cream separators into Canada without the payment of duty, Canadian nationals would have a similar privilege. Under the method which has been adopted, however, we have thrown away our bargaining position in that respect.


Mr. LEADER:: What about agricultural implements entering the United States from Canada. What duty is there against them?


William Ross Macdonald: 
Harry Leader: I had not intended to
speak at this time, but the remarks of my esteemed friend, a gentleman I have grown to like more each year I have sat in the house, have prompted me to add a word or two. The committee will recall that I asked him a question as to the duty on Canadian farm machinery entering the United States.


William Ross Macdonald: I did not hear it.


Harry Leader: I asked the hon. member
as to what was the duty on Canadianr-made agricultural implements entering the United States.


William Ross Macdonald: I
thought the hon. member was referring to cream separators.


Harry Leader: No; the hon. member said that he was talking about cream separators at the time. My impression is that agricultural implements have entered the United States from Canada free of duty for many years.


William Ross Macdonald: Not cream separators.


Harry Leader: I am talking about agricultural machinery.	_


John Ritchie MacNicol: You cannot cut wheat
with a cream separator.


Harry Leader: I should also like to remind the hon. member, and the Liberal party, to which I am an adherent, if nothing more, that implements free of duty, for farming operations, have formed a part of the Liberal platform ever since 1919. After twenty-five years that promise is being redeemed. And yet the hon. member believes it is a step in the wrong direction.
Well, coming from western Canada, being a farmer and having purchased a considerable amount of machinery for farming-and mostly Canadian machinery at that-I feel that this relief is about due. In my view the duty does mean something to the farmers who have to purchase that machinery. I believe that a monopoly exists in regard to farm machinery, and that removing the duty does not mean anything, so far as prices are concerned, unless some other measure is taken.
I think the hon. member said that it costs about three per cent of the farmer's dollar to maintain machinery, and he challenged anyone in the house to offer figures to controvert that statement. All the hon. member has to do is to look into what the government will lend a veteran who goes to take up land. He will be granted $4,800 to purchase the land, and $1,200 to buy the machinery. The purchase price of the machinery amounts to twenty-five per cent of the total loan. I say from experience that if a man wishes to farm now he will pay approximately fifty per cent for farm machinery and fifty per cent for land. It is a fifty-fifty proposition. To start farming now one would have to lay out as much money for machinery as he would for the land.


William Ross Macdonald: I was talking about the annual outlay.


Harry Leader: Well, of course you cannot farm unless you get started. I am talking about the farmer who wants to get started on the farm, and who will need as much money to equip the farm as to buy the land.


Stanley Howard Knowles: You know something about farming.
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Harry Leader: Well, I am sure if the hon. member for Brantford City does not know as much about farming as I do, he knows far more about most other things.


William Ross Macdonald: Oh,
I would not agree with that.


Harry Leader: I have .always respected him very much, and I honour him very highly. However, I did not wish to go home to my constituency and tell them that I had sat idly by in the House of Commons while Liberal members, members of the Progressive Conservative party, members of the Cooperative Commonwealth Federation party and members of the Social Credit party had stood up and defended the duties on agricultural machinery. I would not feel that I had done my duty. So that I now rise again to protest against the hon. member's statement that this is a step in the wrong direction. I believe that it is in the right direction, and that it is just overdue by twenty-five years.


Mr. FRASER (Peterborough West):: The hon. member for Brantford City mentioned that the duty was being taken off cream separators. I quite agree with what he has said. The removal of this duty is going to make a great difference to workers in Canada after the war is over. The duty being taken off cream separators this year will not save the farmers very much, because there are very few cream separators coming into this country from the United States or any other country. After the war is over I am wondering what the workers in one of the largest cream separator plants in the world-the one in Peterborough-are going to do. They will be out of work. Many of those men and women are buying homes to-day. If they are thrown out of jobs through machinery entering Canada ' free of duty, machinery which will be coming into Canada from Sweden and from other countries, they will have a' just grievance. I hope this measure will be taken off the books next year.


Thomas Langton Church: The policy of the government respecting customs tariff item 409, which is now before us, was set out in the budget speech by the minister. The principle affecting all these agricultural machinery items is the same. The government to-day does not know where it stands. I know that the agricultural implements industry has been contributing a great part to the war effort. I have seen the plants of the Massey-Harris Company in Toronto, which are busy on war work, almost entirely. There are no implements coming into Canada owing to the war, tariff or no tariff.
Whether this item calls for duty, or does not call for it, the fact remains that the policy of the government at the present time in respect of this and following items is simply one of shadow-boxing and mere window-dressing. That is all it is, and with a war on it means nothing. As hon. members know, the government of Sir Wilfrid Laurier and Mr. Fielding dealt with this problem, and adopted a policy of imperial preference. That was followed for some years with our best steady customer, Britain.
Someone may ask what was done at the meeting of Prime Ministers which took place in London, England, in May. We understand that matters of imperial tradte, and trade of all kinds, and affecting all classes of materials, were dealt with at that conference and the future of imperial preferences was discussed. I might add that when the Drury government was in office in Ontario some of the same proposals were made with respect to agricultural implements. While he was premier, Mr. Drury came to Ottawa. At that time he headed a so-called farmer-labour government. What did they do? They came here and they addressed Mr. King's cabinet. Mr. Robb was Minister of Finance. They advanced the same proposals, through a brief of the Canadian council of agriculture, for free trade in agricultural implements and all along the line. They said that protection was an unmitigated evil, that they wanted to get a spade to dig and root it out. Protection for this industry was the policy of all governments in the early days of this country to 1921. What did the present government do when they came into office in 1,921? They did not reduce tariffs all along the line; they did little or nothing to lower tariffs.
Tariff protection has created work and employment. We have a war on now, and this is just some window-dressing instead of doing something for the farmers on the prairies. The best friends the farmers on the prairies have are the people in the east. I believe in the policy of confederation, each for all and all for each. What is for the benefit of one province is for the benefit of them all. There is a war on; we have had the Ogdens-burg agreement and others, and the result of war is that there is very little of this type of agricultural implements being shipped across the border into Canada, and our agricultural industries are converted to other war work accordingly.
What is going to happen to these men in this industry after the war, the men who work at the Massey-Harris plant in Toronto, the plant in Brantford and in many other places?

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When the war is over what is going to happen to labour because of this policy? Do not overlook the fact that the United States with its population of 130,000,000 had the Hawley-Smoot tariff regarding all of these industries. In the British House of Commons that tariff was called the eighth wonder of the world in high protection. The Republican party may have a majority in congress and their policy as given at Chicago two weeks ago will be to protect their home market all along the line for themselves. Why should not they protect their home market? Why should we not adopt the policy of Sir Wilfrid Laurier and Mr. Fielding of empire preferences also, as a home-export market? When the war is over, what is to become of the men in this agricultural industry
What has been happening in the other dominions? Mr. Curtin, Mr. Fraser and the other prime ministers have been sounding the same battle cry of empire trade and the empire family first over in London. I believe this matter was discussed in London when our Prime Minister was there. What is to become of the industries like the agricultural industry and hundreds of others? Something should be done about it. Take Russia with its population of 180,000,000 people. Russia is going to look after her own people and her own home markets by high protection. They have already announced a policy along those lines, and Britain has a separate bi-lateral policy with them for twenty years, signed at Moscow.
I was surprised when I looked over the budget to find that the government was all at sea on this empire trade question. The people in the British empire believe in the preference. The British empire has been our best customer and our steady market; it has been the best friend of the prairie provinces. We have been able to sell our products in exchange for goods and services. The imports and exports have created a tremendous amount of work and the farmers of the prairies have been provided with a steady market, not one that is here to-day and gone to-morrow, gone for the cry of internationalism.
The British empire is going into liquidation by default unless we look out and hold to our home market for our family first and any surplus for others. We should take a leaf out of what Russia and the United States are doing in connection with their industries, in safeguarding their own home market. When the war is over, there will always be tariffs. Look at the resolutions which were passed a week ago at Chicago by the Republican party. They are going to go back to the old days when they looked after their own people first, and the same with Russia with her 180,000,000 people, and who can blame them? Great
Britain has lost a quarter of a billion pounds in investments overseas. These have been marketed and put up as a pledge for the war, for munitions and food. She has lost all that and she needs the support of a policy like that adopted by Sir Wilfrid Laurier and Mr. Fielding. They were both Liberals, but they gave Great Britain preference and increased our trade with Britain and that of Britain with Canada.
Is the government going to throw overboard the Ottawa agreements for separate trade agreements? If so, they should announce their policy to Australia and New Zealand, If so, Canada will be sounding the death knell of the British empire unless we have this empire trade and .preference. I believe the prime ministers discussed this whole problem in London. The British empire will go by default and into liquidation unless home markets are available as they have been in the past.
Let me refer to this particular item. I remember when Mr. Drury came here and said that protection was an unmitigated evil. I was in the railway committee room when a large deputation representing the Canadian council of agriculture came here. They attacked the system which had been built up in this country and which had done so much for this country and for the empire. They said it was an unmitigated evil and should be wiped out altogether. Thousands of people left Ontario to go to the United States for jobs, many of them returned soldiers from the last war who had fought at the risk of their lives for this country. We are dealing only with this particular industry, but when the next budget comes down it will sound the deathknell of the automobile industry and many other industries.
I am in complete sympathy with the farmer because I know he has had to pay too much for these implements. When I first entered this house I suggested that the minister should have an expert in his department who would set a fair price on these agricultural implements to be paid by the farmers on the prairies.
This question will have to be solved in the next election. When the war is over there will be tens of thousands of our workers out of work. I remember when ward 5 in Toronto, at present represented by the hon. member for Davenport and part of which I represented when I first entered the house, part of it in the northwest, was almost an open field. The streets no-th of Queen and running west from Bathurst, Markham, Palmerston, Euclid, Manning, Shaw, from Queen to Bloor; all those streets for a mile and a half were built up by
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houses erected in all these areas for the implement and other industries; also where the late Colonel Dennison, our magistrate, lived.
Under the protectionist policy that part of the city was built up. The workers bought their own homes and they did a great deal for Canada and for the British empire. I believe in protecting the farmer because he has had to suffer a lot in the past. Over ninety per cent of our industry owners were all right; but a small per cent of the manufacturers wanted to claim all the benefits of protection for themselves and give nothing in return to the consumer. After the war our own empire family should come first with Canada. The mother country wants to exchange goods and services along these lines.
Unless we and New Zealand and Australia help the mother country the British empire will go by default. I do hope that the Minister of Finance will declare before parliament closes what the policy of the government is going to be regarding preferences and empire trade all along the line when the war is over. If free trade has its way I believe that not tens of thousands but a million and a half of our population will have to go to the United States to look for work. You saw what happened at the Chicago convention last week, and there is another convention meeting there this week. A resolution was proposed that after the war they go for their own home market. I plead with the government to announce their policy regarding preferences and empire trade. Let the mother country know what you are going to do about them. These preferences should be brought up to date to meet modern conditions. Some of the duties are all right in some respects, but other duties undoubtedly should be protective. The United States and Russia are going to be the most highly protected countries in the world, war or no war. Britain has an agreement with Russia to-day, in which the dominions have no part, covering some of the matters to which I have referred to-night.


Percy Ellis Wright: I had not intended to take part in this debate since I covered the ground pretty fully in speaking in the budget debate, but I could not let pass unchallenged the statement of the hon. member for Brantford City with respect to the cost of farm implements on the average farm. In twenty-five years of farming in western Canada it has cost me approximately $8,000 for farm machinery and repairs, or roughly $400 a year, which is considerably over the $1.65 suggested by the hon. member for Brantford City.


William Ross Macdonald: I said 3-3 per cent.
[Mr. Church. 1


Percy Ellis Wright: That is 3-3 per cent of the average income. It certainly costs more than that in western Canada, and anyone who has farmed in Canada will bear me out in my figures as to the approximate cost of farm machinery on the average farm in the west.
This tariff item would be helpful in reducing farm machinery costs, provided always that the reduction in the tariff is carried through into the price of the machinery. But that has not happened in the west, and nobody knows it better than the present government. In 1935 they reduced the tariff from 25 per cent as it was under the Bennett government to 121 per cent, and promptly the price of farm machinery went up by 2-4 per cent. That certainly indicated to me, and I think to the people of Canada, that there was a combine in farm machinery as between the manufacturers in the United States and the manufacturers in Canada. Otherwise that reduction in the tariff should have been passed on to the user of farm machinery. I doubt whether this reduction in the tariff is going to mean very much unless the government are prepared to go farther than they have done in the past.
The hon. member for Brantford City said that he was alarmed about the position of labour. I have figures here as to what labour gets out of the total price paid by the farmer for farm machinery. These figures were produced before the committee which inquired into farm machinery prices in 1935 and 1936. On an 8-foot binder which cost the farmer $281 laid down in Regina, labour received $22.62, and that, I believe, included the full cost of factory labour and office staff also.


William Ross Macdonald: It did not take in any office staff. I was on that committee.


Percy Ellis Wright: If it did not include the office staff I accept the hon. member's correction. The office staff may have been included in this other item of overhead, but it did include all the costs of factory labour. I would also point out that in the United States in 1939 farm implements were selling at approximately fifteen per cent below the Canadian price on an average, and yet United States factories were paying their labour from fifteen to twenty per cent more than was paid to labour in Canadian factories.


William Ross Macdonald: Mass production.


Percy Ellis Wright: The Canadian factories should, have been working to their full capacity or perhaps they were overbuilt. Perhaps

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their overhead was out of proportion to the trade which there was in Canada. So that I do not think the hon. member's arguments are very sound, and when he says that he is so much alarmed about labour I am inclined to believe that he is alarmed about other interests than labour.


Gordon Knapman Fraser: I hope that the hon. member does not imply that about me too, because I certainly am concerned about labour.


Percy Ellis Wright: If the cap does not fit, do not wear it.


Thomas Reid: He is pretty well alone on this side.


William Ross Macdonald: If I am right I do not mind if I am alone or not.


Percy Ellis Wright: I should like to ask the minister a question with respect to dumping duties. The tariff is being removed. Does that mean that any group of individuals or any individual in any part of Canada will be able to go to the United States and buy any type of farm implement or implement repairs and bring them into Canada absolutely free of duty of any kind? Suppose you are able to buy farm machinery or repair parts in the United States below the ordinary home consumption price in that country. Will the importer be compelled to pay a dumping duty on those goods when they enter Canada? Will they be valued for customs purposes at the ordinary price in the United States? Will dumping duties be applied?


James Lorimer Ilsley: It has been some years since I have given any consideration to the state of the law relating to dumping duties, but I think the dumping principle is still in our Customs Act. I think it is still a principle of our tariff laws that if goods are sold at less than the fair market value for home consumption in the country of origin, the dumping duty applies.


Percy Ellis Wright: If that is the case, this tariff reduction may not be of much benefit to the Canadian farmer. I know we have cooperatives operating in western Canada today whose purpose it is to go to the United States and buy machines and repair parts on the cheapest market they can find.


James Lorimer Ilsley: At a price less than the fair market value in the United States?
Mr. W'RIGHT: They may be able to make a bargain over there with certain firms to buy these repair parts at less than the fair market value as determined by the implement companies in the United States. They might be
able to make a bargain, for example, with Montgomery Ward or some other people who are not in the implement business to produce certain repair parts at considerably lower prices than are charged by the implement companies in the United States for those repairs; but if we have to pay the difference between the price which might be obtained by the cooperatives for these repairs and the price at which the implement companies consider a fair domestic price in the United States, this reduction in the tariff may not mean very much to the farmer.


James Lorimer Ilsley: Let me say a word about that. The principle in the Customs Act is that if a foreign exporter quotes to a Canadian importer goods at a price less than the fair home market price of similar goods to a purchaser in that foreign country, the dumping duty applies. That is the principle of the dumping duty; it is to prevent dumping. The hon. gentleman apparently believes that the dumping of agricultural implements should be permitted. Does he believe that the dumping of butter from New Zealand should be permitted? I should like to find out about that.


Gordon Knapman Fraser: That is a sixty-four dollar question.


Gordon Graydon: Better think it over, anyway.


Mr. GRAHAM:: I am sure this does not present an appropriate opportunity to stage a first-class or full-dress debate on the question of the tariff structure. However, in view of what has been said here to-night, like the hon. member for Portage la Prairie I feel that I should put on record one or two comments.
I could have followed the hon. member for Brantford City, where farm implements are manufactured, had he stayed with his original argument, that it was a little unfair at this time, before the government had implemented its declared policy of exploring the world to improve the trade conditions of this country by entering into reciprocal trade agreements, to single out the farm implement industry in the matter of tariff reduction; that is, until the government in its general trade policy had dealt with a great many other items. But I noticed that to-night he went much farther; and as soon as the matter of cream separators was mentioned, I observed that the hon. member for Peterborough West, where cream separators are manufactured, rose in his place and protested against that particular tariff reduction. In addition, the hon. member for Broadview gave us to-night an argument, such as has been used ever since this question was first debated, against the step which the
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government is taking. I hope the minister is not at all alarmed by the expressions of opinion on the part of these hon. members, all of whom have opposed this particular item in the budget changes. It was bound to come. As the Minister of Finance stated, as reported in Hansard, at page 4184:
However, the government desires to give concrete evidence of the direction which it is endeavouring to follow in the formulation of post-war commercial policy.
And on the same page, although not following immediately on that, he points out-
.	.	. the need for a bold initiative in the
orderly and agreed unshackling of world trade, if the ideals of economic expansion, higher incomes, full employment, adequate nutrition and the progressive abolition of poverty are to become realities.
I implore the minister never to hesitate or to weaken in the policy which he has declared to be the policy of the government in the post-war period, simply because one hon. member after another, when his particular baby is touched in this matter of unshackling trade-


Gordon Knapman Fraser: Some day you will have a baby to be touched.


Roy Theodore Graham: -thinks it is proper to rise in this chamber and protest against that particular item, which I hope is only one among a great many which will follow the same course, so that the objectives stated by the Minister of Finance may be reached, and the results of the Canada-First policy of 1930-35 will not only be undone, but the lessons we gathered as a result of that policy may be applied. In this way Canadian industry and Canadian agriculture will both prosper to a far greater degree than they can hope to do under any other policy which I have ever heard advocated in this house or outside it.


Percy Ellis Wright: I should like to answer the question the minister asked me. It was a fairly direct question. I want to point out the difference between the conditions affecting farm machinery and those affecting butter. The price of farm machinery in the United States is set by a monopoly; it is fixed by people who control the price of farm machinery and are able to set it at any level they like. On the other hand butter is sold on the world market and must conform to the world price of butter, and it has always had to do so.


James Lorimer Ilsley: That would, I should think, be all the less reason for putting any duty against New Zealand butter. But there is always a great agitation when any butter

starts to come in. I have gone through this in previous years, and I know there is. Hon. members representing farming constituencies are always extremely vocal on that point. I just want to point out that I do not think we ought to get our legislation on an occupational or a class basis. We ought to realize that a principle should be applied all along the line, and I am afraid we do not. I know perfectly well what the attitude of hon. gentlemen would be if a large quantity of New Zealand butter were coming into this country: it would be to shut it out. I do not say we should, mind you. I think we should have a little consistency in our attitude toward these things; and the distinction the hon. member has drawn is a distinction without a difference. If there is a monopoly setting prices in the United States, how is your cooperative going to get a cut-rate price? You must bear in mind that we are talking about a condition which is perfectly non-existent at the present time and will be for a good long time to come. The difficulty is to get implements from the United States; the difficulty is not that of having implements dumped on us.


Percy Ellis Wright: The cooperatives, by the way, are going into the United States and, along with the cooperatives in the United States, are buying a factory there and are going to manufacture their own implements for the cooperatives for distribution in both the United States and Canada; and if they are able to manufacture these implements at a considerably lower price than present manufacturing costs in the United States, then you propose to put on a dumping duty on them so as to bring prices up to United States prices, before they can be brought into Canada.


James Lorimer Ilsley: I do not think the dumping duty would apply in that case. I understand that if a manufacturer of these implements in the United States sells to a comparable purchaser in the United States at a price as low as the price he quotes to a purchaser in Canada, the article is not being dumped.


Percy Ellis Wright: That puts a different complexion on the whole thing, if that is the case.


Ernest Edward Perley: I think all of us are pleased at any benefit which may be derived from a change in the tariff on these items. If it results in a reduction of price to the farmer, hon. members, especially from the west, will gladly support it.
I dealt with this matter pretty carefully and, I think, clearly in speaking on the budget, and put on record figures which I obtained from the bureau of statistics and which the

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hon. member for Brantford quoted this evening. As he stated in replying to a question I asked him, fifty per cent of the farmers' purchases of farm implements to-day consists of tractors, and they are on the free list. As the hon. member for Brantford City pointed out, when you take the average duty on the balance, it is so low that its effect will be very small indeed.
What I rose to say was that, while this may be a gesture to the farmer himself, I regret that the minister has not taken into consideration another individual who has much to do with the farms of western Canada, in fact, in the last three or four years, more than anyone else; I .mean the farmer's wife. I think the minister should have considered putting on the free list a great number of items which may be classified as household equipment on the farms, such as non-electrical refrigerators, vacuum cleaners and sweepers. Stoves might have been put on the list. The farmer's wife has been contending with the old stove. If things were made a little easier for her in that respect she would be tickled to death to get a new stove, an oil stove and so on. If you want to help the farmers, automobiles also might have been considered. Generally household equipment on the farm could have been considered and could have been put on the free list. In that way the one individual in the country who neeeds to be helped would have been helped.


James Garfield Gardiner: You ought to join the Liberal party.


Ernest Edward Perley: Those things are what I think could have been taken into consideration when the gesture was made by putting agricultural implements on the free list.


James Lorimer Ilsley: I am afraid, if we had done that, my hon, friend would have said that we should have gone much farther, and many of his colleagues would have got up and said that we were turning men out of work. I think the safest policy is the policy I laid down in the budget, which is to look forward to arrangements which will have the effect of lowering world tariffs generally and promoting trade between nations. This is one step that we thought we should take for the reasons stated in the budget.


George Ernest Wood: I find myself in a somewhat peculiar position to-night, because, after all, I represent an agricultural implement manufacturing riding. The Cockshutt Plow company happens to be in the constituency I have the honour to represent.
I may say that I cannot show the same concern as my colleague has in regard to what the future may have in store for the workingmen in the city of Brantford. I have been more or less following the stock markets, not that I have very great interest in them other than to see the trend of things, and I have discovered that there has been no reduction in the price of the stock of the agricultural implement companies. In fact in Tuesday's Globe and Mail I found that there has been a considerable increase in the stock of the Cockshutt Plow company on the stock exchange, which indicates that those who wish to put the product of their efforts in the form of money into that stock do not feel the same concern as do some hon. members of the committee. Furthermore, I wish to put myself on record as one of the hon. members supporting this government who believe that the policy of freer trade in all commodities of life is one of the solutions of our problems. We all boast about the things for which we are fighting. When the Atlantic charter was drafted by the great statesmen of the allied countries one of the clauses of that charter referred to the exchange of the natural resources and the goods of one nation with another.
I may say I am somewhat shocked at the attitude of the opposition. The hon. member for Broadview got up upon a high and lofty plane and tried to take under his wing the guidance and protection of the great British empire. I am not at all concerned about the British empire. The past record of the British empire shows that they have been well able to take care of themselves. There have been many people who prophesied the downfall of the British empire; but the fact of the matter is that that' empire has been always twenty years ahead of most of the other countries of the world. They have been well able to take care of themselves; and I still have confidence that it will not be necessary, particularly for Canada, to give any great preference to the products of Great Britain to enable it to maintain its existence. However, I feel that there are other things that should be considered. Personally I believe that the workingmen and the people that I have the honour to represent in the city of Brantford will be in a much better position under this particular policy than they will be under a restricted trade policy. We have had examples of high protection many a time. You have to look at the past and the path over which we have come to decide what the future may have in store for us if we follow certain policies.
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What has been the result? I have before me the agricultural income of this country from 1926 to the present time. From 1926 to 1930 inclusive the average farm income in those five years was 8970,000.000. Then we had the blasting policy of our hon. friends across the way, who put on high tariffs and claimed that they were going to solve our problem. The result of that policy was that in the five years during which they had the privilege of administering the affairs of this country the average agricultural income dropped down to 8440,000,000, or less than one-half of what it was in the previous five years.


Mr. TUSTIN:: There was not a world
depression then.


George Ernest Wood: The hon. member says that
there was a depression when my hon. friends opposite were in power. I will answer the hon. member for Prince Edward-Lennox in this way. Canada was still in this same old world as were the rest of the countries. In 1930 Canada stood in fifth place as a world trading nation. After five years of my hon. friend's policy we receded to seventh place as a trading nation in competition with all the rest of the world. There must have been something in that policy which made it impossible for the Canadian farmer to sell the product of his labours and relieve this market of goods. There must have been something in that policy which was responsible for depressing the prices in this country when the total agricultural income was less than one-half what it was in the previous five years. Now, then, to prove it to the hon. member-


George James Tustin: There were high tariffs in
other countries which shut out our goods.


George Ernest Wood: It cannot be mere coincidence that in 1935 the total agricultural income again was 1511,000,000 for that one particular year. However, I think it. is only fair to take the average. In the period from 1935 to 1940 we had two very bad years, 1937 and 1938. In those years we had practically a famine in the three prairie provinces so far as agricultural production was concerned. But let us include those years in the five-year period. In that five-year period we had a total agricultural production of 8675,000,000. In spite of the fact we had two of the worst years in the history of *his country so far as production is concerned; yet we had an increase of fifty per cent in returns to agriculture. Furthermore, for the benefit of the hon. member for Prince Edward-Lennox, our trade in relation to other countries of the world had gone up until we were again the fifth trading nation of the

world at that particular time. At the present time we stand third Of course, part of that is due to the war, because some of the nations of the world are not in a position to compete with us. To-day Canada is filling that great place among the trading nations of the world. She is the greatest trading nation of the world for her population.
That brings me to this argument. Canada has proven in war time that her industry can compete with any other industry in any other country; and if it can be done in war time, why cannot it be done in peace time? Our productive possibilities have increased. We have three thousand more factories in Canada to-day than we had when the war broke out. Besides that, we have numerous other factories that have expanded their productive capacity. I do not see any reason why that productive capacity harnessed up cannot put Canada in a position to compete with the commerce of the world. I believe that it can be done, because if you remove those barriers- and many of those barriers militate against the manufacturer-the manufacturer will be able to participate in the benefits of a freer trade policy, and he will be able to produce cheaper.
I notice that under this particular item there are certain articles of iron and steel, rods and bars that are allowed to come in duty free. They go into the manufacture of agricultural implements. I might say that I do not take too seriously what the hon. member for Mel-fort said. He said, I think, that only 822 of labour entered into the manufacture of a binder.


Percy Ellis Wright: Those figures were given to a committee of this house by the implement companies themselves.


George Ernest Wood: I thought the hon. member said 822.


Percy Ellis Wright: Yes, S22.62; that is the factory's labour cost.


George Ernest Wood: But a great deal of the material going into a binder is already processed when it comes to the factory, and that labour must be taken into consideration. Again, the agricultural implement companies go to a great deal of expense in connection with servicing, and there are other ways in which labour enters into the final cost. I do not think the figure mentioned by the hon. member for Melfort gives the proper relationship of the cost of labour to the price of the binder. I take the view that if Canada is to prosper in future, steps must be taken to keep the cost of production as low as possible. If there is one thing that will create

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unemployment it is an increase in the cost of production, and that cost of production will be affected by the matter of wages. The best assurance labour can have as to its prosperity is a prosperous customer, and if the farmer is prosperous there is no doubt that the farm implement firms will be able to sell their products.
It has been argued that the benefit to the farmer as a result of the removal of this 7i per cent duty will be small. I have seen editorials in my local paper, as well as in the Globe and Mail, in which attempts were made to analyse the benefits that would go to the farmer, and I am shocked at their methods of arriving at a conclusion. As for my colleague the hon. member for Brantford City, while his legal ability may be great I am afraid his mathematics are bad. Let me tell the committee how I view this matter. Let us say that I purchase in the United States an agricultural implement costing $100. I have to pay $11 for United States currency, which brings the cost to $111. The duty on that implement is 7| per cent, which is figured not on $100 but on $111, which means an actual duty of $8.32. Up to the present there has been a war exchange tax of ten per cent, also assessed on the $111, which meant another $11.10. So that when you include the cost of exchange, the duty and the war exchange tax, that $100 implement will cost me $130.42, without any freight charges at all. It is true that we have no control over the $11 for exchange, but the removal of this duty will mean a benefit to the farmer of practically twenty per cent, consisting of $8.32 duty and $11.10 war exchange tax. I cannot see it in any other way. I obtained these figures from the department, and I believe this to be the correct picture. I am ready to admit that tractors have always come in free, and the only advantage we get there will be the removal of the ten per cent war exchange tax, which will be a considerable saving.


Mr. GLADSTONE:: What was the amount stated by the hon. member for Melfort as the cost of labour in connection with a binder?


George Ernest Wood: It was $22.62.


Robert William Gladstone: I suppose the average wage of a man working in a factory would not be less than $6 a day, which would mean that only three or four man-days would go into the manufacture of a binder. The idea is simply preposterous.


Percy Ellis Wright: I only gave the figures of the companies, as they were presented to a select committee of this house in 1935.


Robert William Gladstone: If that represents your reasoning in all things, it is very inaccurate.


George Ernest Wood: I thank the hon. member for Wellington South for drawing that point to the attention of the committee. Early in my remarks I endeavoured to direct attention to this rather ridiculous approach to this question.


Percy Ellis Wright: The hon. member was in the house, I believe, at the time when the committee on the cost of agricultural implements was sitting. Did he question the figures of the companies at that time? I do not know whether the hon. member for Wellington South, who has just questioned my figures, was a member of the house at that time, but if he was he should have gone into those figures when they were placed on record by the implement companies themselves.


George Ernest Wood: That is quite beside the point; I am not able to recall all the things I did ten years ago.


Robert William Gladstone: But at least you know a man could not make a binder in three or four days.


George Ernest Wood: Yes, my common sense would tell me that. As I pointed out, that argument only gives part of the picture. That is characteristic of the group to which the hon. member for Melfort belongs. They generally say just enough to get people to believe what they want them to believe, without giving all the facts and facing realities. Of course they are just running true to form again. I will admit that it is good politics, because we cannot spend all our time in denying things. Most people know their arguments are ridiculous, but I have come to the conclusion that we have trusted the public too much and have allowed them to listen to the wild doctrines and statements of hon. members in the far comer for too long without giving the correct picture, because many people are coming to believe them. We thought most of our people were too intelligent to believe some of the ridiculous things hon. gentlemen in the far corner have been saying, but unfortunately, while engaged in the war effort, the people have not time to do their thinking properly, so that hon. gentlemen are having considerable success with their phoney arguments and policies.
I was going on to say that the discussion in regard to tractors has brought out the point that these machines are not manufactured in Canada, and I am sure the public will want to know why. At one time tractors were manufactured in the city of Brantford, but their design was rather cumbersome and did not meet with the approval of the buying public. As a result the company could not remain in business. To-day 'a tractor produces far more powder than it requires for its own
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operation. The first tractors built in this country were so cumbersome that they required most of their power for their own operation, and had no reserve left. To-day tractors are so perfected that on level ground, by putting one's hand on a tractor one can push it along a level road. That is one type of progress that has been made.
I believe it was the hon. member for Broadview who drew attention to the fact that we would have to make our purchases from Great Britain and that to maintain herself she needed our business. Well, I have discovered that Great Britain drives a pretty hard bargain, when it comes to buying agricultural products. I am prepared to say that after this war is over we shall have to compete with Denmark in the British market, so far as our pork products and many other products are concerned. If we are going to compete satisfactorily, then the only answer the farmer has is that of reducing his costs of production. We cannot maintain high production costs, when those costs are far in excess of those in other countries, thereby placing the selling prices of our products beyond the reach of nations that are buying. This is all very well in war time, when there is very little competition, and when there is a ready market for everything. But some day we must face our Danish competitors on the bacon and cheese markets. The solution of our problem in Canada will be reached only by keeping down our production costs.
In the statement I made the other day in connection with sessional indemnities, I overlooked one point. May I say now that I take the view, and take it sincerely, that if Canada is to find a market for the products of her labour it will be necessary that we revise our thinking, and that we keep costs of production down so that those in other countries may be able to buy our produce.
The answer to higher wages and higher production costs will be met in unemployment; there can be no other answer. I say tliis because I feel it is important that the country should know where we stand, and where I stand particularly on this matter. The mere fact of lowering salaries or lowering wages does not necessarily mean that anyone is going to be deprived of what he needs. But if by lowering production costs we can increase the purchasing power of wages, wre at the same time are operating far more efficiently than if we have a continuous increase in prices, salaries and wages, and a resulting final increase in production costs.
To-day organized labour are demanding their rights. They have associated themselves, politically; and I warn labour definitely that 
if they continue this policy of accepting class legislation, they are heading for nothing short of disaster. Their experience will be paid for in unemployment.
There is only one way in which we can have prosperity, and that is by going abreast. If there is to be a national state, then the farmer has to have his place in the economic life of that state. He has carried the burden of other people too long, and he has now reached the point where he feels that he is entitled to some of those fine things, some of those good things in life. He feels that he has the same right to those things as the people who live in the more favoured industrial centres.
The great solution of our problems will be found in lowering production costs, so that when the farmer has to compete on the open markets of the world with the products of other countries he can compete and sell his surplus. In that way there will be a continuous market for his products. This is a long story, but I feel it my duty to state my position, and I want the people in my constituency to know where I stand on these matters.
The solution of our problems to-day rests in world trade. Canada to-day stands the greatest trading nation, according to her population of any country in the world. I believe that following a wise policy and with proper leadership along the road we have travelled in the last few years when Canada has become such a great nation, we shall maintain that position. By doing the wise thing I believe we can maintain the favourable position we enjoy to-day.


John George Diefenbaker: Is there to-day any embargo in the United States against the export of farm machinery, other than tractors?
Mr. 1LSLEY: Other than tractors?


John George Diefenbaker: Yes.


James Lorimer Ilsley: I did not know there was an embargo on the export of tractors, even.


John George Diefenbaker: Well, I say "other than tractors". I know there is no embargo upon them. So far as farm machinery is concerned, with the exception of tractors, is there any embargo?


James Lorimer Ilsley: I am not quite sure of my facts, but I think they make a limited allocation to us of what machinery they have.


John George Diefenbaker: What was the value of farm machinery, exclusive of tractors, imported into Canada between 1959 and 1913?


James Lorimer Ilsley: The hon. member is asking for a statement of imports into Canada?

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Charles Albert Henderson: While the minister is looking up that information I should like to say a word. May I express commendation of the minister upon the budget presented, and upon his policy of withdrawing the duty against agricultural implements. He has done some splendid things, but I believe this has been his most Liberal act, and certainly it has been the most Liberal since I have served my constituency as a member.
I came to this country thirty-six years ago, and I can well remember Sir Wilfrid Laurier sending his Minister of Finance, the Right Hon. Mr. Fielding, to the United States to negotiate a reciprocal agreement. I remember reading history to the effect that that was not the only budget of its kind Mr. Fielding had brought down. He had given Great Britain a preference before that time, a procedure which I approve. I remember that the agreement with the United States was put on the statute books of that country, and became an election issue in Canada, defeating the government. In my -opinion, as a man operating a farm in western Canada, that policy was fair not only for western Canada but for the whole of it.
As a result of a policy which was followed, lands and factories depreciated in value to a considerable extent. We have now reached the point where we are able to get back on our feet again, and to enjoy some real Liberalism. Since we have reached this point, may I express my commendation and my appreciation to the minister.
The hon. member for Qu'Appelle referred to the elimination of duty on farm machinery as a gesture to farmers. I say to him it is more than a gesture; it is something real for the farmers of Canada. Not only that, but it renders a service to all Canada. I would rather put it as the minister has put it, namely, that it is a gesture to the rest of the world. If after the war we do not have something like an Atlantic charter, to provide an equitable exchange of commodities the world over, then we have not yet won the war.


James Lorimer Ilsley: I am not sure I have all the information the hon. member for Lake Centre wanted, but I have a statement of Canada's imports of agricultural implements and machinery during 1942 and 1943. The total imports in 1942 were $23,696,661. This included traction engines, gasoline, $9,041,960, and parts of gasoline tractors, $7,563,214. The remainder of the item making up the total of $23,696,661 consisted of a large number of implements and parts. It would take some time to read the whole list. In 1943 the total
value of imports was S20.424.286, which included traction engines, gasoline,, $7,271,678, and parts of gasoline tractors, $8,041,974. These figures show that by far the larger part of imports were tractors and parts. The principal remaining item is harvester combines and parts. The value of the imports in 1942 was $2,460,700, and in 1943, $1,737,110. That was by far the largest item, but there were other items such as cultivators, the import value in 1942 being $241,631, and in 1943, $145,026,
The situation is that we are getting some agricultural implements and parts from the United States, such as we can arrange for by allocation. The amount available is limited. The situation that prevailed in 1943 is substantially the same as has prevailed in 1944, although the allocations may be a bit higher.


John George Diefenbaker: What was the total amount of customs duties collected on farm machinery in each of those years?


James Lorimer Ilsley: The amount of the customs duties and the war exchange tax for the present year if unremoved would amount to $2,350,000 on the imports. That could be divided roughly into proportions of fifteen to twenty. That is to say, the duty is 7M>
per cent on nearly all of these items, if not on all, and the war exchange tax is ten per cent. A rough way of finding out would be to take 15/35ths of the amount.


John George Diefenbaker: Would the importations in 1942 and 1943 approximately equal the export quotas fixed by the United States? What representations, if any, have been made by the government of Canada to the United States government to increase these quotas?


James Lorimer Ilsley: I have not that complete information. We have an efficient organization in Washington which is in contact continuously with the combined boards and United States government agencies that have to do with the fixing of these quotas. We try to get as much as we can.


John George Diefenbaker: That still does not answer the question I asked. Did the exports by the United States to Canada approximately equal the quotas fixed by the United States government or by the joint production board?


James Lorimer Ilsley: They were short of the
quotas on some items, but they are making them up this year.


Mr. TUCKER:: I understand that an order was passed by the wartime prices and trade board to the effect that ceiling prices on farm implements and repair parts would be reduced by the amount by which costs would be
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affected by the removal of the tariff and1 the war exchange tax. This was to come into effect on June 26, but later there was another provision that it would not come into effect until later on because of inventories on hand. Can the minister say whether that is true, and), if so, what check is made to see that the implement companies do not charge the amount of the tax even though they imported subsequently to the removal? Also, if it does not come into effect at once, will companies which collect the tariff and the war exchange tax on machinery which they imported before the tax was put on be asked to refund that? In other words, if 'they are to be permitted not to lose the tax on inventories on hand, they should be required to refund the tax which they have collected on inventories which ;hey had1 on hand before the tax was put on. I just wondered what the situation is in that regard and what is to be done about it.


James Lorimer Ilsley: The hon. member for Humboldt (Mr. Burton) asked a question yesterday which I promised to answer to-morrow. I have the information and I will answer the question now. In regard to complete equipment imported after June 26 of this year the lawful price must be reduced to the full extent of the exchange tax and/or duties removed by the budget. This means that prices of floor stocks of complete equipment are not reduced by law, although undoubtedly the ordinary process of competition will have an influence. Arrangements have been made to tag specially every piece of complete equipment imported prior to June 26. Inventory of complete equipment is not in any event very large since these machines have been on a hand-to-mouth basis for some considerable time after the wartime prices and trade board's rationing procedure.
That is the situation with regard to complete equipment imported after June 26. To summarize, it wTould appear to me that the situation is that on what they had already imported before June 26 they may include the war exchange tax and duty and charge that in their price, but on what they import after June 26 they cannot. There is to be a separation of the goods.
The hon. gentleman said that at the time the war exchange tax went on, the amount was added to the price of the goods that had already been imported. Is that correct?


Walter Adam Tucker: Yes. I know of a case
where the article, a tractor, was imported before the war exchange tax went on, and when they sold the tractor they added the war exchange tax to the selling price. Complaint was made about it, and they showed 
it exactly as the war exchange tax, although they had never paid the tax to the government. The officials of the national revenue department said that they could sell the tractor at any price they wanted at that time. Therefore it would appear that at that time they were able to add the tax to the price of the article. Now, when their inventories are even lower, they are protected against the tax being taken off the price. I suggest that the rule be made to apply both ways, and that where it can be shown that any company charged the tax when it did not actually pay it, the revenue officials of the government should see to it that the tax is refunded to the people who actually paid it.


James Lorimer Ilsley: That sounds very fair to
me and I made inquiries 'to-day to find out if that had been the case. Apparently it was not generally the case when the war exchange tax was imposed in 1940. It may have been done in some individual instances. I do not know whether it would be possible to isolate those instances. It was forbidden by the law. If the hon. gentleman will look at the Special War Revenue Act, chapter 41 of the statutes of 1939, which became the law on August 7, 1940, he will find this provision:
No person shall take advantage of the tax imposed by this section to increase the price of goods by an amount greater than is justified by any increase in cost properly arising from such tax or to maintain prices at levels higher than are so justified and, where the wartime prices and trade board reports to the governor in council that, in its opinion, any person has so taken advantage, the governor in council may, upon the recommendation of the said board, for such period of time as he may determine, impose upon all or any of the goods produced, sold or dealt in by such person an excise tax at a rate not to exceed ten per cent of the selling price of such goods, remove or reduce customs duties applicable thereto, fix the prices thereof and take or authorize the said board to take such other measures under the wartime prices and trade board regulations as the said board may recommend.
As I read that, there may be two inter-[DOT]pretations. I have not given much thought to the interpretation, but as I read it an importer who had on hand goods on August 7, 1940, and who added to the prices of the stock that he had on hand the amount of the war exchange tax as a part of the price which he had not paid, would be taking advantage of the tax to increase the price of the goods by an amount greater than justified by any increase in price properly arising from such tax. But it is susceptible of another interpretation. It might apply to persons who paid only ten per cent duty and tried to raise the price by fifteen per cent. That may be the meaning, but whatever its meaning

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I am informed by the former chairman of the wartime prices and trade board that he can remember no complaints to him about it, and certainly there was no recommendation by the prices board to the governor in council to exercise the punitive powers authorized by the section. I am still talking about complete equipment, complete tractors, for example.
Here is a memorandum I have from the wartime prices and trade board:
We are informed that there was a wide variation in what was done by the industry. Furthermore, the percentage added varied as between individual parts, with the result that the additions made were larger in some eases than in others, but on the whole the overall addition was somewhat lower than was justified. It should be particularly noted that there was a time lag of about two months before the industry adjusted any prices.
I gather that that refers to goods imported on which the war exchange tax was paid. I now come to the treatment of parts. The memorandum says:
That in regard to "parts" brought in either before or after June 26-the lawful price must be reduced after September 30. It will be noted that this provision includes floor stocks so that on October 1 the lawful maximum price of all parts must be reduced.
The reasons for this procedure are as follows:
This is the first time that following a removal of taxes or duties the government has required a reduction in established prices. Heretofore the reduction took place under force of competition. Under the board order it should be noted that we are dealing with legal maximum prices. There is nothing to prevent the operation of the ordinary forces of competition.
I should say at this stage that perhaps the ordinary forces of competition are not working now. If we rely on government action only, we must take action that is practicable.
The next reason is as follows:
It seemed manifestly unfair to force importers and dealers to take a loss on taxes and duties already paid. True, in pre-price ceiling days they might have had the risk of loss, but that is quite different to compelling the loss. When war exchange tax went on in 1940, importers and dealers were not prevented from increasing prices, but section 6 of the War Exchange Conservation Act provided for a penalty tax if undue advantage were taken.
I might interject that I think they were prevented from increasing prices on what they had already imported. The memorandum goes on:
So far as we know, this tax was never imposed so that we must assume that no undue advantage was taken.
The hon. gentleman says that in individual cases undue advantage was taken. It goes on:
In fact, we are informed that there was a wide variation in what was done by the industry. Furthermore, the percentage added varied as between individual parts, with the result
that the additions made were larger in some cases than in others, but on the whole the overall addition was somewhat lower than was justified. It should be particularly noted that there was a time lag of 'about two months before the industry adjusted any prices.
I read that passage before. The memorandum goes on:
There are at least 75,000 to 80,000 parts involved on which new prices have to be worked out. It is a physical impossibility to revise the various price lists in less than the time allowed. It would have been impossible to segregate the parts received after June 26 or to tag all the items so that a two-price system could be established to differentiate those in inventory before and after that date. Moreover, such a two-price system was considered highly inadequate in any event and the decision to reduce the price of all parts on a specific date not only gives the hoard some chance to police its regulations hut also eliminates confusion for the consumer. Under any two-price system enforcement seemed impossible and unscrupulous dealers would take advantage of the situation. As part of the arrangement the industry agrees to absorb any loss on all floor stocks after the specific date.
If in fact we had attempted to compel the industry to reduce prices they could quite properly have asked us to name the specific reduction on each item which would have required an examination of each of the 80,000 items for each company to establish what actual additions took place for the exchange tax in 1940 and duties in earlier years. Any effort to meet the situation by a general order as we attempted to in order No. 419, later cancelled, left us with such a lack of definiteness that enforcement seemed impossible. Moreover, we could scarcely have refused to entertain requests for the payment of subsidies in accordance with general policy.
The stock of parts on hand at June 26 was considered to be much heavier than the quantities which can be imported before September 30 in view of quota allocations. Therefore, it seemed to the benefit of the farmers to get all stocks of parts reduced by September 30 than to continue with the higher price during the entire liquidation period-perhaps years-of the pre-June 26 inventory.
The September 30 date should give small dealers a reasonable opportunity to dispose of inventory. There are over ten thousand of such dealers most of whom simply could not absorb 'the reduction and subsidies would have had to be paid.
Obviously any farmer is put in the position by our order that by simply withholding his purchases of parts until October 1, he can ensure lower prices.
That is, if he can do so. And the information I have is that most repair work takes place after harvest.
Those are the reasons given for the action taken. The board was confronted with quite a problem with regard to these parts. The old rule about putting on duties and taking off duties was that when you put on duties the person in this country who was stocked up with the article on which the duties were
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increased got the benefit, and when the duties were taken off the person who was stocked up suffered a loss. Competition made him suffer a loss. Well now, the forces of competition are free to work here, if they will work, and if they have to be supplemented by government order, which we are doing, the government order apparently cannot take effect at once because there is this huge number of items, 80,000 items, the price of every one of which has to be examined and an order made in respect of it. I do not know whether the situation is very satisfactory; it seems to have been the best the board could do with it.


Walter Adam Tucker: I wish to say in that regard that I have received a very bitter complaint about the wartime prices and trade board putting out order No. 419, which some implement agencies communicated to their customers and then heard over the radio of its cancellation, leaving them so that they do not know where they are at. The representations I have had complain that the wartime prices and trade board should have realized what they apparently found out later and not have put out an order they could not enforce, thereby causing a lot of loss and confusion. I really think they should have taken more care in this matter than they actually did, and so have avoided this confusion.


Joseph William Burton: In view of the fact that the minister has answered this evening the question I asked this morning, I wish to give him an explanation of the reason why I asked him. I noticed in the press yesterday that September 30 has been set as the date for new prices on repair parts. I wanted to be sure of that before I registered any complaint. Now that we have the assurance from the minister that that is the date which has been set, I wish to make this complaint in the most emphatic way possible. The minister says that the farmer can withhold his purchasing until after September 30, but I tell him and any other hon. members who may be inclined to think that way that it is absolutely impossible for the farmer to wait to buy his repair parts, now that he is getting ready to take off his harvest.


James Lorimer Ilsley: I said, if he could.
'Mr. BURTON: Well, that is the position. We have been getting along with our old implements, such as they are, and year after year we have been forced to put more and

more repairs on our machinery to be able to carry on. This year,, with the harvest which is in sight in most parts of western Canada, it is going to take all we can put into our machinery to hold it together to take off the crop, and the fact that September 30 is set as the date when the reduction of prices takes effect means that farmers will not benefit from it in any way, because practically all our repairs will have been taken care of by that time. The quantity of repair parts purchased after September 30 will be very small compared with the amount which will be purchased from now up to that time. As the hon. member for Rosthern remarked, one can see that when this war exchange tax went on there was a certain amount of confusion among dealers. They did not know whether they should or should not take it, and I can quite realize that there were some who took it in good faith at the time. They were more or less left up in the air, and it has been difficult for them to carry on their business. It is not the average implement dealer out in the country from whom the farmers are getting a raw deal. These men are trying to do the best they can for the farmers in supplying machinery and repairs and trying to service the machines they sell to them; and they are constantly in hot water, especially in these times, because the restrictions and the impossibility, in many instances, of getting the repairs as they are needed. The farmer is now placed in a position where he has to wait until another year goes by before he can benefit by the so-called concession. In that connection-
Mr. -ILSLEY: May I just interrupt?


Joseph William Burton: Yes.


James Lorimer Ilsley: If the importer wishes to pass on this benefit upon anything he imports now, there is nothing to stop him. Ordinarily we would not have any wartime prices and trade board. When we took a duty or a tax off that is all we did, and the price would come right down. If it works that way this year, well and good. We are not saying that they cannot reduce the price before September 30; we are only saying that we cannot get around to examining and administering this whole thing; it is so complicated, that when we exercise compulsion, the compulsion sets in on September 30. If these fellows who, the hon. gentleman, says are such good fellows, wish to pass this on to the farmer we are not stopping them.

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Joseph William Burton: No. but I wish to inform
the minister that, as I said before, it is not the dealer from whom we are getting the raw deals.


James Lorimer Ilsley: Who is it?


Joseph William Burton: In most instances these
men are being rooked just as much as the farmers by those who set the price on farm machinery in this country.


James Lorimer Ilsley: Who?


Joseph William Burton: That is where the difficulty lies. The committee and the minister should remember that it is not the dealer who sets the price on the implements to the customer.


James Lorimer Ilsley: In the case of these imported parts, who is it? I am taking it that the hon. gentleman is talking about imported equipment and parts Who is it that is rooking the farmer? He has used that expression.


Joseph William Burton: The machinery combine
is the one that is rooking the farmer and also rooking the implement dealer.


James Lorimer Ilsley: Let us follow that down.
The hon. member says that it is the machinery combine. This relates to equipment and parts imported from the United States. Does the hon. gentleman mean that the seller in the United States is rooking the Canadian farmer? Is that what he means? If he does not mean that he must mean the importer or the dealer. Does he mean the importer? Is there competition between importers? Is there such a thing now? If there is the price will come, down immediately; if there is not we have to get it down by force as fast as we can.


Mr. HATFIELD:: The price is set to the dealer by the machinery companies.


James Lorimer Ilsley: We are talking about
imported machinery.


Heber Harold Hatfield: Imported machinery.


Joseph William Burton: The minister must surely realize that the importers in this case are the machine companies themselves. They are the ones that set the price to their agents at which they have to sell these machines. The machine companies themselves are the importers and they set the price on these machines. They set the price on the repair parts, and the agent has to watch his step very carefully if he is to get a fair existence out of the commission that he is allowed in many
cases. There is where the trouble lies. The local agents by no means whatever set the price on the implements that the farmer buys. If there is any deviation from the price that the local agent charges it has to come out of the little commission that he receives for selling the machine.
I had not intended to take part in a debate on this item, but at the same time apparently this item is the one on which we have been having a general discussion on the reduction in duty on farm machinery. I was surprised that the hon. member who started this discussion took the stand he did on this particular item. As has been mentioned before, this particular item with which we are dealing is giving the benefit of a tariff reduction to the manufacturers of farm machinery in this country. Therefore it is not what might be called a hand-out to the farmer. It is going right back to the manufacturing concerns that he is concerned about, and to the people who are working in those factories.
I had thought that if I were going to say anything on this item the proper thing for me to do at this time would be to make use of the opportunity to express my appreciation to the minister and to the government for the reductions they have made on customs duty on farm machinery. I think they should be assured that we appreciate the action they have taken in that regard; but the one thing that we are concerned about is this. Some of us who were too young to vote at the time well remember the reciprocity campaign of 1911. I was too young to vote at that time, but I took an active interest in the campaign. We thought the world .was going to tumble down on our heads when we did not get reciprocity. We still remember what took place in other parts of Canada at the time which prevented us from getting reciprocity. AVe also remember that later on, in 1919, a low tariff policy was written into the platform of the Liberal party, and that we had to wait all these twenty-five years to get it. Even though we did have to wait twenty-five years; even though our hairs are grey; even though our whiskers are also slightly of the same colour after waiting all these years, we still appreciate the little hand-out we are getting at the present time. When I say "hand-out" I say it advisedly, because while I appreciate and I am certain that the farmers appreciate that it finally has
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been done, yet at the same time it seems strange to us that we had to wait until the time when the flow of farm machinery was at its lowest ebb. A very small sum is concerned. When the minister read the figures of the amount of importations of farm machinery to-night in answer to the question asked by the hon. member for Lake Centre, I was surprised that the figures were so low. They are so low that they do not cut much ice one way or the other. The sale of farm machinery in our own country has been low because it has been practically impossible for us to get machines during these years; nevertheless I repeat we are pleased that it has come. What we are concerned about is the fact that although it has come, we farmers have to wait a whole year before we can actually get the benefit of it.
Before taking my seat I should like to say this. When the minister was discussing this matter the hon. member for Melfort asked him a question. The minister made some reference to the dumping duty on butter and compared it with the dumping duty on machinery. I wish to tell him that I am prepared to have our butter placed on the same basis as machinery if the government is prepared to put manufacturers of machinery and importers of machinery on the same basis as producers of butter have been in years gone by. In that time we had to take whatever we could get. We did not have a combine price or an agreed upon price. I am not referring to the present time when a price has been set on butter. I am talking about ordinary times when supply and demand function, when we farmers were not given the opportunity to say what was a fair price for butter in this country. At that time you could not by any stretch of the imagination say that it would be fair to allow butter to be dumped into this country from any other country away below the cost of production. On the other hand there is a combine in the implement industry. They set the price not only in Canada but in the United States. At the time that they are setting the price for their machinery is it right and proper to allow them to use our butter, as one might say, to grease it up a little bit? I think it is a very unfair comparison.
Let us have a voice in the setting of a fair price on the products that we produce on the farms, and then we shall be prepared to talk on equal terms with the others. But when

others are aliowed to set their prices and then we have to take what is handed to us, it is very unfair. If you say to the manufacturers and importers of farm machinery and other equipment that we need that you have to take the helter-skelter price which i3 offered for your machinery from time to time, then I say that we shall also be prepared to do the same with butter. When that time comes you can bring it in from any country. But if they are to be allowed to set their price and constantly work it up, then I say that we also must have protection for our butter and other things that we produce. A short time ago I think the minister acknowledged that at the present time this competition does not work, and I agree.


James Lorimer Ilsley: I said I did not know; I thought perhaps that was the case.


Joseph William Burton: I took it that the minister acknowledged the possibility that the competition might not work.


James Lorimer Ilsley: Simply owing to the fact that during this time the demand is so much greater than the supply; that is all.


Joseph William Burton: That is what I mean, that under these abnormal conditions competition does not work. But what happened only a few years ago when there was a reduction in duties on farm machinery? We did not have these abnormal conditions then, but instead of competition working to bring down prices, they went up. So that again I say that this combine in the farm machinery industry has both the implement dealers and the farmers by the throat.


Walter Adam Tucker: I would ask the minister to give further consideration to the representation he received from the wartime prices and trade board by way of justification for setting September 30 as the date when this change will go into effect. Since the minister read that explanation I have been thinking about the matter, and I suggest that he give careful personal consideration to that point, because it seems to me that three months is more than should be required to bring this change into operation. It is simply giving the implement companies more consideration than I believe they require to comply with the law. It means that for three months they can import and sell these repair parts and make as an additional profit the difference between ' the ceiling price and the cost less the war

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exchange tax. They will make that extra profit on all these goods they import during the next three months. It stands to reason there will be heavy importations during that period, and this means that we shall permit these machinery companies to evade the price ceiling law for that period of time. I submit that they should be brought under that law at the most within one month after this change comes into effect. Apparently the wartime prices and trade board originally considered that they could be brought under the law at once, because the order provided that it should come into force on June 26, 1944. I take it that representations have been made by the machinery companies requesting this additional period of three months, and I expect that the wartime prices and trade board has listened to those representations. However, I submit that this is a matter of high policy and that the government should not let the wartime prices and trade board decide such an important matter, which for a whole year will deprive the farmers of the benefits resulting from the removal of this war exchange tax. I urge the minister to give his personal attention to this matter, so that the farmers may have the benefit of this change during the present harvesting season.


James Lorimer Ilsley: I will certainly do that. I do not know what it will be possible to do; I got together such information as I could about this situation to-day. Certainly I will bring the hon. gentleman's submission to the attention of the wartime prices and trade board and urge that they go into the matter again. I do not want a position to develop under which importers of machinery will be able to bring it in without paying the war exchange tax and then turn around and add that tax to the price at which they sell it to the farmer. At least if they do that I want it to balance; I do not want them to make money on that transaction. The whole purpose was that this reduction should be passed on, and I so announced in the budget speech. The wartime prices and trade board were directed to work out the matter, and they went at it and tried to work it out by order No. 419. For some reason or another they found that order to be impracticable, as they say, and it was repealed. What I said during the budget speech, at page 4184 of Hansard, was as follows:
The wartime prices and trade board will however amend its order setting ceiling prices on imported farm implements and repair parts
in such a way as to give effect to any decreases in the laid-down cost to importers which will result from the action taken.
That was the undertaking.


Heber Harold Hatfield: They have done just the opposite.


James Lorimer Ilsley: I do not know that they have. At any rate they contend that they have not.


Heber Harold Hatfield: For the information of
the minister I may say that repairs imported last week free of duty had the amount of duty added to them when they were purchased by the farmer.


Alfred Henry Bence: If I understand the situation correctly, the duty is to be removed now; yet as far as the ceiling price is concerned it is not to be reduced until September 30. Surely a substantial amount of repair parts could be brought in during the interval. If that is the fact, who will get the benefit of the reduction? Certainly the farmer will not get it, because the implement companies, like other companies in this countiy, are trying to boost their ceiling prices now. They are not going to take this dispensation that has been given them by the administration and pass it on to the farmers; they will keep it themselves.


James Lorimer Ilsley: The contention is that after September 30 in the normal course of events they will have a large stock still on hand which they will have to sell without the war exchange tax being added, although the war exchange tax was paid on the parts imported prior to June 26. I should like to check on that.


Heber Harold Hatfield: I do not think that is the case. These United States companies have branches in Canada, and Massey-Harris has branches in both Canada and the United States. A farmer told me that he had his dealer go across the border only last week and bring him back some repair parts. His dealer took up the matter with the head office in Toronto, and was told that he would have to add the duty. This local dealer brought them across the border from Houlton, Maine, to Woodstock, New Brunswick, free of duty, but his head office told him that he would have to add the duty the same as before, so that the price to the farmer included the amount of the duty which had not been paid.

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Percy Ellis Wright: I would suggest that the minister give serious consideration to the representations which have been made in this connection. I know that in 1940, when the war exchange tax was imposed upon all goods coming into Canada, there was a fairly heavy inventory of farm repair parts both at the head offices of the companies and on the shelves of the dealers throughout the country, and these inventories have been greatly reduced since that time. If you order any repairs for farm machinery to-day, almost invariably they have to come from the head office; you are unable to get them from your local dealer. So that I believe the minister should check the inventories of 1940 and compare them with the inventories of to-day before accepting the representations made by the machinery companies. I am quite sure that the competition of which he speaks, which under ordinary circumstances might bring down the price, will not operate to-day when there is plenty of money in the country and the implement companies can get the additional ten per cent for repair parts which are badly needed. Repair parts are so scarce that people are prepared to pay almost anything in order to get them. They will pay that extra ten per cent without question if they have to, but I do not see why they should have to. I think the minister is quite right in saying that the benefit which will accrue from the ten per cent reduction should be passed on to the farmers immediately.


James Lorimer Ilsley: I do not believe we can check the 1940 inventories; I am afraid that is physically impossible. The statement I want to check is this:
Therefore it seemed to the benefit of the farmer to get all stocks of parts reduced on September 30, than to continue with the higher price during the entire liquidation period- iperhaps years-of the pre-June 26 inventory.
That is the reason given for justifying the action taken. That is the statement I wish to check.


Mr. FAIR:: Is it possible to set that date ahead thirty days, and make it August 30, instead of September 30?


James Lorimer Ilsley: It might be; I shall look
into the matter.


Robert Fair: If it could be put ahead to
July, it would be so much the better. If it is possible to make it July 30 instead of September 30 it would be a great help to the farmers.


Mr. WARD:: The hon. member for Rosthem did a much better job of presenting the ease in connection with farm implement parts than I could do. I believe he did impress the minister. It is at least anomalous if the wartime prices and trade board can defeat the will of parliament.


James Lorimer Ilsley: The hon. member has no
reason at all for making that statement. The normal thing is not to have any order at all, when an import duty is taken off. There was no wartime prices and trade board before the war. That board is trying to come in to reinforce what would take place naturally and normally. The point that has been raised is that they have not done it effectively enough. But that is not thwarting the will of parliament.


William John Ward: The Minister has eloquently endorsed what I was about to say, that parliament has placed in the budget and passed a schedule which provides us with free agricultural implements from outside our boundaries, but that apparently the regulations are not very effective so far as parts are concerned. That is perhaps a condition because of ceiling prices. I would hope that that could be remedied. In my view the suggestion offered by the hon. member for Battle River is a reasonable one, to set the date of coming into effect 30 or 60 days ahead. The government should go into the matter immediately. I think the minister will do the best he can to see that it is made effective at a much earlier date. '
I am, Mr. Speaker, going to deal briefly with only one or two matters. I could not help taking note of what the hon. member for Melfort had to say in regard to labour costs on a binder, as disclosed by the special committee which sat in 1936 and 1937. If he will examine the overall figures produced by 'the auditor he will find that the labour cost of producing a binder in 1937 was eighty-three per cent of the overall cost of the binder. I had that figure corroborated only a few days ago, when I happened to, travel from Winnipeg to Ottawa with the auditor who did the work for the committee at that time. He corroborated the figure of eighty-three per cent. I know the figures the hon. member for Melfort will quote, because I have them. My brief on this matter is upstairs, but if the hon. member will analyse the entire overall figures given he will find that it was eighty-three per cent. I would

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suggest that before my hon. friend goes any farther he might check more closely. If he does so, he will find that my figure is correct.
In order that we may soften the fears of the hon. member for Brantford City that the implement manufacturers in his constituency may be put out of business, I should like to tell a story. This is a true story, one which happened in Toronto within the last six months. A manufacturer in that city who along with his regular business has a contract with the wartime prices and trade board was visited by one of the engineers. Apparently this manufacturer sold his goods within a certain freight zone, one which extended, I be^ lieve, about 350 or 400 miles. He said to the engineer, "Do you think I can sell my goods in the city of Quebec?" The engineer said, "Why do you wish to go as far as Quebec?" The engineer had1 in his pocket a set of callipers, placing one point on Toronto, where it appeared on the map, and drew a circle with a radius of 350 miles around that city. That circle took in about 35,000,000 people in the United States. The engineer said, "Did it ever occur to you that you might explore the possibilities of that market over there?" The manufacturer replied with the question, "Do you think I could sell my goods in the United States.?" "Well," said the engineer, "I would try." "What would you advise me to do," said the manufacturer. "I would advise you to get your No. 1 salesman to go along with you, and go prepared to stay for two or three months and see what happens." That engineer was back in Toronto three months later, when the manufacturer, upon meeting him, said, "Well, I did what you told me. I made my trip to the United States, and I have returned. I could have sold more goods in six weeks over there than I sold in Canada in the past three years."
Does that sound much like the suggestion that Canadian manufacturers would be put out of business by tariff reductions? I do not think so. I do not think the hon. member for Brantford City is fair with his manufacturing friends in Brantford. There never was one vestige of evidence given in this house, during the twenty years I have been here, to prove that Canadian manufacturers could not always and at all times and in every respect compete with the United States. I think we can do a better job, because I think our Canadian people are more ingenious and
100-325i
we have better and cheaper power in Canada and a greater store of natural resources, and of those things required to produce manufactured goods.
My suggestion to the government would be that in the very near future it should move to destroy all trade restrictions between this country and the United States, or any other part of the world. If we hope to give full employment after the war, the only basis upon which we can proceed is that of complete free trade throughout the world. As there has been in connection with the distribution of munitions of war, there must continue to be an exchange between one country and another, without tariff restriction. That is the thing that will put our people to work. I hope the time is not far distant when we may see that happy day in Canada.
I have only one more word, and that is in reference to the effect this tariff reduction will have upon the Canadian agricultural economy. In 1937 I made an extensive trip into the United States, covering many thousands of miles, and I did so for the purpose of drawing a comparison between costs in the United States and Canada of machinery used by farmers. What did I find? I travelled as far as Missouri, passing through seven or eight states, and talking with farmers all along the way. I discussed implement prices not only with farmers but with small dealers in the villages and towns, as I drove along. At that time I found that there was an average difference of about eighteen per cent between the cost of machines in Canada and in the United States. It will be recalled that at that time there was a fifteen per cent duty on farm machinery. There was almost an exact parallel in price levels between Canada and the United States when the 15 per cent duty andi excise was added.
What does this mean? It proves beyond doubt that there is an international combine; there can be no doubt about that. I do not think anybody would argue that there is not to-day a water-tight international eom-bine in respect of implement manufacturing. It is all-embracing. It embraces the whole continent, and we must get that point clear. I believe, however, that with this tariff reduction we now have we dhall enjoy the whole benefit of the reduction, because I found in the United States that the price of farm machinery there, was, as I say, eighteen per cent below
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the price in Canada, which would just take care of the fifteeen per cent duty at that time, and a few incidental costs such as freight. I am surprised at the attempt by some members of the opposition to belittle the possibilities in this reduction. I think it holds great possibilities for us, even though there is an international combine. It may materially affect the growth of our cooperatives because I believe this reduction will prove of great value to them. A factory has recently been purchased by the cooperative societies of the United States in which the Canadian wholesale implement cooperative people are interested. If we as farmers can show that we know how to help ourselves we shall be able to prove to what extent this international combine is bleeding the farmers on the north American continent. The United States farmer is being bled along with the Canadian farmer. The United States farmer is suffering with us, in fact I am not so sure that he is not suffering more because his wage costs are higher, his taxes are higher, and many of the things he has to buy are higher. I feel that our Canadian manufacturers will still be able to manufacture in free competition with the United States.


Percy Ellis Wright: There has been considerable argument in connection with certain figures which I quoted, and in fairness to myself I am going to ask permission to place on Hansard the figures that were presented to the select committee of the house by the implement dealers. It is not a long list, but I think in fairness it should be placed on the record.


The ACTING CHAIRMAN (Mr. Golding):: It can be done only with the unanimous consent of the committee.


William John Ward: What is the statement?


Percy Ellis Wright: It is a statement of costs, as presented to the select committee which dealt with prices of agricultural implements. It shows the cost of an 8-foot binder from 1913 down to 1936.


William John Ward: I object to these figures being placed on Hansard. If any are to be placed
on, they should all be placed on and they are quite bulky. This is just one sheet selected from the over-all costs which I pointed out were eighty-three per cent. This was borne out by the auditor himself. If you are going to put on just one sheet selected from the pile*, you will have to put them all on.


William Henry Golding: The hon. member has not unanimous consent.


Percy Ellis Wright: It means that I shall have to read these figures, and1 it will take a considerable time to do so. The hon. member for Dauphin will have to bear the opprobrium with respect to this matter.


Ernest Edward Perley: The hon. member was a member of the committee when it was presented.


Percy Ellis Wright: This is a schedule of manufacturing costs of an 8-foot binder from 1&13 down to 1936. In 1913 the materials cost $45.56; labour, $11.97; overhead, $17.96; experimental work, 34 cents.


William Henry Golding: I wonder if the hon. member will not grant unanimous consent to having this placed on the record?


William John Ward: The point is that this is only a small part of the actual labour cost of producing a binder. I recall the particular sheet from which the hon. member for Melfort is reading. It covers only the bare cost, it does not include the cost of producing the iron in the rolling mills, producing the timber and all the items that go into a binder.


Percy Ellis Wright: Yes, it does.
Mr, WARD: That is merely the assembly cost of a binder, and that was made quite clear by the hon. member for Swift Current.


William Henry Golding: The situation is that the hon. member is going to read the figures, and I should be glad if the committee would agree to let him put them on Hansard.


Some hon. MEMBERS:: Agreed.


Percy Ellis Wright: The statement is as
follows:


SCHEDULE OF MANUFACTURING COSTS OF AN 8-FT. BINDER AS COMPARED WITH GRAIN PRICES
[Stage Direction]
Factory costs data	Sales realization	Grain	prices	Year	Material	Labour	Over- head	Exp. work	Total cost	Cash at Regina	Sales com.	Fr.	Net to Co.	Profit	Cash at Winnipeg	High	Mo.	Low	Mo.$ cts.	S cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	1913	45.56	11.97	17.96	0.34	75.83	167.02	30.45	17.80	118.77	42.94	0.99*	June	0.82f	Oct.1920	92.74	31.78	47.67	1.31	173.50	269.00	33.00	19.17	216.83	43.33	2.85|	Sept.	2.31	Dec.1921	112.12	31.65	47.47	1.29	192.53	326.00	44.00	26.00	256.00	63.47	2.04|	Jan.	1.18|	Nov.1922	80.51	22.56	33.84	1.98	138.89	266.00	41.00	25.02	199.98	61.09	1.50*	April	0.96	Oct.1923	80.54	21.85	32.77	1.15	136.31	274.00	47.00	25.02	201.98	65.67	1.23*	April	0.91*	Dec.1924	83.62	22.20	33.30	1.15	140.27	308.00	41.00	26.13	240.87	100.60	1.86|	Dec.	0.93!	Jan.1925	80.47	22.57	33.85	1.73	138.62	283.00	40.50	25.02	217.48	78.86	2.17*	Jan.	1.18*	Oct.1926	77.50	28.85	43.27	0.79	150.41	283.00	40.50	24.70	217.80	47.39	1.63*	April	1.29*	Dec.1927	75.42	26.22	39.33	0.63	141.60	283.00	40.50	24.70	217.80	76.20	1.69*	May	1.32*	Jan.1928	76.48	23.03	34.55	0.76	134.82	283.09	44.50	24.98	213.52	78.70	1.65|	April	1.13!	Sept.1929	75.60	24.81	37.22	0.91	138.54	283.00	44.50	25.42	213.08	74.54	1.78!	July	1.04*	May1930	76.35	24.39	36.44	1.31	138.39	278.00	46.50	25.42	206.08	67.69	1.39*	Jan.	0.50!	Dec.1931	81.50	27.09	40.64	3.88	153.11	278.00	46.50	25.42	206.08	52.97	0.73*	Nov.	0.51*	Aug.1932	87.01	27.16	40.74	9.64	164.55	273.00	46.50	25.12	201.38	46.83	0.67*	Feb.	0.39!	Dec.1933	79.35	20.65	30.98	2.50	133.48	263.00	44.50	25.12	193.38	59.90	0.94	July	0.42	Jan.1934	75.11	21.51	32.26	2.71	131.59	263.00	44.50	25.12	193.38	61.79	0.94	Aug.	0.61*	Jan.1935	70.56	20.48	30.72	1.56	123.32	263.00	44.50	25.87	192.63	69.31	0.96|	Sept.	0.76*	Jan.1936	71.06	22.62	33.93	2.55	130.16	281.00	45.50	26.08	209.42	79.26	1.29*	Dec.	0.73!	May
The above figures are taken from the report of the select committee of the Saskatchewan legislature of 1939, appointed to investigate the cost of farm machinery. Grain prices are taken as cash daily close, at Winnipeg.
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[Stage Direction]
o*
t-*
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James Lorimer Ilsley: In the report of the special committee on farm implement prices at page 1233, which is just after page 1230 on which this table appears, I find the following:
It should be noted that only direct labour in the factories is included in labour costs and that these do not include labour in the foundries which manufacture grey and malleable castings. This item of labour cost with foundry material and foundry burden is included in the heading "material".


Roy Theodore Graham: The hon. member for Dauphin happened to mention my name. I am quite familiar with the report the hon. member for Melfort spoke about; my memory is quite clear on that point. Before I left to attend the banking and commerce committee he had already mentioned the cost of labour as being a small percentage of the total cost of a binder as referred to in the report of the committee. The hon. member for Dauphin is quite right. It is quite obvious to any one who studies the cost structure of a binder that at least seventy-five to eighty per cent of the cost is made up of labour. This labour is expended in getting out the lumber and processing it, in manufacturing the steel and iron in the smelter, on the railroads in taking the raw material to the implement factories where the various parts are processed into the completed implement. The hon. member for Dauphin is right; at least seventy-five to eighty per cent of the cost of a binder is made up of labour.


Percy Ellis Wright: I think I made it perfectly clear when I put the first figure on the record that it was the factory cost I was quoting. I was not quoting the total labour cost, and that is perfectly clear from my first statement. The hon. member for Dauphin and the hon. member for Wellington South questioned my figures, but I made it perfectly clear that I was simply stating the factory costs. The hon. member for Wellington South did not say that I was misquoting the figures, but he certainly left that impression and therefore I asked to have the table placed on the record.


Mr. McNEYIN:: As a member of the committee I fully agree with the statement of the hon. member for Dauphin and the hon. member for Swift Current.
There is one point that has not been mentioned. Fifty per cent of the material entering into the manufacture of a binder in Canada is made up of fabricated1 pieces which are brought in ready to assemble. As I understand, the hon. member who has just spoken referred to the labour cost in manufacturing a binder. It created a wrong impression, whether he intended to do so or not, I do not suggest that

the hon. member set out to misrepresent the situation, but he certainly left a wrong impression.


William John Ward: What is to be gained by placing these figures on the record? They tell only one-quarter of the story, so that they tell nothing at all. I cannot understand ' why the hon. member insists on having them placed on Hansard.


George Hugh Castleden: I should like to ask a question with regard to the importation of farm implements from the United States. The information I have is that Canadian Cooperative Implements Limited have been granted a certain United States quota of farm machinery to be imported into Canada, but I understand that the restrictions of the wartime prices and trade board prohibited this cooperative from, importing these goods because they had not been importing them prior to 1940. Have these restrictions been removed?


James Lorimer Ilsley: So far as I know they have not. I do not know whether they are prohibited entry. It seems to me that I remember some correspondence about that cooperative. The wartime prices and trade board does not treat cooperatives differently from other businesses in Canada. They are allotted a quota based on their previous business.


George Hugh Castleden: This cooperative did not have any imports prior to 1940. The minister has told us that there were difficulties in getting farm implements into Canada. This company was granted a quota to take farm implements from a firm in the United States, but the restrictions of the wartime prices and trade board prohibited the cooperative from getting these implements across into Canada.


James Lorimer Ilsley: Is the hon. member right when he says that the United States has granted this firm a quota?


George Hugh Castleden: There are no restrictions so far as.the United States is concerned. The United States will permit the company selling these goods in the United States to export them, but the restrictions of the wartime prices and trade board prohibit their entry into Canada.


James Lorimer Ilsley: There has to be an equitable distribution. The thing cannot be done in a haphazard way, first come first servedl, or some people would be put out of business entirely. Persons in business are treated on exactly the same basis, according to the same rules. My recollection is that a great many importers do not like that, but want favoured treatment.

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George Hugh Castleden: The United States firm is manufacturing these implements and is ready to sell them to the cooperative, and if the restrictions were removed this farm machinery could be imported into Canada.


James Lorimer Ilsley: I do not know what the facts of the case are.


Wilbert Franklin (Frank) Rickard: As a farmer I want to congratulate the minister and the government upon taking off the 71 per cent duty on farm implements as well as the ten per cent war tax. I think it is something that will be beneficial to the farmer. We were importing in 1940 about $30,000,000 of farm implements, and 71 per cent, plus the ten per cent war exchange tax, amounts to a considerable sum. This year and) in the years to come there is no doubt that the farmers will be buying many more implements than they have been in the past. Farmers have had to use implements that are out of date and practically not fit to do the work.


Thomas Reid: That is why they have money.


Wilbert Franklin (Frank) Rickard: Perhaps that is one reason. At the same time, if they can buy implements they are certainly going to buy them, and the more they buy the greater will be the production.
I was particularly interested in the remarks made by members of the official opposition with respect to this reduction. The hon. member for Broadview, the hon. member for Peterborough West and the hon. member for Qu'Appelle were opposing the removal of the duty on farm implements. As long as I have been in this house, I have heard from the official opposition-


Ernest Edward Perley: Pardon me, the hon. member for Qu'Appelle did not oppose this reduction. I pointed out the benefits that might be derived from it. I did not oppose it at all.


Wilbert Franklin (Frank) Rickard: I accept the hon. member's statement. But he said that the benefit was very little. We have heard so long from the official opposition that something should be done for the farmer, and now when something is being done for the farmer they oppose it. Were they speaking as individual voices, or were they speaking as the voice of the leader of the Progressive Conservative Party?


Mr. ROSS (St. Paul's):: Why not talk about the member for Brantford City?


Wilbert Franklin (Frank) Rickard: The leader of the Progressive Conservative party is going about telling the people of Canada that we must have freer trade. If the members of the official nnposition who have spoken on this item tonight are representing their leader, we must take it that Mr. Bracken is not a free trader but a high protectionist.


[Stage Direction]
Item agreed to.
Items 409. 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409h, 409i, 409j and 409k agreed to.
Customs tariff-J09n. Portable engines with boilers, in combination, for farm purposes: horse powers; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Percy Ellis Wright: I do not see small stationary gasoline engines in this list. Are they to come in duty free for farm purposes?


James Lorimer Ilsley: No.


Percy Ellis Wright: They ought to be included
in the free list.


James Lorimer Ilsley: They are not agricultural implements.


Percy Ellis Wright: They are certainly used a* much as any agricultural implement. They are used for running the fanning mill, for pumping water, for pressure tanks, for milking machines and for many other purposes on the farm. I see that small gasoline engines to be attached to electric lighting equipment are allowed to come in free, but apparently the small stationary gasoline engine which is so commonly used on the farm is not on the free list. It is a very important agricultural implement. It is used extensively on the farm, and certainly it should be on the free list for agricultural purposes. I am not arguing for its free entry for other purposes, but it certainly' should enter free when used for agricultural purposes because it is an important implement of production.


Robert Fair: It is one of the greatest labour savers on the farm, saving the labour of men and of women too. It is hooked up to several implements on the farm, and I should like to see it included in the free list.


James Lorimer Ilsley: They have never been included in the schedules of agricultural implements. The rate of 7i per cent applied to practically all agricultural implements. The tariffs on engines is an entirely different matter. I would not want to touch this tariff on engines without an exhaustive investigation. You cannot make changes just as simply as that. That is somewhat like the suggestion of the hon. member for Qu'Appelle, who wanted us to put on the free list a great range of household machinery. I made it clear in my budget speech that this is not a far-reaching tariff revision at all. I made it clear that we were taking one class of items, the kind of things always regarded as agricultural
Customs Tariff

implements and machinery, which have always included cream separators, but have never included gasoline engines. It would be out of the question to put them on the free list for farmers alone, because there are so many other people who would be entitled to similar treatment.


Ernest Edward Perley: I object to the sarcastic way in which the minister has referred to me two or three times to-night and on other occasions. I have been sincere in every suggestion I have made. On this point I wish to say that this stationary gas engine has been handled by all implement dealers in western Canada for a great number of years. I myself was connected with an implement firm twenty years ago; we handled these engines and sold several of them. They were part of our agricultural implement trade. While I was home at Easter I tried to buy one of these engines to put over a well to pump water. The windmill had blown down, and instead of building a new windmill, which we could not get free of duty and could1 not obtain material for, I bought a new engine and had to pay a very high duty on it. So that I think this is a very important matter. I agree with hon. members to the left that the minister should consider putting this on the free list, because it certainly will help the farmers more than almost anything else one can think of.


Robert Fair: If the minister after a thorough investigation objects to putting all stationary engines on the free list, I suggest that he make this concession in respect of engines up to three horsepower, because it is the one to three horse-power type of engine which is generally in use on small farms.


Percy Ellis Wright: The minister does bring in gasoline engines for agricultural tractors. He makes a distinction there. I cannot just follow his reasoning in refusing to allow us to bring in small stationary engines used for agricultural purposes, while one can bring in tractors used for agricultural purposes.


James Lorimer Ilsley: Tractors have always been on the free list; these other engines have never been. There are quite a number of small, competent, efficient industries in Canada from the Atlantic to the Pacific manufacturing gasoline engines; and it would be, as I say, entirely unjust to pick out a class used by farmers alone and make those free, because there are other importers who would be equally entitled to consideration, and I should not like to do a piece of tariff-tinkering like that at this time, without much further investigation than it has been possible to give. That comes within the general range of our tariff policy, which is to try to arrange a 
reciprocal basis and get world tariffs down. These engines have never been included with agricultural implements. They bear a different rate from that on agricultural implements. It would be impossible in justice to segregate one class of these engines in that way, and I cannot entertain the suggestion.


George James Tustin: Just before the item carries, in the very next item, 409o, "Equipment for generating electric power for farm purposes only, viz.: engine", is the first item that is mentioned; and that would be practically the same thing that these hon. members are talking about, would it not?


Robert Fair: The fact that this has never been included in the free list before is no excuse for not including it, because to-day we have people dying who never died before. I think the minister might change his mind with regard to these small gas engines, because certainly they are one of the most necessary farm implements we have at the present time.


James Lorimer Ilsley: This item 409o has always been included in the group known as agricultural machinery and implements. It is true that the rate from the United States has been ten per cent instead of 7J per cent, but it has always been included in that group and it is limited to farms. It is equipment for generating electric power for farm purposes.


Stanley Howard Knowles: What kind of engines are referred to in 409n? Steam engines?


James Lorimer Ilsley: They would be steam engines, yes.


Stanley Howard Knowles: But there too, they are segregated: "for farm purposes."


James Lorimer Ilsley: That is right.


Percy Ellis Wright: I might point out with reference to 409d, these semi-stationary engines, if they are attached to a combine, are allowed in free.


James Lorimer Ilsley: They are part of the combine then, are they not?


Percy Ellis Wright: They are a separate engine which sits on the frame of the combine and drives the combine. They are a stationary gasoline engine; they can take them off and use them for other purposes.


James Lorimer Ilsley: But they are part of the combine.


Stanley Howard Knowles: I think the difficulty we over here are experiencing is to understand the minister's objecting to segregate gasoline engines for farm purposes when there is this segregation for farm purposes with respect to two or three other items.

Privilege-M r. Gray don


James Lorimer Ilsley: It has been done for a long time.


Stanley Howard Knowles: People are doing things now which they have not done for a long time.
Mr. LaFLECHE: I think the C.C.F. are never done.


James Lorimer Ilsley: I cannot open up that gasoline engine item without much more investigation than has been possible so far.


Robert Fair: I suggest that the minister sleep on it and give us a little better encouragement to-morrow-give us free gasoline engines.


James Lorimer Ilsley: It will not be to-morrow, I can assure my hon. friend.


Mr. BRYCE:: There are many of these gasoline engines used in connection with dairying in western Canada. Every dairy farm has one of these gasoline engines, and they will wear them out quicker than any other piece of equipment. Every farmer needs them to-day for cooling milk, for putting water through the cooler. If you want to benefit the farmer by reducing tariffs, bear in mind that this is one article which we have to replace oftener than anything else which we must have.


Percy Ellis Wright: I respectfully suggest that the minister let this item stand until he has given the matter a little more consideration, and he will perhaps change his mind.


James Lorimer Ilsley: I cannot change my mind on this item of gasoline engines. I have given it much consideration; and the situation is such that I will not, I must say firmly, carve out an additional item on gasoline engines for farm use or for any particular use. Hon. gentlemen are trying to drive me a little too far on this. We have taken the usual list of agricultural implements and have put them on the free list, and I have given the reasons for doing that. Naturally we could spend a long time here in saying that it would be nice to have this free and nice to have that free, and do it here in the house, without reference to the many ramifications which such an action would have. But I certainly cannot take the responsibility of doing so.


Heber Harold Hatfield: What is the reason for not putting gasoline engines on the free list?


Ernest Edward Perley: Half the farmers in western Canada have one.


Percy Ellis Wright: Do not wait another twenty-five years.


[Stage Direction]
Item agreed to.
Progress reported.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, July 21, 1944