1944-07-03

DOMINION DAY

[Stage Direction]
MESSAGES OF GREETINGS AND GOOD WISHES ON THE OCCASION OF THE 77tH ANNIVERSARY OF CONFEDERATION
Hon. T. A. CRERAR (Acting Leader of the Government):: The Prime Minister (Mr. Mackenzie King) received a number of messages from other governments on the occasion of the seventy-seventh anniversary of confederation. As they conveyed greetings and good wishes to the people of Canada, I should like at this time to give to hon. members the substance of the messages.
In the message from the President of the United States, Mr. Roosevelt said:
No nation is nearer to us and with none have relations been more cordial. Tlje friendship of years of peace has been deepened and strengthened by years of brotherhood in warfare for the common defence and for the maintenance of those simple freedoms by which our

Questions
peoples have lived. Victory is still to be attained but we can soberly say that it is in sight and I know the peoples of the United S-tates and Canada will join their efforts in laying the foundations of a just peace as they have joined their sacrifices in defending common civilization.
The message from the Prime Minister of Australia, Right Honourable John Curtin, reads as follows:
On behalf of the government and people of Australia I desire to express our sincere good wishes on this the seventy-seventh anniversary of Canada's birth as a nation.
This war has brought Australia and Canada closer together than ever before. The many thousands of our young men who have gone to Canada for training under the empire air training scheme have cemented the personal link binding our two peoples. The kindness and hospitality with which you have received them is widely known and will ever be remembered in many thousands of Australian homes.
Not less do we appreciate material assistance *which Canada has given us under the mutual aid system. The large quantities of military supplies and equipment of all kinds which Australia has now received from Canada has been of inestimable value in our war effort.
This year on Dominion Day your thoughts will be with the thousands of young Canadians who are acquitting themselves so gallantly in Normandy. The magnificent war effort of Canada is a source of pride to all those who *have been associated with her in this long struggle for freedom.
The people of Australia send you their cordial greetings and their sincere good wishes for Canada's future happiness and prosperity.
Generalissimo Chiang Kai-shek sent the congratulations and best wishes of all China. His message continued:
The important part you have been playing in furtherance of our common cause lias filled the heart of every Chinese with the deepest admiration. As a result of the decisive victories won by the allied forces on all fronts the days of our enemies are numbered and I am confident that when the war is over our two countries in cooperation with the other united nations will succeed in building a better world order.
The message from the Commissioner for Foreign Affairs of the French Committee for National Liberation reads in part:
In these glorious days, when a decisive battle against our common enemy' is under way in which Canadian troops are heroically shedding their blood for the liberation of France, the French nation expresses its most sincere wishes *for a great -and prosperous Canada.
Messages from the Prime Ministers of Belgium, Czechoslovakia and Poland all referred to the part Canada's armed forces are taking in the liberation of Europe.
Messages of greetings and good will were also received from the President of Haiti, and the foreign ministers of Mexico, Brazil and Chile, as well as from representatives in Canada of other governments.



STANDING ORDERS


Mr. W. H. GOLDING (Huron-Perth) moved:: That the second and third reports of the standing committee on standing orders, presented to the house on June 29, be concurred in.


[Stage Direction]
Motion agreed to.

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

Mr. BROOKS:: 1.	What assistance was given to dehydrating plants in the province of New Brunswick; giving name of person or company assisted, and value of assistance to each, (a) machinery and equipment; (b) development?
2.	Was rent paid in any case for machinery or equipment?
3.	Has any machinery or equipment been sold or offered for sale to any person or company? If so, at what percentage of cost price?


Mr. GARDINER:: 1.	Loan of special machinery and equipment to: Pirie Potato Products Limited, $12,003.69; New Brunswick Potato Products Limited, $16,182.48.
2.	No.
3.	No machinery or equipment has been sold. An offer was made for the sale of machinery and equipment, but this offer was withdrawn when the Crown Assets Corporation was established as the official government agency for the disposal of crown assets.


JOHN C. NICHOLSON
Mr. BLACK (Cumberland):: 1.	Was Mr. John C. Nicholson employed by the government for rehabilitation or other special work in the maritimes?
2.	If so, what are his duties?
3.	When was 'he employed?
4.	What salary does he receive?
5.	What have been his expenses to date at,
(a)	the Lord Nelson hotel; (b) additional expenses; (c) total expenses and salary?


Mr. MITCHELL:: 1.	Engaged as investigator-National Selective Service.
2.	Chairman of the mobilization survey committee, under whose direction all industrial surveys are screened for man-power supply.
3.	January 17, 1944.
4.	$3,000 per annum.
5.	(a) $631.39-January 17 to May 31, 1944.
(b)	$31083-January 17 to May 31, 1944.
Questions

(c) Salary $1,120.97; total expenses $942.22. Grand total $2,063.19-January 17 to May 31, 1944.


FLAX PROCESSING PLANTS
Mr. BENCE:: 1.	How many bushels of flax for linseed oil and oil cake purposes were produced in Canada in 1943?
2.	What is the anticipated production of such flax in 1944?
3.	What flax processing plants were in operation in 1943, where is each located, and who is the owner of each?
4.	What flax processing plants were constructed in Canada in 1943, where are such plants located, and who is the owner of each?
5.	What flax processing plants have been constructed in Canada in 1944, where are such plants situated, and who is the owner of each?
6.	What flax processing plants are under construction in Canada at the present time, where are such plants situated, and who is the owner of each?
7.	What is the total flax crushing capacity in Canada at the present time?
8.	What is the total anticipated flax crushing capacity in Canada in 1945?


Mr. ILSLEY:: 1.	Approximately 17,900,000 bushels.
2.	Acreage intentions in 1944 are reported at 2,069,600 acres.
3.	Dominion Linseed Oil Co., Limited; plants at Baden, Ontario; Montreal, Que.; St. Boniface, Man.; Canada Linseed Oil Mills Limited; plants at Toronto, Ont.; Montreal, Que.; Sherwin-Williams Co. of Canada, Limited; plants at Montreal, Que.; Winnipeg, Man.; Toronto Elevators Limited1; plant at Toronto, Ont.; W. R. Carpenter (Canada), Limited; plants at Hamilton, Ont.; Vancouver, B.C.; Alberta Linseed Oil Mills Limited; plant at Medicine Hat, Alta.
4.	W. R. Carpenter (Canada) Limited Hamilton, Ont.
5.	No plant has been constructed in Canada in 1944.
6.	Two plants are under construction in Canada at the present time but neither of them will be exclusively operated for flaxseed. The plants in question are: Victory Mills Limited, Toronto; and Prairie Vegetable Oils Limited, Moose Jaw, Saskatchewan. These plants will be operated by means of expellers and/or solvent extraction and will, therefore, be versatile and may process any vegetable oil-bearing material whatsoever.
7.	The total flax crushing capacity in Canada including capacity which is interchangeable for other oil-bearing material is estimated at approximately the equivalent, of 6-4 million bushels.

8.	The estimated crushing capacity for all vegetable oil-bearing materials will probably amount to 7-7 to 8-2 million bushels. It is impossible to say just what percentage of this capacity will be utilized for flax crushing purposes.


MOTIONS FOR PAPERS
Mr. LACOMBE:: For a copy of all correspondence, telegrams and other documents in the possession of the department concerning the following recruits from _ the county of Laval-Two Mountains (division E, Montreal), who were called under the provisions of the mobilization act:- Berchmans Laurin, Anatole Lauzon, Lorenzo Gauthier, Jean-Paul Lauzon, son of Oscar Lauzon, Maurice Glindon, of Oka, county of Two Mountains, and Jacques Lalonde, Yves Lavoie, Cyrille Lepage, of Cap St. Martin, county of Laval.


Mr. MITCHELL:: The hon. member for Laval-Two Mountains has a copy of the files, and I would recommend that this motion be dropped from the order paper.
Motion dropped.


ARMY RECRUITING-PACIFIC COMMAND
Mr. GREEN:: For a copy of all reports on army recruiting received from the Pacific command during the period from the first day of April, 1944, to date.


Mr. RALSTON:: Mr. Speaker, the documents asked for in this order are confidential and are not those usually producible. I submit for that reason the motion should be dropped.


Mr. SPEAKER:: Dropped.


Howard Charles Green: These are reports dealing
with recruiting. We get reports in the house from time to time with respect to recruiting, and I say they do not come in that category at all. I am not willing to have the motion dropped.


James Layton Ralston: Yes, we get reports in the house, but from a minister; the hon. member does not get reports from officials. The reports asked for here are reports from officials of the department, which from time immemorial have been regarded as confidential. I submit the motion should be dropped.
Motion dropped.


LABOUR RELATIONS BOARD-CHIEF INVESTIGATOR, INSPECTION STAFF
Mr. KNOWLES:: For a copy of all correspondence in the possession of the Department of Labour and the wartime labour relations board, dated since

Monetary Conference
March 1, 1944, relating to the appointment of Mr. James Leslie as a chief investigator for the inspection staff of the wartime labour relations board, including a copy of all correspondence with trade union organizations relating to the said appointment.


MONETARY CONFERENCE
[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: 
Hon. J. L. ILSLEY (Minister of Finance):: I do not think it occurred to anybody, when selecting a delegation from among members of parliament, to select delegates from any but the government party.


Mr. HANSON (York-Sunbury):: Why?


James Lorimer Ilsley: I understand there is no precedent for it in respect of similar conferences.


Richard Burpee Hanson: The United States did it.


James Lorimer Ilsley: I am talking about Canadian precedents. An entirely different system obtains in the United States of America. This government will have to decide toward the close of the conference what its position will be, and will have to do so on the advice of its delegation. If a representative were taken from the Progressive Conservative party, then it seems to me the Cooperative Commonwealth Federation party would have a fairly good claim to have their school of thought represented, as would also the Social Credit party.


Mr. HANSELL:: Hear, hear.


James Lorimer Ilsley: I beg the hon' gentleman's pardon?


Ernest George Hansell: Hear, hear, I say.


James Lorimer Ilsley: If the Social Credit party had been asked to nominate a member he would have gone according to the- statement of the Premier of Alberta, with one view in mind, and that would have been to prevent the conference from obtaining its objective. It had been known for a long time that this conference was to be held, and if the matter had been brought up in the house we certainly could have given it consideration. Other matters of this kind are brought up in the house from time to time, and I do not think it ever occurred to the house leader of the Progressive Conservative party-


Gordon Graydon: May I answer that? The reason it did not occur to us at the beginning was that we were unaware there was to be a representation from the House of Commons. At least I did not know of it.
1430	COMMONS
The Budget*-Mr. Hamon (York-Sunbury)


James Lorimer Ilsley: That perhaps is an answer, but certainly there was no great interest taken in the representation by any of the opposition parties.


Richard Burpee Hanson: We have been frozen out so often it is hardly worth while.


James Lorimer Ilsley: I think if I were to put the question to the leader of the opposition, whether he thought it would be advisable- I do not think it could be done, because the official list of delegates was given out weeks ago-whether he thought it would be helpful and make for the success of the conference to have representatives of all the parties in this house at the conference-


Gordon Graydon: I did not say that. I only suggested our members as representing the next government.


Mr. MAYBANK:: May I make this point with reference to the proposal?


Some hon. MEMBERS:: Order.


Ralph Maybank: I do not want to impose my views, but I thought probably the gentleman who has spoken would welcome my remarks. I think the government is in some difficulty in choosing a person to represent the next government, supposing it be not the same as this government, because-


Some hon, MEMBERS:: Order.


Ralph Maybank: -no one would have suggested sending a non-member of parliament, and to get a representative of the Conservative party would mean the government would have to go outside and secure their travelling salesman, Mr. Bracken.


James Lorimer Ilsley: I had no knowledge before Friday of last week that the representatives from the United States were to be selected from both Democratic and Republican parties.


THE BUDGET
[Stage Direction]
The house resumed from Friday, June 30, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Mr. Rowe.
Richard Burpee Hanson: Mr. Speaker, I desire this afternoon to speak briefly on the budget, but before doing so I wish to make a few preliminary remarks arising out of a reflection on this party made

by the hon. member for Rosetown-Biggar (Mr. Coldwell) in the early part of his remarks on Thursday afternoon last, no doubt occasioned by the reflection cast upon his group in the remarks of the hon. member for Dufferin-Simcoe (Mr. Rowe). On that occasion the hon. member for Rosetown-Biggar stated that the nearest approach this country had ever come to revolution was under the Tory party between 1930 and 1935. That was an insult to a great government. It was intended to cast a slur upon the late government; it was intended as an appeal to prejudice. I resent the implication of that statement.
May I say that with respect to appeals to prejudice the hon. member and his group are rapidly becoming past masters. I assert with every degree of confidence that when an impartial history of that dark period between 1930 and 1935 is written, when conditions existed which were not created by the government of the day, it will be shown that the only gesture toward revolution was a manufactured gesture fomented by the communistic and socialistic elements in Canada. That movement, if there was such a movement, was led by the Tim Buck's, the Harold Winch's and others like them. These same people are knocking at the door of the socialist party here in this house and they will soon be in charge. Let me say to the hon. gentleman that while I would not for a moment accuse him personally of preaching revolution or of being a revolutionist, he and his predecessors in office have been encouraging those in this country who preach revolution. He and those around him have started forces which they cannot control. Revolution is a nasty word. Revolution plus force means treason.
I desire now to revert to the consideration of the budget.
In the course of the past twenty-three years I have listened to no less than nineteen budget addresses, delivered by no less than seven different ministers of finance. I recall the clarity of the budgets of Mr. Fielding and the admiration I always felt for his annual budget and the delivery of his annual budget address. I can honestly say that apart from the magnitude of the figures, the colossal and staggering increase in the national debt, and the announcement of contemplated increased expenditures on both war account and peacetime activity, I have never listened to a drabber budget speech than that which my hon. friend, the Minister of Finance, delivered in this house this day week. There were no flashing highlights, no spectacular announcements, nothing to make the blood run more

The Budget-Mr. Hanson (York-Sunbury)
quickly through one's veins; there was nothing to stir the imagination, no sparks and no thrills-you pay your taxes and you take your choice.
If by any stretch of the imagination one could call one feature of the address a highlight, it was that part of it in which the minister, by implication or tacit admission, indicated that the ministry was departing from the oft-avowed policy of the government to pay for the war as you go, as far as possible out of current taxation, and announced a policy of increased borrowing to make up the difference. I suggest to you, Mr. Speaker, and to the membership of this house, that that is in marked contrast with the pronouncements *of ministers of finance since the first war session of 1939, with respect to a policy which I supported at that time and continued to support down through the years. It indicates a change of front, a change of policy, dictated not by any inherent defect in the policy itself, but by a reversion to political expediency, a manoeuvre that has always characterized hon. gentlemen opposite on the eve of an election.
What is the essence of this budget? It is certain now that the essence of this budget is that substantial increased borrowings are to be relied on to absorb a substantial and marked increase in the war appropriation and in peace-time expenditures. Along that path lies inflation, and no one knows it better than the minister. What has become of the policy of controlling inflation? Has the lid been kicked right off? If not, it is pretty near all the way off. I venture to suggest that the minister and those advising him are fearful of the results of this budget. And so I assert with every degree of certainty that such a position is a marked departure from previous policy and is motivated by a desire to appease the electorate by throwing out a crumb here and a crumb there, all of which is doomed to failure at the hands of an outraged electorate, and nobody knows it better than the members on the government benches themselves. They hear it from their own followers; they read it in the daily newspapers; they hear the echoes down through the thousands of miles that extend from Vancouver to Sydney.
We are to raise by taxation and borrowing six billions of dollars, and at the same time we are warned of a loss of income tax revenue to the tune of a hundred million dollars, not to speak of other possible losses, such as, for instance, the millions of dollars withdrawn by the socialization of business, such as the Montreal Light, Heat and Power Company expropriation. We are told that we must
borrow at least $320 million more than we did last year because the cash deficit will be that much greater.
The income loss suggested by the minister is found in the budget resolution which provides that after June 30 there will be no more compulsory savings for individuals. The system was set up two years ago with a twofold purpose-to take purchasing power from the people and thus prevent inflation, and to add to war revenue. I am bound to say in all honesty that at the time that policy was introduced I supported the principle of compulsory savings, although I did not support all the provisions under which the policy was being worked out. Whatever may have been said as to the soundness of the principle, as to its necessity

and it was largely based on necessity-and as to its efficacy, it is now certain that it never was well received by the public. Personally I rather regret that. It was not received well by the public because it bore too hardly on those in the lower income tax groups who had not perhaps the means of substituting insurance premiums or mortgages payments and had less ability to pay. It bore less hardly on those in the higher income brackets, who, while they may have had the ability to pay, also had readily at hand the means of evading the payment of compulsory savings by way of substituting life insurance premiums and mortgage payments under the law as it has obtained to date. All these conditions were well known to the public, and certainly they were well known to the minister when he brought down his proposals two years ago. Now at this last and1 dark hour confronting the administration a change of heart takes place-not necessarily a change of conviction; because I believe that the minister was convinced two years ago that the policy was right, and that he is so convinced now. The' change is based once more on political expediency, a policy so often resorted to by hon. gentlemen opposite. Vain hope! It is too late. The damage is done in the minds of the public. The resentment against enforced savings, withholdings from payrolls already diminished by numerous levies such as subscriptions for war savings certificates, victory bond purchases on a monthly payroll payment plan, contributions to unemployment insurance, enforced deductions for income tax collected at the source, and I was going to say a dozen other like deductions from the workers' pay cheques, rankled in the minds of the wage-earners in the lower income tax groups, and they are not likely to be appeased by an eleventh hour conversion. This party warned the govern-
4432	COMMONS
The Budget-Mr. Hanson (York-Sunbury)
ment at the time the exemptions were reduced to the low level at which they stood recently that they had been reduced to too low levels. Time has proven that we were right.
Especially are the lower bracket wage-earners not to be appeased by this gesture, because it is indicated as clear as daylight itself that the deficiencies created by this gesture of appeasement were accompanied by the announcement that more money must come from the same source in the form of larger and larger so-called subscriptions to victory bonds and war savings certificate campaigns, and presumably by the same strong-arm method that has characterized the administration with respect to inducing men in the home army to enlist in the active army.
We are now in the sixth year of the war. While the end is not in sight, we are all hopeful that victory will soon be ours. I desire now to draw the attention of the house to what I consider to be a glaring omission from the budget, and that is the failure of the minister to indicate in even the slightest degree to business and industry and to the workers in business and industry, and by the same token to agriculture, what is to be the taxation policy of this nation in the post-war world. I know that the minister will say immediately that no government can announce in advance what the fiscal policy of a succeeding government is to be-and there is bound to be a new administration succeeding this one at no distant day. But this government could announce at this time that the tendency of post-war taxation should be downward. That should be the aim of every one of us; because if there is one thing more than another that is causing anxiety to business and industrial executives and to the wage-earners and to the workers and to agriculture, it is this uncertainty, this lack of information or even intimation as to what level of tax structure this country is to have in the post-war period. I say this with confidence, that until the principles, and I go further and say that until the quantum, of post-war taxation are considered and the country is informed what they are to be, business enterprise in this country, while willing and anxious to do so, will be unable to formulate plans for full employment. That full employment must come from private industry, no matter what theories we may hear advanced across this floor. It will come without question from private industry if tax policies are suggested now under which capital may devote itself to new construction, reconditioning, deferred maintenance, and the

capital cost of change-over from war production to peace-time activity, in an intelligent and capable manner, and designed to give that full employment which we all so devotedly desire. With corporation taxes as high as they are, and with no suggestion made or indication given as to what tax policy is to prevail henceforth, it is impossible, I assert, for industry to plan for the future.
I hear this on every hand, and I have no doubt that the government has heard of it. With excess profits taxed at 100 per cent, no company, no industry, can increase its working capital to take care of its post-war requirements. This expenditure, so necessary, must come out of fresh capital investment-risk money, which will not be available until the risk is known and evaluated. I challenge anybody to contradict the soundness of that position. True, my hon. friend knows and we all know that at some time the refundable portion now collected from incorporated companies is to come back, but until this budget was presented that was in the dim and distant future, wholly unavailable until long after the close of hostilities, and1 then only piecemeal. Meantime the refundable portion has been an asset in name only. I happen to know that for a time it was not considered that this should be taken into account in the assets side of a company's balance sheet. There was much debate on that point; finally it was the consensus that it should be taken into account as an asset. If it was an asset, it was an asset in name only-frozen, inconvertible, of absolutely no use except to swell the figures in the balance sheet. Even under the proposed amendment it is little more than a frozen asset; it is not a liquid1 asset. I suggest that this has been and is a bad condition-bad for business, 'bad for employment, and bad for the country. There is no measure of relief for business in this budget.
But my hon. friend will say that there is encouragement and assistance to industry in the corporation tax amendments which he has announced, designed presumably to promote capital outlay for the purpose of post-war conversion. Let us examine that position.
The government has been made aware of the situation to which I have alluded, and I gather that reluctantly it has come to the conclusion that this situation should be eased1. That is about all you can say about it. Two or three pseudo-remedies have been proposed1 by the minister. None of them will be particularly helpful; they will fall far short, I predict, of whait is required.

The Budget-Mr. Hanson (York-Sunbury)
What is proposed with regard to this refund?
It is proposed that business firms may borrow, if anyone will lend them the money on that class of security, the refundable portion of the income and excess profits tax already paid, by way of assignment, upon which they will pay interest of five per cent, or four per cent, as the case may be, while the government allows them no interest. But it is to be done only in cases where in the opinion of the government it should be done. The government is to constitute itself the sole judge; the individual company, to whom the money belongs, has nothing to say about it; and the government has retained to itself the power to say whether the purpose of the assignment is to enable the taxpayer to make capital expenditures which will-again in the opinion of the government and at their whim and pleasure, without any measure of right on the part of the taxpayer- contribute to the post-war conversion of the taxpayer's business and provide substantial employment. All these conditions have to be fulfilled, and the government has to be convinced.
What a power that leaves in the hand's of the Minister of Finance! This government is becoming an oligarchy. We have this session the amendments to the Transport Act and to the Aeronautics Act, and only now is business in this country beginning to wake up to the colossal powers which, under these measures, are being vested in one man. I suggest that the government ought to revise this type of policy, and not establish ministers as dictators -because that is what they are becoming. The minister is setting himself up as a dictator as to who will get his money back and who will not get his money back.
I suggest, sir, that lending institutions will not lend solely upon the security of an assignment of the refundable portion of taxes paid. Of course they- will accept it as collateral; they will take as collateral anything they can get, but to say that any lending institution will lend solely upon the strength of an assignment of this refundable portion of taxes paid is just silly. The C.CE. might. I do not know what they might do. They do not know themselves.


Mr. COLDWELL:: Are you sure that the
Tories do?


Richard Burpee Hanson: I think
we do. We always have had principles, and we have always lived up to them. That is more than some other people have done. If I wanted to go into that sort of thing I could recall what occurred in Saskatchewan the other day, when principles were put into storage for the duration of the election.
One reason why you will never get a lending institution to lend money on the sole security of this assignment is that the time of repayment would be too distant and too uncertain. Such an assignment would, I repeat, be acceptable only along with other collateral, and the character of the borrower.
But that is not my principal objection to the minister's proposal. This refundable portion is the taxpayer's own money, taken from him, if you will, by compulsion, but his own money, lent to the government.


Mr. McGEER:: Without interest.


Richard Burpee Hanson: Without
interest. Some day, after a period of time, he will receive payment. Why should be be obliged to hypothecate his own money? In a bona fide case the government, if it wants to contribute to post-war conversion of a taxpayer's business and provide employment, should give the money back as a matter of right, not as a favour. That is what I object to. This money is going to be handed out as a favour to the taxpayer, and I suggest that fundamentally it is a matter of right to the taxpayer.	.


Mr. ROWE:: His own money.


Richard Burpee Hanson: Another
pseudo-remedy is that suggested by section 31 of the resolution to amend the Income War Tax Act, which provides that one-half of expenditures on maintenance and repairs incurred by any taxpayer, in a period to be at the whim of the government, be regarded as deferred maintenance and repairs and to be deductible as an expense at the option of the taxpayer in certain periods. For that concession, many thanks. But it is too little. We all know what deferred maintenance is, and there is a tremendous lot of it piling up to-day because of high taxation. Ask any industrialist and he will tell you. Obsolescent and worn-out machinery that cannot be replaced-every industrial company to-day has an immense quantity of deferred maintenance, and the need of repairs is great, taxation being what it is. But I ask the minister, why an arbitrary one-half? If it is a good thing and they need the money, why not give full allowance for deferred maintenance? If the principle is good, then it should be applied according to the needs of the industrial establishment itself. Some people may want seventy-five per cent; others may want twenty-five per cent.


James Lorimer Ilsley: Unless they pay half, there
is virtually no check on the amount.
4434	COMMONS
The Budget-Mr. Hanson (.York-Sunbury)


Richard Burpee Hanson: That may be a mechanical or a taxation reason-


James Lorimer Ilsley: It is not.


Richard Burpee Hanson: -but that is viewing it from the point of view of departmental administration.


James Lorimer Ilsley: No; it is not.


Richard Burpee Hanson: It is not
viewing it from the point of view of the needs of industry. The minister's interjection indicates to me that expediency in administration has dictated this arbitrary half, and nothing else.


James Lorimer Ilsley: The hon. gentleman does
not understand my interruption, but I will explain it later.


Richard Burpee Hanson: I think I understand what is meant by the proposal.


James Lorimer Ilsley: But not my interruption.


Richard Burpee Hanson: However, I will wait and hear what the minister says. I am not surrounded by a group of braintrusters. They do not tell me what is in the backs of their heads, nor do they tell the public.
There is one thing that has exercised my mind ever since I heard about it, though some may not consider it a very important matter, and that is section 32 of the income tax resolution. I would like hon. gentlemen to listen to me, because the matter is important, as I see it. Prior to the budget of 1942 provision was made that corporations might deduct from income moneys paid by way of donations to charitable and educational organizations. I am interested in both charitable and educational institutions in Canada, which by the way are suffering because of high taxation. These corporations were allowed to donate up to ten per cent of their profits-


Mr. GIBSON:: Five.


Richard Burpee Hanson: Prior to 1942 it was ten per cent. If the minister will be good enough to follow me he will see that I am right, and we both mean the same thing. In 1942 the general limit of ten per cent was reduced to five per cent without any strings or limitations. That was the established policy of the administration, announced here. It was a tremendous reduction, but I have no doubt the ministry had good reasons for it. I questioned it somewhat at the time, but after all I do not think any of us raised very much controversy over it. Industrial companies were allowed to give five per cent of their profiits without strings or limitations at all. In the case of those in the 100 per cent excess profits brackets it was well understood

by industry, by the government and by the membership of this house if they followed the announcements of the Prime Minister, that such donations came out of the 100 per cent excess, and therefore wholly out of taxation- well, practically so. Now, what have we? I was astonished to read a few days before this house met an announcement by the minister that the settled policy of parliament was to be done away with by a stroke of his pen; and here we have retroactive legislation withdrawing the provision and substituting a new formula, the effect of which is a serious detriment. In fact, it is a knock-out blow to our educational institutions. Retroactive legislation, especially with regard to taxation, is wholly reprehensible. It is a bad principle; retroactive legislation is vicious at any time. I cannot visualize any more honorary degrees for the Minister of Finance. It is now proposed to withdraw the reasonably mild, I will not say generous, provisions under which institutions stood to benefit and to provide that the amount of donations made in excess of the average of the taxpayers donations, in the last two fiscal periods ending before July 1, 1942, shall be allowed as deduction for the purposes of the income tax and excess profits' tax only-and listen to this-to the extent that the total taxes payable by the taxpayer under those acts are thereby diminished by forty per cent of the excess, unless made before February 1, 1944, and paid, or evidenced in writing before that date.
That is an involved formula, and one has to sit down and study it carefully and have illustrations before one in order to know just what it means. But it is just as clear as daylight that it means a definite reduction in the amount that taxpayers may give to charitable institutions under the tax-free clause. In fact, for the reasons which I now give, there will be no further contributions to education from this source. The average of such donations in the two fiscal periods made by corporations which are within the excess profits clause before July 1, 1942, in most cases, was exactly nothing, and therefore in most cases the amount now allowed will be exactly nothing. The larger institutions were very alert. In one case millions were obtained in payments and written pledges. No wonder they gave the minister an honorary degree. The smaller institutions, not so well informed, less alert, not so well organized, got practically nothing.
I consider that the minister's action in changing the regulation and giving notice of the change on the eve of the meeting of parliament, and without parliamentary sanction, was % distinct breach of faith that merits the condemnation of the country. I cannot imagine any

The Budget-Mr. Hanson (Fork-Sunbury)
greater breach of faith with the educational institutions of the country than we find in the minister's actions.
I desire briefly now to refer to two special income tax problems to which the minister referred on page 4179 of his address. The first refers to the treatment of annuities and other like payments, and the second relates to the problem created by the combined incidence of income tax and succession duties upon the holdings of deceased persons in private corporations with accumulated surpluses, which holdings cannot readily be converted into cash, like publicly-listed shares, and because of too-heavy imposts falling at the same time on the same property, cause great hardship. I have not time to deal with the first problem except to say that it is acute and the cause of hardship in certain individual cases, and these hardships ought to be removed, in justice and equity. That they can be removed I have no doubt. It may mean a loss of revenue, and that is no doubt the real reason it has not been dealt with before or even now. Such cases have usually arisen out of wills made prior to great increase in taxation.
On the other point I have some observation to make. I have always taken the view that the federal government should never have entered the succession duty field. I still adhere to that view. The other view prevailed and we had the spectacle of the same dollar being taxed always by two jurisdictions, and in some cases I could mention, by three taxing authorities. I submit that this is an intolerable situation and should be remedied at once. We in the federal field could well afford to yield up the succession duty field of taxation to the provinces, because it yields only $15,000,000 a year. This double taxation endangers the whole future of private and family business. From the small community point of view, and from the point of view of local employment and decentralization of industry and business, the family businesses should and must be maintained. The present tax structure works directly against that view. I have some more material on that point that I should like to put on the record but I understand that my time is very short.
I now desire to say a word or two about the proposed amendment.
I entirely concur in the important principles enunciated in the amendment. Income tax forms and methods of taxation must be simplified and modernized. They are moving in that direction in the United States. Relief must be granted to taxpayers in the lower income brackets, not only because of the increase in the cost of living but also and more particularly to deal with the growing evil of
absenteeism in industry. I venture to assert, Mr. Speaker, that there are many hon. members sitting in this house who are in favour of the proposals enunciated in the amendment sponsored by the hon. member for Dufferin-Simcoe (Mr. Rowe) and who would, if left free, vote for them. That privilege is denied them and they will perforce be obliged to vote against their convictions and the known views of their constituents. Take the position of hon. members representing industrial ridings. Dare they vote against this amendment? I put it to them to-day. Well, they are on the horns of a dilemma. They must choose here and now. Vote against the amendment and face destruction at the polls, or vote according to the dictates of reason. I challenge hon. members from industrial ridings to vote against this amendment.


James Lorimer Ilsley: There is nothing inflationary about the amendment at all?


Richard Burpee Hanson: If I had the time I could answer that, but I have not. I desire to deal more particularly with the concluding paragraph of the amendment, which indicts the government for failure to deal effectively with the question of full mobilization of our financial, industrial and material resources as well as our man-power. For man-power is only one phase of this problem, albeit the most important.
As long ago as January, 1942, nearly three years ago, I made a speech in this house on this important problem. At that time I introduced an amendment to the motion for an address in reply to the speech from the throne. As I look upon that speech to-day I must have been a seer and a prophet, because everything I enunciated in that speech has been brought about by this government except one. If the house does not believe me I page the hon. member for Richelieu-Ver-cheres (Mr. Cardin) and the speech he made in this house in which he blamed the administration for accepting so many of the principles I proposed. I am not going to take up the time of the house to read that resolution, but I have lived to see the day, very shortly after January 26, 1942, when the government began to adopt one by one, piecemeal, every principle I advocated in the amendment, save one. It did not need the statements of the present director of national selective service to tell us that there was an acute man-power situation. There has been but one pool to draw from. After the plebiscite of unholy and unsavoury memory we had conscription and the draft. Have we had honest enforcement of the military draft laws of Canada? The
4436	COMMONS
The Budget-Mr. Hanson (Ycrk-Sunbury)
answer cries "no" to high heaven. The obligations of good citizenship demand that we face this position regardless of all considerations.
Then there is the disgraceful situation relating to the establishment and maintenance of a home army of trained, seasoned troops, said to be seventy or seventy-five thousand strong, costing the nation $150,000,000 each year, held immobilized, neither in the war nor out of it, neither in industry or agriculture nor out of it. This government has simply stalled on the whole question. I appeal to every member of parliament to examine his conscience and his regard for his own self-respect on this issue. Let us for the moment forget the dubious record of the past and with ringing resolution resolve to do the right thing before it is too late.
I appeal to the Minister of National Defence (Mr. Ralston), to his colleague the Minister of Finance (Mr. Ilsley), to his colleague the Minister of National Defence for Naval Services (Mr. Macdonald), to his colleague the Minister of National Defence for Air (Mr. Power). We well know what their position and principles are in regard to this matter. It is well known they have held opinions that coincide with mine, and they have practically so declared in this house. I appeal to them to comport themselves like men, not mice; to cast into oblivion the policy of appeasement which has too long disgraced this nation-


Thomas Vien: Order. The hon. member's time has expired.


Richard Burpee Hanson: May I
have three minutes more?-and then I shall be through. I appeal to them to cast into oblivion the policy of appeasement which has too long disgraced this nation in the eyes of the allied nations, and particularly in the eyes of our neighbours to the south, who have marvelled times without number at the poltroon position which we occupy.
Our gallant sons, fourteen battalions strong, perhaps more, have assaulted the embattled fortress of Europe. Casualties so far have been moderate, but the assaults have hardly begun. They need and will continuously need a large and ever-increasing stream of able, strong, well-trained troops to take the place of casualties which will grow in ever-increasing numbers. Where are these men to come from if not from this immobilized force, Canada's home army? These men apparently never were intended to fight. The fact is they will fight if the government wills that they fight. This playing of partisan politics has been a foul blot on Canada's national effort and unity in this great conflict. This government has consistently not done that which it knew to

be the right and the logical thing to do, that is, enforce equal service and sacrifice everywhere in relation to the war. Let us end all this. If we do not, the verdict of history will be that as a nation we were poltroons and failed in our duty. On this whole question we have an inglorious record. Let us blot out that record, gird ourselves like men and once more lift up our heads, courageous and unashamed.


Mr. CLARENCE GILLIS (Cape Breton South):: I do not intend to deal with the many ramifications of the budget. The hon. member for Rosetown-Biggar (Mr. Coldwell) made a general survey of that subject, and I think set out clearly and specifically the opinions of the people we represent in this house. The only comment I have to make on the remarks of the hon. member for York-Sunbury (Mr. Hanson) is that, as usual, he took a left-handed' swipe at the members of this group, and his whole speech would indicate that he does not like the government or the C.C.F. Well, as long as the people of the country like us and recognize the fact that we are doing the best job we can, we are quite satisfied.
With regard to the budget, the minister did his usual good job in presenting it to the house. It was rather an easy job this time in that there were very few changes in it. He made one change that I think was very important and long overdue-the lifting of the duties, against agricultural machinery. But there was one thing I believe he overlooked. What he did in respect of importations of agricultural implements he should have done in respect of the materials and equipment necessary to the proper functioning of the fishing industry. They too should have been relieved of the heavy imposts levied against the necessary equipment they must import. I leave that thought with the minister, in the knowledge that representations, have already been made to him from different sources since the budget was brought down.
This afternoon in the time at my disposal I shall endeavour to straighten the record concerning certain statements that have been made in the house. First I wish to make the record clear in connection with certain comments of the hon. member for New Westminster (Mr. Reid), in the course of which he made a comparison of interest, debt and the like in Canada and New Zealand. His figures are not correct, and when he made the statement I pointed out to him that he was telling only licilf the story. In order that the record may be complete I shall now give the rest of the picture. I believe we do a

The Budget-Mr. Gillis
disservice to ourselves when we quarrel with any of the nations who are fighting this major conflict with us. Surely we should be most careful in any statements we make as to their internal economy. It is for that reason I correct the record so far as the statement made by the hon. member is concerned.
Only a few days ago we listened to a speech by the Prime Minister of New Zealand. In my view he made one of the best contributions I have heard since I came to parliament. His speech was steady and statesmanlike.
The statement of the hon. member for New Westminster to which I refer is to be found at page 4112 of Hansard for June 23. The hon. member gave no information as to dates, nor did he state the rate of exchange between New Zealand and Canada. He said he got his figures from the New Zealand and Canada year books. The only comparable information is to be found in the New Zealand and Canada year books of 1941-42, covering the year 1940. Information regarding Canadian provinces and municipalities in the 1942 year book covers 1940 only.
I shall not repeat the figures given by the hon. member for New Westminster; they are already on record. I wish to place on Hansard comparative figures for Canada and New Zealand, because the statement made by the hon. member is absolutely incorrect. The figures are lengthy, but I believe it is necessary that they be given. Of course if hon. members would permit me to place them on Hansard without reading them, I would not have to take the time to read them in full.


Mr. REID:: I object to their being put on without being read.


Clarence Gillis: Then I am sorry, but I shall have to read them, if the hon. member for New Westminster insists. These are comparative figures for New Zealand and Canada. The figures given by the hon. member were brief, and certainly they were not at all explanatory.
The direct debt of the dominion is $4,703,-
964,000.	The direct and indirect debt, including government guaranteed loans and securities for Canada is $6,013,322,000.


Thomas Reid: What do they owe Great Britain?


Clarence Gillis: 
Thomas Reid: Does the New Zealand debt include what she owes Great Britain?


Clarence Gillis: Yes. The total dominion debt is $7,888,603,000. The total dominion direct and indirect, including government guaranteed loans and securities is 89,214,920,000.


Thomas Reid: What is the indirect debt of New Zealand?


Clarence Gillis: 
Mr. GARDINER:: That is direct debt?


Clarence Gillis: Direct and indirect; that is their total debt. Our population is 11,420,084 while that of New Zealand is 1,640,000. The same figures apply in working out both direct and indirect debts. Our direct per capita debt works out at $690 and our indirect at $807. In New Zealand it is $840.
The debt figures given by the hon. member for New Westminster were $680 per capita in Canada, and $1,010 in New Zealand. These figures are not borne out by the search I have made.


Thomas Reid: What authority has the hon. member for his New Zealand figures?


Clarence Gillis: The Budget-Mr. Gillis

figures for Canada and New Zealand covering education and social security. These are the 1940 figures.


Mr. TUCKER:: Was that the debt of the dominion and the provinces of this country?


Clarence Gillis: Yes.


Walter Adam Tucker: And the municipalities?


Clarence Gillis: 
James Lorimer Ilsley: That is incorrect, because the hon. gentleman is omitting the provinces.


Clarence Gillis: 
James Lorimer Ilsley: I still say that in the old age pensions figures the hon. member is not including the contributions made by the provinces.


Clarence Gillis: Yes, I am.


James Lorimer Ilsley: In what figure?


Clarence Gillis: In the last figures, the expenditures by the provinces on medicine, health, relief and public welfare. The old age pension contributions are included in the first figure.


James Lorimer Ilsley: What figure is that?


Clarence Gillis: That is the figure of $29,976,000, which along with $42,869,000 for national health makes up the total of $72,845,000. That covers old age and blind pensions and national health. The minister can check those figures.


James Lorimer Ilsley: I do not have to check them. I know that our contribution is about $30,000,000.


Clarence Gillis: This is 1940.


James Lorimer Ilsley: That is what it was then.


Clarence Gillis: If you recheck them I think you will find that this is right.


Thomas Reid: What is the hon. member quoting from?


Clarence Gillis: These are the 1940 figures in the 1941 year book.


Thomas Reid: I was quoting from the 1943 book; my figures were more up to date,


Clarence Gillis: There are no other figures.


Mr. CRUICKSHANK:: Is that the contributory figure?	f


Clarence Gillis: Any one who wants to can recheck and correct me if I am wrong.


George Alexander Cruickshank: Why waste time checking? Let us get it correct now.


Clarence Gillis: 
Mr. HOMUTH:: I do not want to interrupt the hon. gentleman, but has he taken into consideration the amount of money spent by the provinces on education?


Clarence Gillis: Surely. I have already given that.


Karl Kenneth Homuth: Then I do not think the hon. gentleman's figures are correct.


Clarence Gillis: Mr. Speaker, I am talking on my own time now. I have put the statement on the record, and if it is wrong, any hon. member has a right to correct it. So far as I am concerned they are the only figures available. I endeavoured to get them up to date, and that is the statement as I got it.


Thomas Reid: I shall be satisfied if you will quote 1943.


Clarence Gillis: You cannot get them; you cannot get our own for that year.


Thomas Reid: We will give you our copy. Here is the proof .


Clarence Gillis: The second matter I wanted to comment on was the statement made in this house by the Minister of Munitions and Supply (Mr. Howe) on June 19, 1944, to be found on page 3926 of Hansard. I am sorry the hon. member for York-Sunbury (Mr. Hanson) is not in the chamber, because a few days ago he was anxious to hear this. The statement made by the Minister of Munitions and Supply was in answer to a question put by myself as to why some coal

The Budget-Mr. Gillis
mining collieries in Nova Scotia were not working on Saturdays. My question was prompted by a resolution which I had received from some of the mine workers' unions.
At that time the Minister of Munitions and Supply-I am not blaming him for this, because I believe he is anxious to find a solution to the problem-read into the record a statement which he had received from the fuel production board. That statement pointed out that production in the coal mines of Nova Scotia was down to an alarming extent and that absenteeism had increased beyond what could be considered as at all sensible. In effect the minister led the house and the country to believe that the deplorable state of affairs outlined by him was due to one cause only-absenteeism. He led us to believe that the miners of Nova Scotia were not working and that as a result production was down. That is the way I would have takeu that statement had I not been in the house and known the circumstances. As I say, I am not blaming the minister for making the statement, but I do want to place the other side of the story on the record.
I want to make it very clear that I am not condoning absenteeism in any way, shape or form. To the extent that absenteeism may militate against production in the collieries, I say it should be removed. It is the prerogative of those charged with the getting of production, the emergency fuel board, the operating companies and the miners' unions, to see to it that that particular cause is removed. But it is not responsible for the drop in the production figures as the minister was led to believe and as this house was led to believe from his statement.
I want to jog the memory of the house on one point. In the 1943 session the Prime Minister declared that an emergency existed in this country in connection with fuel. Upon that declaration being made, the government appointed an emergency production board, which was given sufficient authority and administrative latitude to see that the production in the mines of Canada was brought up to the point where it would assist our war effort and guarantee domestic fuel supplies. Rather than an indictment against the mine workers of Nova Scotia as one listening, to it might be led to believe the statement put on the record by the Minister of Munitions and Supply stands as an indictment against the emergency fuel production board. The board had supreme authority, and I know that the Minister of Finance, through his department and other agencies of the government, has made available to the board the necessary financing and everything it needed
100-279i
to see that production was increased. Why was production not increased? What happened that it was not increased? I say that the statement put on the record by the Minister of Munitions and Supply stands as an indictment against the efficiency of the fuel production machinery set up by the government. There is no other way you can look at it. If I am given a job and the necessary machinery to do it, and the necessary finance, and I do not get that job done, the responsibility is mine.
I wish the Minister of Munitions and Supply were here, because I am going to endeavour to show him, as I did on a previous occasion in this house, exactly why you are not getting coal production in the mines of Nova Scotia. We did that when the board was set up from our places in the house, and if the machinery 'which was recommended by myself and by the mine workers had been set up, the situation would not be what it is to-day I am certain of that.
Was this present production situation not anticipated? Did it drop out of a blue sky? I do not think so. The premier of Novai Scotia appeared before the reconstruction committee on December 2, 1943. He commented on the production situation and fully anticipated the very situation we have now. He elaborated on the number of tons that had been produced last year and forecast for the following year a shortage of approximately
1,200,000	tons. Why? Because he knew the situation. He was at least realistic about it. Anyone who wants verification of this statement will find it in the minutes of proceedings of the reconstruction committee volume No. 35. There you will find Premier MacMillan's statement that he anticipated the production situation we have now. The only people who did not see the picture as it really was were the heads of the fuel production board. Who were they? First you took in Mr. Henry Borden. My friends to my right have himi now as organizer, and I hope he does as good a job there as he did on the fuel production board. He was the head of Barclays bank. Do you expect to get fuel production by bringing from Toronto to Ottawa a banker and giving him authority to organize your coal mines of Canada? I talked for an hour with him when he first came here; I was toldt by the Minister of Munitions and Supply to>
go and see him. He is a nice fellow, but he had not the slightest idea of the job he had to-do-not the slightest. Right along, instead of picking men who knew production in the collieries to assist these boards and organize the machinery at the point of production where you would have had a solution to the problem,.
The Budget-Mr. Gillis

you fastened on men from the top down who were interested in maintaining private enterprise and their control on the economy of this country, and not interested in getting coal production by organizing the people who were producing the coal, because that might mean losing a little bit of their authority. That is the reason you did not get production, and there is an indictment against your fuel production board that will stand for all time, the indictment that was read into the records of this house by the Minister of Munitions and Supply.


Humphrey Mitchell: I think my hon. friend will admit that steps were taken to organize war production committees to increase the production of coal. That was done by the Department of Labour and by the Department of Munitions and Supply.


Clarence Gillis: Yes, but they were not organized.


Humphrey Mitchell: They are organized.


Clarence Gillis: Your production committees as you visualize them in that industry will not get production, because in the mining industry of Nova Scotia you have a one .hundred per cent organization of the workers, and you have a mine committee that functions six days a week, acting as a liaison between the manager of the colliery and the local union. That committee has certain * definite functions to perform within the limits of the contract signed by the company. The solution is not there.


Humphrey Mitchell: If that is not the solution, perhaps my hon. friend will tell me what his solution is. We tried sincerely to increase production. We set up a special board on which organized labour and the employers were represented here in the city of Ottawa, and we have also two field men in Nova Scotia with the end in view of setting up production committees. My information is that an understanding has been arrived at between the management and the mine workers' union of America.


Clarence Gillis: by being about three cents better off than they were prior to getting the increase. That kind of thing does not make for harmony, nor does it get you production.


Gerald Grattan McGeer: Why were they only three cents a day better off?


Clarence Gillis: For the simple reason that
the company went about chiselling on other rates, to such an extent that the men wound up by being about three cents a day better off than they were before the dollar a day was granted to them.
Here is a letter from Douglas McDonald, who is a member of the legislative assembly and also a board man of the United Mine Workers of America in the New Waterford district. He writes this letter of his own volition; I did not ask him for it. He says:
This morning, June 20, thirteen loaders from .17 West Wall No. 12 colliery were forced to .come home after going down to place, the face 'was left unprotected,. no hardwood blocks or .props for men to put up, and piles of hardwood *and thousands of props on surface. Here is a loss of approximately 220 tons of coal. . . .
He goes on to tell me the story. It confirms what I pointed out a moment ago. With your other machinery functioning, with contacts through the medium of your mine committees and your production committees which could be utilized later, conditions of that kind would be reported direct, the machinery would function properly on the job, and these conditions would not exist.
In connection with working on Saturdays-


Thomas Vien: The hon. gentleman's time has expired.


Clarence Gillis: I shall be through in a minute. There is something more in that story than the Minister of Munitions and Supply would indicate. I have here an editorial appearing in the Glace Bay Gazette of June 29 in which I observe that action is going to be taken by the miners' union against selective service for not enforcing the regulations with respect to the men being kept on the job. According to this, men are reporting for work on Friday nights and reporting on Saturdays, and they are being sent home from the colliery, which [DOT]constitutes a violation of a certain section of national selective service regulations. I know that these men are not quarreling with the officials and the people down there, trying to get the mines working on Friday nights and on Saturdays because they want to create an [DOT]impression somewhere. They are not.
If I may take a minute before I close, I would like to point out that one factor that is feeing classified as absenteeism, and incorrectly
Mr. Gillis.)
so, is that hundreds of the younger miners who produced coal in 1939 to the extent indicated in the minister's report, working a fairly decent man-day, through which production was built up, are to-day in the services in France and Italy. We have now in the mines in Nova Scotia, and I presume the same is true of the west, older miners whose backs have been broken, so to speak, loading coal and working five or six days a week, and who are not able to maintain the production which the younger men could maintain up to 1939. They were working only two and three days a week; every pound of coal that could be produced was produced within two or three days, so that the figures given by the minister in that connection are not correct.
I merely wanted to emphasize the two points I did, without going into the budget specifically, because I thought it was necessary that the record should be clarified in these two particulars.


Walter Adam Tucker: Our country is almost at the end of the fifth year of its participation in the greatest war in human history. Amendments to the budget emphasize the various alleged sacrifices at home, but I suggest that the real sacrifice at this time in this war is that of the young lives that are being cut off, or the sacrifice made by young men who are being seriously injured on the veiy threshold of their lives. If we are to bring to fruition the better things for humanity made possible by the untold sacrifices that are being made, we of the united nations should continually remind ourselves that we failed our young soldiers, sailors and airmen, to a great extent following the last war. We had high hopes at that time and talked very much as we do to-day; we said that it was a war to end all war and that we were going to build a world fit for heroes to live in. Our failure to live up to the high hopes then held out-and that failure cannot be denied, for another world war has occurred within twenty-five years of the close of the last one, and we have had widespread unemployment, such as prevailed particularly in the thirties throughout the world-should indicate to us that it is not enough to have good intentions. We must have very well thought out plans in order to avoid the same results following this war.
Obviously Canada cannot within and by herself totally take care of the problems which face us, because no self-contained reorganization of our internal set-up can entirely prevent a similar failure again. We must this time avoid past mistakes and resolve to do our part both within the country and externally to see that these mistakes are not repeated

The Budget-Mr. Tucker
after this war. This will entail our taking full part in the world organization to guarantee peace. Personally I cannot think of anyone who is more likely to see that Canada does everything that is possible to promote this end than the present Prime Minister (Mr. Mackenzie King). In my judgment it would be a tragedy if anything happened to prevent him from representing Canada at the peace conference. Any hope of a lasting peace must be based on our doing all we can to see that a just peace is established, so that we shall have a peace that will not break down in spite of our efforts to preserve it. The present Prime Minister's long experience of world affairs, as a negotiator and conciliator, should make his contribution a most important and perhaps vital factor in a successful peace conference. In this connection I submit that we must not only restore the brave peoples of France, Poland, Norway, China, Czechoslovakia, and other overrun countries, to full freedom and liberty; we must support other peoples in their aspirations toward freedom, liberty and self-government.
In this respect there is one people in particular in whose welfare Canada should take a special interest. They are people who have made in the past and are making now a substantial contribution to the building of Canada, and in this war they have taken a most worthy part in our war effort, having enlisted in our armed forces, and in^ every other way having done their full share in supporting the war effort. Their splendid efforts have been the cause of admiration and pride on the part of all Canadians. I refer to the Ukrainian people. I hope that the day is not long distant when the Ukraine will be a unified, free and self-governing nation. When that day arrives, the Ukrainian nation will be one of the great powers of the world. It will consist of forty-million people inhabiting one of the richest parts of the earth's surface. The Ukrainian people in Europe, by their courageous defence of their homes, by their enormous sacrifices in this war, have surely earned the right, if any people have, to their full measure of freedom and self-government, and I hope they will have it immediately following this war. I urge this government to give this matter their special attention so that when the peace conference comes it can give these aspirations of the Ukrainian people its full support.
I cannot let this occasion pass without again paying my humble tribute to the way in which those of all racial origins in Canada have united in the common service of the country. I feel that they have all done and are doing their part now, and after the war
people of all racial origins in this dominion will be able to look back on this era of great accomplishments with pride in the achievement of the various sons of Canada, regardless of their origin.
Turning now to the domestic arena, in which we must not again fail to guarantee a minimum standard of well-being to our people, young and old, I welcome the various steps already taken and to be taken by this government to bring economic security to our people. I feel that a tremendously worth-while step was taken in this direction by the enactment of the Prairie Farm Assistance Act, which gives the farmer some measure of economic security when he loses his crop or there is a crop failure. I believe this measure will have to be extended in western Canada by a greater measure of individual crop insurance. As it stands, however, it has been a most worthwhile contribution to economic security in western Canada.
I welcome the family allowances bill because it will ensure a certain income to all families in Canada with children under sixteen years of age, regardless of loss of position, regardless of loss of crops, regardless of the death or incapacity of the bread-winner. And since it is such a real humanitarian measure I personally find it hard to understand the opposition to it by some radical labour leaders.


Thomas Vien: Order. I must call the hon. member's attention to the fact that the family allowances measure is now before the house in the form of a resolution. He will have an opportunity to discuss it when it again comes up. He must not discuss it now.


Walter Adam Tucker: Mr. Speaker, I had in mind the fact that the money for that purpose was provided in the budget and that it would not be out of order to mention my support of the measure in the budget address.


Thomas Vien: The hon. member will have an opportunity to discuss it when it comes before the house. On another occasion I had to call one or two hon. members to order on the same point.


Walter Adam Tucker: The same objection may apply to what I intended to say in support of the health insurance scheme.


Mr. MACKENZIE (Vancouver Centre):: No; that is not before the house yet.


Walter Adam Tucker: I would say that I welcome the measure to provide a real health insurance scheme for this country. I understand that all that is necessary to put it into operation as a workable and comprehensive scheme, perhaps as good as that of any country in the
The Budget-Mr. Tucker

world, is the full support of the provinces. 1 hope that it will receive that support and that we shall have in the near future a real measure of health insurance in Canada.
I also welcome the farm improvement loan scheme, because it is designed to improve the homes of our farming people. Since I have been in this house I have taken the attitude that our farming people are as much entitled to the amenities of life as people living in the cities, and if the provisions of this measure are brought into effect I think it will halt the tendency of people to move from the rural areas to the cities. I certainly welcome the bill by which the farmers may hope to improve their homes and equipment.
I commend the government most heartily for its provision that profits in agriculture may be charged back in regard to income tax against loss for one year or forward against loss for three years. It is well known that farming is a most uncertain industry, and while it was on a yearly basis, of course the profit of one year on which the taxes would be paid might be entirely wiped out by losses the next year or the following year. I am sure that that measure of relief to our farmers will be much appreciated throughout Canada.
As to the floor under farm prices, that again * is a recognition of something that has been perhaps overdue, but, at any rate, I welcome it. For many years it has been recognized that labour is entitled to minimum wages. At last it is recognized by our government which takes the attitude that farmers are entitled to minimum prices for their products, just as labour is entitled to fixed minimum wages, and for that reason I think the farming community of this country should welcome that measure being brought in at this session.
However, Mr. Speaker, underlying our ability tp finance and provided a high standard of living for our people in Canada without tremendous dislocation and interference with our individual freedom is the preservation of markets for the commodities which we produce in such enormously larger amounts than we can possibly consume in Canada. We know that in the decade before 1913, when we had a good market for our products, Canada enjoyed prosperity; likewise, we had real prosperity in the decade from 1919 to 1929, at which time there was also a real market for our exportable surpluses. During the period from 1930 to 1939 when world trade was dislocated by severe restrictions to trade by various nations we had a depression and suffering not only in Canada but throughout the whole world, and that includes Soviet Russia which was under a socialist government. Now the question is, has the world

learned its lesson in regard to the futility of each nation trying to live unto itself alone and build up a self-contained economy? I hope it has, but signs indicate that we should not take this for granted and should see to it that we in Canada maintain in office a government which does believe in promoting and improving world trade.
Canada is more dependent for prosperity upon retaining a market for her vast agricultural surpluses than perhaps any other country. I realize that to-day in theory we all believe in retaining world markets; theoretically we do. But world markets like everything else in this world can be obtained- only at a price, and I suggest that that price is our willingness to accept payment for our exports by imports. So far as we in Canada are concerned, except for the small part of our imports which come from countries which can grow produce that we on account of our climate cannot grow, the bulk of our imports consists of goods which we can produce in Canada albeit at higher cost and sometimes much higher cost. A protective tariff is designed to keep out goods which we cannot produce in this country as cheaply as we can import them. By so doing not only does it raise our cost of living and production but, what is even more disastrous, it destroys the means of other countries buying any of our exports. As I have stated, anyone who studies the effect of trade on Canada's economy must be struck by the fact that we in Canada depend perhaps more than any other country on export trade. Approximately one-third of our national income comes directly from the sale of our exports in foreign markets. A large part of the remainder of our economy in turn depends upon the purchasing power of the third within Canada which does depend directly upon foreign trade. Therefore the part of our economy which depends upon purchasing power based upon world trade is very large. One has only to think of the difficulties of our farmers from 1930 to 1939 owing to the curtailment of our export market to realize this point. Think of what would happen if by trying to establish a self-contained economy we lost our export market for wheat. Not only would about three-fifths of our western farmers have to turn to some other occupation, but the value of their lands, buildings and machinery would be practically wiped out, if only a fraction of the land now used was required to grow the wheat which could be used and exported.
In this connection I most earnestly commend the government for removing the customs tariff on farm machinery, including milking machines and cream separators, for removing the war exchange tax of ten per cent from these

The Budget-Mr. Tucker
articles and1 for removing the tax on component parts of the same articles imported in connection with their manufacture in Canada. One of the things that seems to be overlooked is that, as I understand the situation, these items will now enter Canada from any other country of the world duty free. I do not think the words of the leader of the Cooperative Commonwealth Federation (Mr. Coldwell) in this regard are warranted in referring to the total abolition of such imports as a " mincing step," as he did in this debate. He said that farm machinery is monopoly controlled! and that something should be done about this. If such a condition does exist, no more decisive blow could be struck at that monopoly than to make all such articles free of customs duties, no matter from where imported, as is now being done. The leader of the C.C.F. took this attitude himself in times past and his late leader took the same attitude. If machinery can be brought in free, not only from the United States but from any other country, no monopoly can long exist and control prices, under those conditions.
The leader of the C.C.F. also used the argument that when the tariff on farm machinery was reduced, prices to the farmers actually rose. He, and others who use this argument, know very well that this is a specious and incorrect argument against tariff reduction. The reason for the rise in prices of farm implements in past years, in spite of a lowering of tariffs on imports from the United States of America, has been that cost of production, including freight rates, raw materials and taxes, has risen both in the United States and Canada. Wages, too, have risen. A large proportion of the increase in prices of farm implements has actually been due to the rise in the cost of labour.
The average annual earnings of labour en gaged in the manufacturing industry has risen by 212 per cent between 1910 and 1942, and from 1935 to 1942 by 45 per cent. As I understand it, the C.C.F. holds out the hope to labour that this upward movement in wages will be encouraged, not discouraged; so that I do not think the argument about the rise in prices being due to tariffs should be put forward by that party.
This raises another point. If the C.C.F. gets into power, and the farm implement industry is socialized, wages raised and working hours reduced, and it is found that, for example, Russia, with longer hours and lower wages, can make farm machinery cheaper, what would my hon. friends of the C.C.F. do? I do not think they would raise the tariffs; it would not be necessary, because they would operate our trade under an export and import
board. Imports could come in only with the permission of the import board, which the C.C.F. promises to set up. All imports of farm machinery from any other country could be excluded.
The socialized farm implement industry could then pay as high wages as it wished, and be as inefficient as it probably would ultimately become, under bureaucratic management. It could provide work at good salaries for hundreds of inspectors and government officials, and no one would be worse off except the farmer, who would probably be paying twice as much for his machinery as would, for example, his competitor in the Argentine.
Would this not extend to every other necessity of the farmer which could be made in Canada? Farmers' costs would necessarily sky-rocket. Where would this put the farmer, when he was placed in competition with farmers in other countries? I know the C.C.F. have an answer. They would pay more to the farmer for his produce. Having severely curtailed imports, they, of course, would have curtailed exports because nations after this war will be able to pay for our exports only if we take their exports in payment.
The C.C.F. would be in the position of having to buy the farmers' products, the market for which they had largely destroyed. And they would have to buy at increased prices. What would they do with those products? Who would pay the increased costs? They could not let prices of farm products go up in Canada, for that would take away the benefit of increased wages to labour. Taxes would be the only answer. On whom would those taxes fall? Necessarily they would fall on the people who earn money and have property. Since all major industries, except farming, would be socialized, under their present programme, it looks as if that industry would come in for pretty heavy taxation in order to supply the income the government would need to enable it to pay the farmer for the produce which it would buy and not be able to use.
I have condemned high tariff policies of Canadian governments in the past. The policy of the C.C.F. in handling our trade by export and import boards, on which of necessity the majority of the members would be from the central part of Canada, would in my judgment be far more disastrous to the farmer than any conceivable policy of high tariffs ever tried by any government in the past.
I believe we are entering a phase in world affairs when we, of all countries, should not think of entering into a socialist experiment which inevitably would lead to our losing a

The Budget-Mr. Tucker

substantial part of our world markets, and our haying to try to establish a self-contained ' economy resulting in terrific convulsions in our national economic organization, with consequential terrible hardship on our people.
So far as I am concerned, therefore, in the best interests of the farmers of this country, and particularly the people of Saskatchewan,
I feel I should uphold the Liberal party, not because it has always done everything I should have liked to see it do, not because it has always moved as fast as I should have liked to see it move in the past-


Stanley Howard Knowles: Mr. Speaker, I rise to a point of order, and call your attention to citations numbers 238 and 239 in the third edition of Beauchesne's Parliamentary Rules and Forms. I take it that those citations rule against the reading of speeches in the house.


Some hon. MEMBERS:: Oh, oh.


James Garfield Gardiner: All the speeches made so far in this debate have been read.


Walter Adam Tucker: All I would say to that is this: I am not as skilful at reading my speeches as is the leader of the C.C.F. party, and his followers. I have not been doing it for so long.


Mr. COLD WELL:: That is evident.


Walter Adam Tucker: If they can do it, I think I can. I wished to-day to take up as little time as possible, by putting what I had to say in as concise language as possible.


Thomas Vien: In previous years I have referred to the practice of reading speeches which has grown up in the house. Where ministers have read their speeches a certain amount of latitude has been given, because it is understood that they are stating policy. In that circumstance, latitude was given. However, that was not applied to other hon. members. During this debate I had not noticed any great amount of reading, with the exception perhaps, of the hon. member for York-Sunbury (Mr. Hanson) who stayed with his notes more than he should have done to-day.


Ian Alistair Mackenzie: He read every word of it.


Thomas Vien: The hon. member who is now speaking has been reading, a procedure which as already pointed out, is contrary to the rules.


Gerald Grattan McGeer: On the point of order, it seems to me the time has come to revise that rule. You see, it does not make much

difference what a member says in the house, or whether he knows much about his subject. He would probably be able to get someone to write a speech for him, and that person might write a much better one than he could wrrite himself. But when one of the ministers is privileged to rise in his place and read something that is written for him, that is a different matter altogether. The ministers of the government ought to know enough about the subjects they discuss to be able to speak on them. It seems to me that it is a violation of all the rules of parliamentary procedure to permit seniors to read and to deny the same privilege to juniors. I do not think anyone should read his speech, and I think that ought to include ministers as well as private members.


Thomas Vien: I have nothing further to add. The provision has been accepted by the house that a certain amount of latitude be allowed the ministers. That is a provision with which I entirely agree. If a minister wishes to read, in the circumstances I have indicated, the practice has been that he do so. But when hon. members speaking on their own behalf read their speeches, as the hon. member has been doing, they are breaking the rules of the house. And, since the question has been raised, I must ask that the rules be complied with.


James Garfield Gardiner: Speaking to the point of order, I have been listening to this debate since the beginning of it, and there has been only one member who has not read his speech. That was the hon. member for Cape Breton South (Mr. Gillis). Every other hon. member who has spoken has read his speech, whether he was a minister, or whatever he was. I suggest that at least we ought to continue what we have started, until the hon. member who is now speaking has completed his speech.


Mr. JAQUES:: On the point of order, I agree entirely with the hon. member for Rosthern (Mr. Tucker). We who sit in the body of the house, Mr. Speaker, can see what Your Honour cannot see from your seat. What the hon. member for Rosthern has said is perfectly true. I would suggest that perhaps the majority of speeches delivered in this house are read.


An hon. MEMBER:: Speak for yourself.


Norman Jaques: I have never done it. I have never acquired the skill to do it. But it is a fact, and I agree with the statement made by the hon. member for Rosthern. Perhaps it is not done in committee, but in formal debate many speeches are read.

The Budget-Mr. Tucker


Thomas Vien: I have ruled already as to the practice and custom of the house.


Walter Adam Tucker: I made up my mind that on this occasion I would follow the precedent established by all members of the C.C.F. who have read their speeches ever since they came here or at least for the past two or three years. I watched the leader of the C.C.F. read the speech he made in this debate, and I decided that if that were going to be done by the C.C.F. party and by the leader of the C.C.F. party, I had as many rights as the leader of the C.C.F. party and that if he were to be permitted to read his speech, I could read mine. It is the first time in my life I have read a speech in this house. If I am to De called to order for reading my speech then 1 insist that the members of the C.C.F. party be made to deliver their speeches and not read them. Just because they can hold them far off and follow them with their finger is no excuse. I watched the leader of the C.C.F. party following his speech the other day with his finger, and now we are greeted with the spectacle of one of his followers raising a point of order because I am reading a speech, something which I have never done before. I refuse to use any subterfuge. I was following my notes; I was reading my speech, but I read it on purpose partly, I may say, with the thought in mind that if objection were made it would bring this matter to a head. I am going to ask that the C.C.F. members be made to deliver their speeches in future without reading them.


Thomas Reid: The point of order was raised in order to spoil your speech.


Walter Adam Tucker: So far as the situation confronting this country to-day is concerned, we have the alternative of the Liberal party which proposes to go ahead and provide the economic security which the country is willing to support by taxation. It is going to base that economic security upon world trade, which is the only sound basis for it in the long run. I have pointed out already that the C.C.F. party are making promises that they will raise wages. If they raige wages, they will raise the cost of production of the goods made in this country. That will raise further the cost of production of the farmers. By action of import and export boards, imports then will be excluded, and the result will be that other countries will be unable to buy our exports. That will do more to destroy the economic production of this country than high tariffs ever did.
They will destroy our exports, and then they turn around and say that they are going to buy those products from the farmers at
higher prices. They are holding out that inducement. That is the situation; that is the phoney policy which is being put up to our farmers. They are going to raise wages, which of necessity will raise the cost of production of the farmer. Then in the next breath they say that they are going to promote industry by protecting the production of industry by import boards. This will exclude imports from coming into our country, and then what will happen to the production of the farmers?
I suggest that the inevitable result will be the establishment of a self-contained economy in Canada. We, of all countries, depend most upon exports, upon what we can sell other nations, and yet here is a programme to set up a self-contained economy. If they do not intend to set up a self-contained economy they cannot possibly raise the .cost of production in this country by raising wages. If the cost of production is raised of everything the farmer produces, how can he be expected to compete in the markets of the world? Therefore they must intend to subsidize the farming industry and, in doing that, they will have to tax heavily. As I pointed out, these taxes will of necessity fall upon those who are left to run their own affairs, those in receipt of incomes. It will simply mean that the farmer will have his markets destroyed and that all he will have will be the promise of higher prices for the things he will not be able to sell, to be paid by himself in higher taxes. These products will simply pile up. A situation based upon such plans is bound to collapse.
It is on that basis that they have gone throughout this country holding out the hope of higher wages and higher pay to everybody who works, holding out the hope of higher rewards to the farmers and everybody else. They know very well that to carry out their promises Canada would have to reorganize her whole economic set-up on a self-contained basis. It would mean the replacing of at least three-quarters of our farmers in other work which they would not be able to do as well as what they are now doing. That is the fallacious system upon which the C.C.F. policy is based.
So far as I am concerned, I believe that the Liberal party will reestablish the returned soldier as well, if not better than any other country. I believe that we have a leader who has the admiration of every other leader in the whole world. He will be able to make a great contribution to establishing an international system which will guarantee the winning of a peace that will be just and lasting.
The Budget-Mr. Tucker

Our present programme is one which aims at the establishment of the greatest possible measure of trade between the nations of the world. That is of more importance to Canada than it is to any other nation. It would be a tremendous and terrible mistake for our people at this stage to elect to power a party which believes that you can somehow establish a self-contained economy without rearranging the economic structure of our people.
Canada is going to occupy an important position at the peace conference. She will be one of the British commonwealth of nations; she is a nation on the American continent and will have a great influence upon the attitude the United States will take. Canada is in an influential position in regard to any attitude she may adopt. If we put into power a party that believes in a self-contained economy, a socialist economy, we .shall have to get away from freer trade; we -shall have a self-contained economy, the very thing that helped produce this war. In spite of all that, we have the C.C.F. party pretending that their policy will lead to an era of greater peace. I submit that their policy of a self-contained economy is one of the basic reasons for the outbreak of this war. That is one of the things that helped to put Hitler in power; it is one of the things that helped to bring about the present war.
They are proposing that Canada which must depend upon world trade should embark upon the setting up of a self-contained economy. The adoption of such a policy would be one thing that would help to destroy individual freedom in this country. Are they prepared to reorganize our people, to transfer perhaps three-quarters or two-thirds of our farmers to other industries? A number of countries in Europe endeavoured to be self-contained, and the adoption of that principle led to all the controls and interference by government officials we do not like in this country.
The issue which lies before this country in the near future is whether we want greater prosperity with more individual liberty or less prosperity with more bureaucratic control by the state; more in the way of self-contained economy and less in the way of well-being for our people. That is the great issue that will be put before the country.
The C.C.E. are to-day rejoicing in their measure of success in Saskatchewan, but 1 think in the near future the people of Canada, not only those of Saskatchewan and Ontario, once the issue is clear will adopt a policy by which Canada will once more be one of a family of friendly nations, one of a family

which is willing to live and let live and to provide the greatest measure of freedom to its people and the greatest possible measure of social and economic security as great as the world has ever seen.


Mr. ROBERT FAIR (Battle River):: Mr. Speaker, in rising to speak on the sixth war budget I feel that I am starting out at quite a disadvantage, because my speech like all the others I have given here is not written, nor is anything I am going to say imported. My words will be entirely my own and based on experience. So that if my speech is not up to the high standard maintained so far, do not blame me because I am doing my best.
I feel it my first duty to pay tribute to the men and women who have gone overseas to fight our battles over there and to express to the relatives and friends of those who have fallen or been seriously injured my deepest sympathy. Having done that, I turn my thoughts for a little while to the budget.
Like a good many others who listened to or read the budget speech of the Minister of Finance (Mr. Ilsley), I am quite disappointed in it. We were looking for great things and we have got great things in some directions, but I am sorry to say, not in the right direction. The minister has on previous occasions referred to the revenues - of this country, and we must, of course, give him credit for being a very good collector, or at least a very good suggester for the other fellow to do the collecting.
I should like to refer for a moment to the $813,000,000 of personal income tax collections. I am not in opposition to the principle of personal income tax, but I feel that it is not administered just as well and as equitably as it should be. For that reason I am opposed to the income tax as proposed in this budget. I feel that those in the lower income brackets should be relieved of much of their taxation, and I am also in favour of the compulsory savings portion of the income tax which has hitherto been in effect being continued if certain amounts of revenue have to be raised. I believe that it would be much better to maintain the compulsory savings feature and alleviate the income tax on the lower income groups. I believe that that would be much sounder and that it would accomplish the minister's ends much better.
I also believe that in the interests of this country income tax on pay for overtime should be abolished. When people work overtime they are entitled to a little breathing space so far as income tax is concerned, and with the country needing extra production the minister would be well advised to drop the income tax on overtime earnings.

The Budget-Mr. Fair


James Lorimer Ilsley: May I ask the hon. gentleman a question? If overtime were relieved from taxation, would he suggest that the money that the farmer earned because of overtime work be also freed from taxation, and, if so, how?


Robert Fair: The minister is admitting now for the first time that the farmer does work overtime. If he wants to base it on that I shall have an answer for him on another occasion. But this is the first time I ever heard the minister admit that the farmers work overtime.


James Lorimer Ilsley: I have never denied it.


Robert Fair: Then why not see that the farmer gets a little pay for his work?


James Lorimer Ilsley: I have no objection at all.


Robert Fair: And his wife and children should not be forgotten.
I shall refer only briefly to family allowances because Mr. Speaker would rule me out of order if I dwelt upon that subject, but the minister made reference to it in his budget speech. I accuse the Minister of Finance of stealing some of our platform. I am also going to accuse him of calling this provision family allowances and of paying these allowances under a system that should not be in existence. We advocate a dividend for all, paid with debt-free money. The minister advocates allowances for children up to a certain age, and paid for either with debt money or by taxation. His proposal amounts only to a redistribution of the poverty we still have in this country. The programme is not wide enough, and, when the minister studies things a little longer, I believe he will see that there is a better way of putting his plan into effect.
I consider that the old age pensioners have been neglected. A short time ago an amendment was made to the regulations to permit an old age pensioner to earn up to $125 a year without any deduction being made from his $25 a month pension. When a man or woman reaches seventy years of age there should not be any restrictions on the amount of money he or she may earn because, if they are ambitious and strong enough after all those years of toil to go on working, they should be free to earn all they can without affecting the amount of their pension which should be 150 a month at sixty.
Another problem that we have in this country is our educational system, and perhaps there is a reason for keeping it in existence. The taxes imposed on business are always charged back to the farmer, so that
the farmer is the basic taxpayer of the country, and he is overridden by taxation at the present time. Our municipalities and provincial governments cannot supply an adequate system of education under our present taxation system, and if we want competent teachers to stay in the teaching profession grants will have to be made by the dominion government to the provinces and these grants will have to be administered by the provinces in the interests of Canada as a whole. Our educational standard is not high enough. It is better perhaps than in some other countries;: but why compare a poor system of education with one that is poorer? The best that we could have is none too good for Canada, particularly when Canada could well afford a better educational system if only our affairs were properly managed.
Some proposals have been brought down with respect to a health programme. These are long overdue. I should like to see different means brought about for financing these health services. Of course, I am well aware that the health services ane yet only on paper and that it may be some time before they are a reality, but I hope we do not have to wait long for these health services, which Canada can well afford to put into operation.
I come now to agriculture. I must not forget that, particularly because the Minister of Finance has given the farmers some consideration in this budget. In his budget speech at page 4184 of Hansard I find this:
Canadian agriculture will he faced with important opportunities in the post-war period and if it is to take full advantage of them, its costs of production should he at the lowest practicable level. Recognition of this fact was given by the farm improvement loans hill and several important provisions of the bill for the extension of the bank charters now under consideration by the banking and commerce committee. These measures have as one of their most important objectives the provision of credit facilities to farmers which will enable-them to purchase agricultural implements at: the lowest cost on a cash basis. With the same end in view, the government believes it appropriate to provide at once and without waiting for the completion of reciprocal arrangements with other countries for the removal of all customs duties on agricultural implements. It is therefore recommended that agricultural machinery, including cream separators, and parts thereof, be made free under all tariffs. While if is impracticable from a revenue standpoint to remove the war exchange tax on the general range of commodities, the war exchange tax on agricultural machinery and cream separators and parts thereof is being removed, along with the customs duties.
On behalf of farmers all over Canada I say t* the minister, "Thank you for removing those custom duties and the war exchange tax". I feel that they should- never have been put.
The Budget-Mr. Fair

on. I do not think there was any excuse for it. Agriculture was down in the gutter and being stepped on right along, and those things are just further impositions to keep the farmers down where they should not be.
In connection with credit facilities to purchase farm implements, the rate of interest in the past was too high; it is still too high; and any benefits which may accrue through the farm improvement loan bill can speedily be offset by an increase in the prices of the implements we have to buy. It is my belief that the implement business has been a racket for a number of years. My suspicions were confirmed by the committee which, I think in 1938, investigated) the farm implement business. So that if the government would see to it that unnecessary profits were not reaped from this business it would do agriculture a great service. I feel also that the farmers are being turned over once again to the bankers, with part of the credit guaranteed' by the government, so that we can see where the government's friends come in.
I am glad that the Minister of Agriculture <IMr. Gardiner) is in his place. I have here [DOT]quite a few figures which support statements [DOT]made by me on several occasions that the farmers are being robbed through prevailing prices for their agricultural produce. This government came into office in 1935. They
were in full control of prices during the crop years 1935-36 to 1942-43 inclusive, and farmers did not live any too prosperous a life during that period. I admit that at the moment conditions are better than they were in 1935; but why should one be expected to compare conditions which are not up to standard with poorer conditions? In 1935-36 the farmers of Canada marketed 216,273,373 bushels of grain at a price of 874 cents a bushel. Had we received what we were entitled to, the price paid would have been $1.60; that is, if we were given the same treatment as organized labour, and who will argue that we are not entitled to similar consideration? I am stating this because organized labour was allowed the highest level of wages between 1926 and 1929. Using the 1926 to 1929 figure for fixing our parity price-and I do not agree that that is the proper period to be taken for this purpose- we should have received $1.41 a bushel for our wheat. This means that upon that crop alone we did not receive $116,579,373 to which we were justly entitled. That is based on the 1926-29 period, when the farmers received 16-6 per cent of the national income, although constituting approximately one-third of the total population. In tabulated form the figures of wheat sales for the crop years 1935-36 to 1942-43 are as follows:
Year	Bushels sold	Price	Suggested parity	Amount not received1935-36	216,273,373	[DOT] 87J	$1.41	$116,579,3731936-37	165,628,731	1.22	32,087,3221937-38	125,471,078	1.31	12,913,5331938-39	290,539,457	.80	179,189,4171939-40	427,312,750	.70	306,740,9471940-41	458,382,611	.70	329,093,7411941-42	227,854,572	.70	164,590,3781942-43	268,219,159	.90	139,403,292Less wheat board payments	$1,280,598,003 60,000,000Loss to farmers based on $1.41 per bushel..	$1,220,598,003
So that when some people tell us that the farmers are living in clover during the war years, I say that such people had better study the problem all over again. The figures I have given cover wheat only; if we go into other products, here are some prices to which we are justly entitled but which we are not getting. In the case of oats-based again on the same terms for labour-we should receive 69 cents a bushel, and we are receiving 61| cents. For other products the corresponding figures are: barley, 79| cents instead of 90 cents; flax, $2.75 instead of $3. Again let me point out that if we were getting parity prices
{Mr. Fair.]
the figures should be based on the period 1915-19'instead of 1926-29. In the fourth year of the last war wheat averaged $2.24 a bushel, and up to the present time our high price this year is $1.25. Perhaps I should quote the prices for the various crop years: in 1935-36 874 cents; in 1936-37 $1.22; that is on the open market, there being no wheat board purchases; 1937-38, $1.31 on the open market. In 1938-39 the initial price of wheat dropped down to 80 cents. In 1939-40 we were threatened at first with a price of 60 cents a bushel, which would have netted farmers for the top grade of wheat a little over 40 cents, but this was finally

raised to 70 cents. In 1940-41 and 1941-42 the price of 70 cents was maintained. In 1942-43, after more than 400 farmers and other business representatives came from the western provinces to interview the government, the price was raised to 90 cents; and only last September, for the crop year 1943-44 the price was increased to $1.25, guaranteed.
For the purpose of computing income tax a five-year instead of a two-year period should be used, because there are plenty of ups and downs in the farming industry. While a farmer might break even or even make a little profit in one or two years, over five years he might experience a considerable loss.
Another question, which I believe is receiving the consideration of the Department of National Revenue, is that of taxation on payments we are getting from the wheat board on the 1940-1941 and 1942 crops. I notice that the Minister of National Revenue (Mr. Gibson) is present. I would point out to him that we farmers, while waiting for our money from the wheat board, were paying interest on debts which should have been discharged with this wheat board money, also paying storage on the grain and interest on the initial payment. During the years 1940, 1941 and 1942, income taxes were much lower than they are at present, and it would be entirely unjust to require the farmers to pay the high rate of tax which prevails on incomes at the present time. I understand that the committee is working on this matter, and I hope the point I have raised will be taken into consideration. Last year I asked the Minister of Finance to exempt farmers entirely from the income tax brackets until the injustices that prevail are removed. He did not see fit to do so, and I am renewing that request to-day.
There are other things that are not satisfactory. For instance, there is hog grading. We had a change of system which is very good, but it is not working out in dollars and cents from the point of view of the farmer. Someone near by says that it has been fixed up for him as a start. That may be another way of fooling the farmers a little longer. The packers who finally handle the hogs when they are ready are guaranteed the full amount of profits, and the farmer gets what is left, or a certain share of it.
There are other things to be fixed up and I trust the Minister of Agriculture will see to it that a number of them are attended to. The same thing is going on in connection with the beef cattle market. The farmers are not satisfied with the services that are being rendered. Wool prices are in the same unsatisfactory condition. While last year the minister made
1, 1944	4451
The Budget-Mr. Fair
comparisons with prices paid in the United States, his argument did not hold very much water, because he was arguing on the basis of our wool being shipped to the United States and sold there. My argument is that there is no reason why our wool in Canada should not bring as good a price here as United States producers receive there for their wool, because in most cases they buy at a better price than we are allowed to buy at.
We are told that when we have legislation providing floor prices under agricultural products everything will be all right. I can agree with that, provided that the floor is placed at the proper level. If it is placed in the basement, or if the basis for fixing prices is taken on what prevailed during the depression years, in 1932, for example, when farmers received five per cent of the national income, then we might as well have no floor. We have to get to the point where the farmers will have their proper share of the national income before we shall have a proper adjustment basis. In that connection I might say that we have on the order paper a resolution which has been standing there since February 7 in the name of the hon. member for Bow River (Mr. Johnston) as follows:
Whereas agriculture has seldom received its fair share of the national income of Canada;
And whereas the cost of producing all agricultural products varies considerably from year to yoELr *
Therefore be it resolved,-That, in the opinion of this 'house and in the interest of the nation as a whole, the government be requested to set the prices of agricultural products at such a level that it will guarantee to the farmers of Canada such a yearly percentage of the national income as will have the same relation to the national income as the agricultural population bears to the national population of Canada.
On these grounds I believe we shall get that which is properly coming to us, but while we continue to figure on some false foundation there is no possibility in the world of Canada becoming the nation it should be. There is no reason either why the farmer should be treated as the poor relation. The farmers are finally waking up to the fact that they are not receiving just treatment. Perhaps that is why our Saskatchewan friends cannot agree with the reading of speeches in the house or even speeches delivered in any other way by some hon. members, because the farmers of that province not very long ago told the government in very plain terms that they were not satisfied and that something had to be done. When I say that I do not mean that the farmers of Saskatchewan and the businessmen out there voted for socialism. They were simply not satisfied with the machine they had. They did
Private Bills

not think it was giving them what they wanted and they thought they would break the machine and then get the necessary changes. I believe the farmers of Saskatchewan want security with freedom just as the rest of us do, and perhaps in the very near future we shall have things built up in that province on a more satisfactory basis.
Dealing again with the old soldier settler problem, I suggest that we have to continue pressing for this, particularly because of certain articles that appeared in the Legionary, the official organ of the Canadian Legion. I have seen the May issue, which contained a bitter attack upon the requests that have been and are being made by soldier settlers for clear titles to their land. It was written by a civil servant of the government, who, I understand, went to the legion convention and got in his work there. He wandered into a committee room where a committee was dealing with the resolution on soldier settler business, and burnt-out veterans, and said that he hoped he was not intruding. When the facts are known I think it will be seen that he was intruding and that he is not wanted by the soldier settlers of Canada.
I cannot place all the blame on this particular civil servant. The minister in charge has to accept his responsibility also, and if the Veterans Land Act which is being administered at the present time is to be a success, then the business of the old Soldier Settlement Act and the Veterans' Land Act must be removed from the charge of the Minister of Mines and Resources and a different man put in as director. I am quite satisfied that we shall not and cannot have a satisfactory administration while the present set-up exists there.
At six o clock the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS


CONSIDERED IN COMMITTEE-THIRD READINGS
[Stage Direction]
Bill No. 16, for the relief of Pinnie Rosenhek Leopold.-Mr. Casselman (Grenville-Dundas).
Bill No. 29, for the relief of Joseph Ulric Edouard Burns.-Mr. Hill.
Bill No. 51, for the relief of Goldie Anker Lazanik.-Mr. Boucher.
Bill No. 58, for the relief of Adelard Belanger.-Mr. Hill.
Bill No. 81, for the relief of Alice Robert Rajotte.-Mr. Hill.

Bill No. 113, for the relief of Frances Eleanor Campbell Coleman.-Mr. Mellraith.
Bill No. 114, for the relief of George Igaz.- Mr. Casselman (Grenville-Dundas).
Bill No. 115, for the relief of John William Frank Draper.-Mr. Emmerson.
Bill No. 116, for the relief of Sam Sokoloff.- Mr. Mellraith.
Bill No. 117, for the relief of Leon LeBrun. -Mr. Macdonald (Brantford City).
Bill No. 119, for the relief of William Taffert. -Mr. Mellraith.
Bill No. 120, for the relief of Belle Bailey Leibovitch.-Mr. Mellraith.
Bill No. 121, for the relief of Gertie Shulman Friedman.-Mr. Mellraith.
Bill No. 122, for the relief of Sarah Slutsky Shapiro.-Mr. Mellraith.
Bill No. 123, for the relief of Jessie Dickson Mackie Toy.-Mr. Hill.
Bill No. 124, for the relief of Angele Pauline Edgar Marie Lambert Choux.-Mr. Fulford, Bill No. 125, for the relief of Margaret Kathleen Hollenbeck Fortin.-Mr. Fulford.
Bill No. 126, for the relief of Hulda Von Koughnet Lynch-Staunton.-Mr. Boucher.
Bill No. 127, for the relief of James MacMillan McHale.-Mr. Homuth.
Bill No. 128, for the relief of Vernon Ross Aiken.-Mr. Boucher.
Bill No. 129, for the relief of Frederick Richard Channon.-Mr. Factor.
Bill No. 130, for the relief of Ernest Charles Hazard.-Mr. Whitman.
Bill No. 118, respecting the General Missionary Society of the German Baptist Churches of North America, and to change the name to the North American Baptist General Missionary Society.-Mrs. Casselman.

[Stage Direction]
Bill No. 140, for the relief of James Russell Popham.-Mr. Mellraith.
Bill No. 141, for the relief of Norma Segal Katz.-Mr. Maclnnis.
Bill No. 142, for the relief of Harold Almond Jelley.-Mr. Douglas..
Bill No. 143, for the relief of Josephine Kurys Kulczycki-Mr. Whitman.
Bill No. 144, for the relief of Shirley Harte Harvey Payne-Mr. Hill.
Bill No. 145, for the relief of Pearl Anneta Benn Russell-Mr. Whitman.
Bill No. 146, for the relief of Joseph Adelard Paul Begin.-Mr. Maclnnis.
Bill No. 150, for the relief of Eugene Charron.-Mr. Macdonald (Brantford City).
No. 151,' for the relief of Lillian Bessie Noall Salmon.-Mr. Hill,

The Budget-Mr. Fair
Bill No. 152, for the relief of Joan Helen Gorham Glover.-Mr. Emmerson.
Bill No. 153, for the relief of Elsie Hollingsworth.-Mr. Casselman (Grenville-Dundas).
Bill No. 154, for the relief of Louis Joseph Jules Laurencelle.-Mr. Macdonald (Brantford City).
Bill No. 155, for the relief of Freda Altman Scheien.-Mr. Factor.
Bill No. 156, for the relief of Ivan Walter Moore.-Mr. Mcllraith.

[Stage Direction]
The house resumed consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and on the proposed amendment thereto of Mr. Rowe.
Robert Fair: When the house rose at six o'clock I had commenced to deal with the problem of soldier settlers who settled on the land after the last war. I had made one or two recommendations and I do not intend to deal with this matter in detail this evening, because several members including myself have dealt with it in detail on other occasions.
On June 14 I went into this matter very fully and I feel that the government is now well aware of the conditions existing. It is sufficient at this time to say that after the end of world war No. 1 some twenty-five thousand veterans settled on the land. After twenty-five years we find that just over four thousand of those have obtained titles and that at the end of March of this year 6,153 still remained on the land, being indebted to the extent of some $7,700,000. I am making a further plea to have clear titles granted to those people.
Under the present set-up of the Veterans' Land Act, 1942, the free grant provided for those settlers amounts to approximately thirty-nine per cent of the total amount expended by way of credit. At the present time the 6,153 are still indebted to the board to the extent of only twenty-nine per cent of their original debt. If this amount is forgiven, if clear titles are issued, those old soldier settlers who were settled on the land under the improvised scheme will not receive nearly as much as those who are to be settled under the Veterans' Land Act. Under the new measure the persons affected are asked to pay off only sixty-one per cent of their total indebtedness. I think the government might very well take this into consideration, when they deal in the near future with the problems of old soldier settlers.
My time has almost expired, and with what is left of it I shall refer to only one or two further matters. I would speak first about our national debt. I believe that, since confederation, in only fifteen or seventeen years have we had a balanced budget, or a surplus. Yet we have been told by the present Minister of Finance that we can and will pay off our national debt. The only way I can see in which that can be done under our present system is by refunding or by renewing the old notes. That is not good enough, because the interest being paid is eating up a lot of the money which should be used for social services, and other things for the welfare of the people.
I say, therefore, that some new system of financing will have to be devised; otherwise we shall soon be the total slaves of our financial system. The main function of the government, as I see it, is, first, to win the war and, second, to make preparations for winning the peace. We have been told time and again that unless those preparations are made before the end of the war, it will be too late. On several occasions we in this group have recommended that certain changes be made in order to make that preparation for winning the peace. To do this, our basic industries-and, first of all, agriculture-will have to be placed on a sound footing. That is one thing which has not yet been done in Canada. All sections of the country and all occupational groups must be treated fairly and equitably; otherwise we cannot have a prosperous or contented people.
If hon. members want any illustrations of this, let them note how the farmers have been treated in the past, and then compare that treatment with the treatment given bankers. I believe one of the best exhibitions of the way in which bankers have been treated has been shown in the banking and commerce committee in the .last weeks. What has happened in that committee has opened the eyes of the people of Canada. They have found out just what is going on along those lines. The battle against the money powers, which was promised by the Prime Minister (Mr. Mackenzie King) in 1935, is being fought and lost, so far as the people of Canada are concerned.
I hold in my hand a clipping from the Saskatchewan Cooperative Consumer of March 15, 1940. I believe this is well worth reading this evening, and I am reading it particularly because we have heard a number of government supporters tell us just what a great man the Prime Minister is. This article will, I believe, state my case just as well as
The Budget-Mr. Fair

I could in my own words. The article is headed "That Astonishing Person"-and I am adding the words "The Prime Minister". It is as follows:
This parable, by an unknown author, illustrates the sad dilemma into which civilization has drifted.
"Man can circle the earth without touching the ground; men can kill other men twenty miles away; man can weigh the stars of heaven; man can drag oil from the 'bowels of the earth; mail can compel an icy waterfall to cook his meals hundreds of miles from the stream; man can print a million newspapers in an hour; man can breed the seeds out of oranges; man can coax a hen to lay 365 eggs in a year; man can persuade dogs to smoke pipes and sea lions to play guitars. Man, in other words, is quite an ingenious and remarkable package of physical and mental machinery.
But, when this astonishing person is confronted with one problem, he retires defeated to his hut. Show him six men without money and six loaves of bread belonging to_ men who cannot use it, but who want money for it, and ask him how the six hungry men can be put in possession of the six surplus loaves and watch him then. It is then that-"
The Prime Minister-
"-attends conferences and appoints committees cries out that a crisis is upon him. He does and holds elections and makes speeches and a score of useless things and then retires to his hut, leaving in the shivering twilight the tableau of the six hungry men and the six unapproachable loaves."


Mr. BLAIR:: Poppycock.


Robert Fair: In order to get the Prime
Minister out of this dilemma I am going to suggest just one solution. There is only one way in which he can get out of that terrible mess into which he has got himself, and which he apparently does not seem to be able to get out of. The answer is: Social credit. There is no other way out of it. I can find no more suitable words with which to finish my speech this evening than to ask the Prime Minister to put into effect a genuine social credit policy, and give the people of Canada economic security with freedom.


Mr. A. M. NICHOLSON (Mackenzie):: Mr. Speaker, while I do not share the social views held by the Minister of Finance (Mr. Ilsley), yet I believe that if the war effort of Canada is to be financed according to orthodox methods, then in the present minister we have as fair a servant of the people as could be found.	.
When one consider? the record of the present government, since a minister of finance presented the first war-time budget in 1939, he must be impressed by what the people of Canada have done under the stress of war. The minister has exploded pretty completely the theory that the efforts of any nation

should be limited in any way by the amount of gold available in bank vaults, or any other place. It has been demonstrated that whatever is physically possible can be made possible by a nation in war time.
We see that while in 1939-40 the total peace-time requirements were only $308,000,000, in the next year those requirements had increased to $390,000,000, while in the next year they were $444,000,000 and in 1942-43 were $561,000,000. The estimated amount for 1943-44 is $630,000,000. But if one looks into the war-time expenditures he finds that they have been increased from $118,000,000 in the first year to $752,000,000 in the next, $1,339,000,000 in 1941-42 and over $3,324,000,000 in 1942-43. In the present year, 1943-44, the amount is $4,624,000,000.
Then, when one considers the expenditures of one department, such as the Department of Munitions and Supply, he finds, that those expenditures have increased from $79,000,000 in 1940-41 to $725,000,000 in 1943-44, or almost ten times as much in four years.
When one takes note of these very large expenditures he might think that hon. members would have been able to support the subamendment proposed by the hon. member for Rosetown-Biggar (Mr. Coldwell), the leader of the Cooperative Commonwealth Federation. May I say in passing that while I support the amendment offered by the official opposition, I should like to have it clearly understood that if I had to choose between having as Minister of Finance the present minister and having as minister the financial critic of the official opposition, I would much prefer retaining the present minister. If one considers the amendment submitted on behalf of the Conservative party he will see it is obvious that it does not really deal with anything fundamental. The first clause reads:
That no adequate steps have been taken to simplify the forms and modernize the methods of taxation.
I hope when we are in committee the mover of that resolution will submit a form that will be simple enough to enable the administration to collect money from the taxpayers by a painless method. The official opposition found it impossible to support the subamendment, which reads:
This house regrets, further, that the government has failed to make provision or plans for the expenditure of, at least, five billion dollars during the first two post-war years for the purpose of establishing a comprehensive national system of social security and of maintaining full employment through public investment in such projects as a low-cost housing programme in town and county, rural electrification, the conversion of government-owned war plants to the production of peace-

The Budget-Mr. Nicholson
time goods, the public development of Canada's oil and mineral resources, the promotion of scientific research, and artistic and cultural work throughout Canada.
The fact that the official opposition was unable to support that amendment indicates pretty conclusively that they really did not believe in an alternative to the methods now being presented by the Minister of Finance.


Gordon Graydon: You had only one speaker who rose and supported it.


Alexander Malcolm Nicholson: The official opposition did not give us any support; to a man they voted against it.


Major James William Coldwell: We said all that was necessary to say.


Gordon Graydon: You spoke, and of course that answered it all.


Alexander Malcolm Nicholson: It was pretty clear that the so-called Progressive Conservative party is really as Tory as ever with the Meighens and the people of King and Bay streets, Toronto, controlling the policy of this newly named political party. When one considers the very large government appropriations in times like these; when one considers that this year the federal government will spend over four billion dollars in directing Canadian production, he must realize that if this country is not going to guarantee an expenditure of at least two and a half million dollars for the first two years after the war is over, then Canada will slide into the worst depression we have ever known in our history.
Some time ago one Progressive Conservative suggested that the synthetic rubber plant at Sarnia should be left to free enterprise. While there are several large companies interested ih the management of this plant, there was no private, enterprise prepared to expend $48,000,000 to experiment in producing a substitute for natural rubber. The people of this country collectively supplied that money. Now that it has been demonstrated that a product which compares favourably with natural rubber can be made in large quantities, a product that promises to be an important factor in Canadian economy when the war is over, we see what must be the policy of this government when the war is over.
Is the government to hand this industry over to free enterprise? Are we to have one synthetic rubber plant or are we to have five or ten? Are ten times $48,000,000 or ten times the amount of material and labour used in the construction of this plant to be expended in the building of unnecessary enterprises? I submit that unless the administration of this country is prepared after the war to continue the
spending of large sums of money, then Canada will not be able to provide full employment for those in the armed services and those now working in war industry.
I think the minister has overlooked the importance of popularizing some of the work done under his direction. While some years ago he boasted of his faith in free enterprise, he found that it was imperative to have control of foreign exchange, to set up the wartime prices and trade board, to have rationing and priorities. As I say, I think it is unfortunate that more publicity has not been given to the important functions carried on by these branches under the Minister of Finance and the part they have played in our national economy. Instead of allowing those who'have been cramped by these regulations to count the days until the war is over, until they will be free from these controls, until prices will rise without any restrictions, until the sky will be the limit in the making of profits, we should be giving the public the details of what has been done. The minister should endeavour to bring the public with him in supporting these controls, not only ib war time but after the war is over, because the danger of inflation will not disappear with the firing of the last gun and the signing of the peace treaty.
I wish to use most of my time to-night to discuss a subject which I think will be a very important one in the post-war period, a subject which unfortunately has not received the attention it should have received in parliament. Since the war started very few members have taken the time to discuss the place that housing plays in the life of Canada. I should like to congratulate the government-the members of this group do congratulate the administration from time to time-upon the excellent report on housing and community planning which was tabled on March 24 and which has recently been printed.
In January, 1943, the administration set up a sub-committee on housing and community planning as part of the advisory committee's work on reconstruction. Professor C. A. Curtis, professor of economics of Queen's university was chairman, and E. R. Arthur, professor of architecture, university of Toronto, was a member. Mr. J. S. Galbraith; Mr. F. W. Nicolls, director of housing, Department of Finance, Ottawa; Mr. J. M. Piggot of Wartime Housing Limited and a number of others were also members. Doctor Marsh acted as research adviser and Doctor Firestone also did valuable research work, as did Mr. Greenway of the dominion bureau of statistics. Never before in Canada have we had such a comprehensive study of housing legislation in the
The Budget-Mr. Nicholson

different provinces and communities. It contains some very useful suggestions and suggests a pattern of the things to come. I should like to remind the house that while Canada has had a great abundance of lumber, cement and other building materials, our housing achievements have been anything but spectacular.
Housing legislation in Great Britain dates back to 1851. The first legislation passed in that year was based on the findings in the Chadwick report. Apparently in those days in Great Britain it took some time to get things done. That report was tabled in 1838 and it took about thirteen years to get action, but by 1851 they had legislation on their statute books and had made a real start toward the clearing of their slums.
A start was made some years ago in the United States, and when I last discussed the question of housing I devoted a great deal of time to describing some of the housing projects I had seen in Boston and in the green belt in Maryland. I want to make it clear that they have not solved their housing problem in the United States. In all their large cities there are slum areas which are eyesores to the people who have to live in them. The cost of maintaining those slums is a very important factor in the taxation structures of the communities, but in Canada we have a very short history in the field of housing.
During the last war the government recognized that you could not have full production if men working in war factories had to travel many miles to and from work, or if three or more families had to live in crowded quarters. It was realized that an appropriation would have to be made to relieve the housing shortage. But following the war it was not until 1935 that the Dominion Housing Act was passed. The results of its first two years of operation were quite disappointing. By 1936 only 936 units were built, but the following year this number was doubled and some experience was acquired which convinced the people of the country that some improvement should be made in the act. Later, in 1938, the National Housing Act was passed. That act has made it possible for people in the higher income brackets to acquire a house at lower costs than previously prevailed. By advancing twenty per cent of the cost and only ten per cent for the lower price houses, people were able to acquire ownership of homes on monthly payments amortizing principal, interest, insurance and taxes which did not amount to much more than they would have had to pay for rent. But the National Housing Act has not relieved

the situation in some areas. It has not made any appeal to the people in the lower income brackets. There are very few lower paid workers who are ever in a position to advance-even the ten per cent necessary to get them started owning their own ho-mes.
Since the war started we have had Wartime Housing Limited, which has relieved the pressure in some of the larger industrial areas, but we cannot view that experiment as having solved anything. Many of the houses built under Wartime Housing were of a temporary nature. The undertaking was given that they would be demolished after the war, so-that they would not become slum areas, but experience has proven that temporary houses; are never demolished as long as less desirable houses are being occupied. With very few exceptions where these wartime houses have been built there is a shortage of permanent houses, and it is hardly conceivable that any administration will compel people to move out of these wartime houses into the public parks so that these hastily built houses may be demolished. They have not been built with a view to permanence, although the Minister of Munitions and Supply (Mr. Howe) indicated on occasions that basements for them would be constructed and some attempt made to have them become permanent houses.
When members consider the very large shifts in population that have taken place-since the war started they will appreciate the immediate problem of having quarters available for our heroes when the war is over. Manj' of these young men got married just before enlisting and going overseas. Their brides stayed on writh their families. It is not good enough to ask these young people to wait for four or five or six years after the husbands return before they will be able to get into quarters of their own.
In Halifax, for example, the number of employees in 1939 totalled something over
8,000,	and in 1942 over 16,000, an increase of over 108 per cent. In Saint John the number of workers increased from 6,000 to
11,000	between 1939 and 1942, an increase of seventy-eight per cent; in Quebec, an increase of ninety-eight per cent; in Montreal, an increase of forty-nine per cent; and further increases w'ere: m Ottawa, forty-seven per cent; Toronto, fifty-six per cent; Hamilton, seventy-one per cent; London, twenty-nine per cent; Windsor, 121 per cent; Winnipeg, thirty per cent; Vancouver, eighty per cent, and Victoria, ninety-five per cent. The total

The Budget-Mr. Nicholson
increase in these twelve metropolitan areas was from 521,000 in 1939 to 826,000 in 1942, an increase of 305,000.
The instructions to the committee were issued in January, 1943. Here we are in the first week of July, 1944. We have this excellent report, but we have no machinery at Ottawa or in the provinces to start the real task of building houses when materials are -available after the war. I think the time is long past when the administration should have announced in detail its housing plans. While some criticism might be made of this report 1 want to urge the administration to implement it, making whatever changes in it they think desirable, but without further delay to announce its plans for housing to the house and have some of the suggestions contained in this report carried out.
It is imperative that the federal administration should make known its plans with respect to town planning. Since the start of the war there has been a very large movement of population to cities like Hamilton, Windsor, Halifax, and the people of these cities naturally wonder whether this influx of people is to be permanent or whether the people will be returning to the prairies or some other part of Canada. It is pointed out in this report that at the time of confederation Canada did not have any large metropolitan areas. Winnipeg, one of the largest cities in the west to-day, at that time had a population of about 200; Moncton, now a busy city, had a population of only 500. There were three fairly large centres at that time: Montreal with a population of 130,000, Quebec with 59,000 and Toronto with 59,000. Ottawa at that time had a population of about 20,000. While Halifax has a very long history, it had then a relatively small population. At the time of confederation those wise fathers of confederation did not anticipate that Vancouver, Toronto and Montreal would in the course of seventy-five years grow to the very large centres they have become, and accordingly did not provide for dividing the responsibility between the dominion and the provinces in regard to town planning and housing. We have not yet determined whether an extensive housing programme should be the responsibility of the federal government, provincial governments or municipal governments. The question has been a convenient football to be kicked around from one administration to another on the ground that the British North America Act did not clearly define the responsibility.
Therefore I suggest that without further delay a conference of the nine provinces with the dominion should be called, with representatives also from the cities and rural municipal organizations across Canada, to discuss the one, single problem of housing with a view to reaching an agreement for the setting up of machinery after the war to relieve the housing situation, so that men now engaged in the construction industry building factories and war plants will be available to go into high gear building homes for our people.
One interesting section of this report deals with farm housing. Again I am grateful that at last a department of government has recognized that people on the farms in this country deserve better houses than they have hitherto had. I find, according to one of the bulletins issued by the bureau of census on farm dwellings in Canada, that in Saskatchewan where I live only one farm house out of 100 has running water; in Manitoba, two out of 100; Alberta, three; Prince Edward Island, nine; Nova Scotia, fourteen; New Brunswick, eighteen; Quebec, twenty-five; Ontario, fourteen; and British Columbia has the largest proportion, with thirty-four out of 100.
The situation with respect to electric lighting is similar. Saskatchewan has the worst record in that respect, w'ith only five homes out of 100 having electric lighting. British Columbia has the best record, with thirty-six out of 100. In Saskatchewan, where we have plenty of frost in the winter time and people should be able to store up some ice for summer use, owing to depressed conditions over many years only seven farms in every 100 have mechanical and ice refrigeration.
In connection with the value of farm dwellings, I find that in Saskatchewan the value of the average farm house is $950. New Brunswick, however, has the poorest record in this connection. It has produced very large quantities of lumber, and it should have been possible to acquire some paint there, but the average value of dwellings in that province is only $861. Values in the other provinces are: Prince Edward Island, $1,049; Nova Scotia, $953; Quebec, $1,019; Ontario, $1,421; Manitoba, $966; Alberta, $999; British Columbia, $1,173. Hon. members will be interested in knowing that in the cities in these different provinces people have much better houses. For example, in Halifax ninety-eight per cent of the houses have running water; in Quebec city, 100 per cent; in Regina, eighty-four per cent; Saskatoon, seventy-six per cent. As regards houses equipped with baths or showers, the proportion per hundred in Halifax is seventy-three; in Saint John, New Brunswick, sixty-three; in Regina, sixty-four; in Saskatoon, fifty-eight.
The Budget-Mr. Nicholson

The fact that the people on our farms in all parts of Canada have been obliged to sell their products at such low prices and have had to pay high prices for farm machinery and other manufactured goods has been largely responsible for the small amounts made available for housing.
In the November, 1943, issue of the Economic Annalist, published by the Minister of Agriculture (Mr. Gardiner), there is an interesting report of a survey made in several parts of Saskatchewan; in the prairie area, where we have our good farm lands; in the park area, where we have good lands too but where a good deal more work was involved in clearing the land; and in the pioneer areas, where the heroes of the last war were obliged to eke out a living. In this survey the houses were classified as "poor", "fair" and "good". In deciding whether a house would go into these different categories, the enumerators noted poor foundations, faulty roofs, lack of paint, windows missing, et cetera. In the best area in Saskatchewan only 6-1 per cent of the houses were classified as good, seventy per cent as fair, and twenty-three per cent as poor. In the park area, 9-6 per cent were classified as good, fifty-eight per cent as fair, and thirty-one per cent as poor. In the pioneer area, only 3-7 per cent were good, thirty-nine per cent were fair and fifty-six per cent were poor. In one of these areas-the pioneer area -the average value of the poor houses is given as $207. I am amused, when members of the Progressive Conservative party outline ambitious programmes of housing, to recall the attempts which were made under the premiership of Viscount Bennett, when he was here, to re-house our farm people. We had in Canada in those days plenty of carpenters, lumber and paint. The only thing which seemed to be lacking was gold. Because we were short of money the farmers were not able to acquire lumber. The average value of the poor house in the pioneer area of Saskatchewan was, as I have said, 8207. The fair house was valued at $524.


Karl Kenneth Homuth: Why pick out Bennett? What about the government in power from 1935 to 1939; what did they do about it?


Alexander Malcolm Nicholson: As I explained on a previous occasion, the new administration from 1935 to 1939 were more generous.


Karl Kenneth Homuth: You traded a horse for a rabbit.


Alexander Malcolm Nicholson: The houses built during the Bennett regime in northern Saskatchewan were on a 850 unit basis. Engineers and architects were engaged to draw up blueprints to explain how a $50 house could be constructed,

where the windows should be; and you were required from this $50 to pay for the lumber, the nails, the windows, the roofing and the floors-everything for $50. But the new administration in 1935 increased the amount from $50 to $75.


Karl Kenneth Homuth: They supplied the nails.


Alexander Malcolm Nicholson: You can build a much better house for $75 than for $50, but it is still a $75 house. The nation which this year is going to spend very large sums of money did not seem able to visualize a more ambitious programme for carpenters and other men in the building trade, who had committed no crime, who were the victims of unemployment. It was the men in the building trade who were hit the hardest. I have in mind three exservicemen of the last war who were carpenters in Regina, who came north to my constituency, and were assisted by the administration of the day-$100 each from the federal government, the provincial government and the city administration-to build fifty-dollar houses. These three men are fighting to-day for the second time in their lifetime and their sons are serving with them. Some people argued a few years ago that these men were lazy and good for nothing, but they demonstrated before and are demonstrating again that they are made of the very best stuff.


Karl Kenneth Homuth: Who said they were lazy?


Alexander Malcolm Nicholson: We heard it in the house.


Karl Kenneth Homuth: The only member who ever said that the unemployed were lazy was the hon. member for Wellington North.


Alexander Malcolm Nicholson: Apparently it was the policy of both administrations to keep the people ground down, living in these log shacks, without floors or adequate windows, for they had no other way of getting the wherewithal to build a house. Although they could get lumber at $5 a thousand cut from trees on their own farms, they could not get from the administration $5 a thousand to cut lumber to put partitions in their houses.
Therefore, it is encouraging to find that some recognition has been made of the deplorable conditions on the farms in Canada. In this connection I note some comments regarding the case for farm electrification:
The report of the Manitoba electrification inquiry commission has made the most substantial contribution to understanding of the subject and to the material needed for formulation of policy, in recent times. Its considered judgment is that electricity on the farm has profound and far-reaching effects upon the social as well as upon the economic aspects of farming. It reduces drudgery upon the farm as it has done

The Budget-Mr. Nicholson
in the factory; it increases income; reduces costs of production and, 'by removing the disparity between the rural and urban way of life, brings a large measure of contentment to people on the farm.
I hope that this administration will be able to carry its pious hopes into practice. I wish that hon. members to my right would support the C.C.F. in our drive to have S2J,- thousand million spent each year for two years after the war is over, with a view to having rural electrification carried out.


Karl Kenneth Homuth: After the next election you will be supporting us.


Major James William Coldwell: What optimism!


Alexander Malcolm Nicholson: It is going to be difficult to convince men in the training centres-on Vancouver island, in Newfoundland, on the prairies, at Dafoe-where they have running water and electricity, electric slaves to do much of their hard work, that although we could build power lines, although we could electrify the country during these years, when there was a shortage of man-power, it will be necessary because of the want of money, for them to tighten their belts when they come back and return to the conditions that prevailed in the days of the coal oil lamp. While I was in Saskatchewan recently I visited Island Falls in my riding where we have a large power development. Electricity is so cheap there that the houses are electrically heated and lighted and the citizens have every modern convenience that electric power can furnish. When you think how electricity has transformed that northern country, what it has meant in the development of the Flin Flon, you naturally long for the time when all the people on our farms will have the right to the use of electric washing machines and electrical appliances of all sorts in their homes. The two and a half billions suggested by the hon. member for Rosetown-Biggar (Mr. Cold-well) would make available an appropriation so that power lines could be put at the disposal of the people in all parts of rural Canada. But if we are to wait for the farmers to launch the programme they will be in the position where they will not know whether farm prices will fall to very low levels again. It is true we have 'been promised a floor under farm prices, but we are still waiting for details, and unless the administration is more generous in its treatment of farmers in the post-war period than in the years before the war, the farmers will look forward to falling prices of agricultural products and increasing prices of the products they buy.
One other chapter in this book should be mentioned before I get through, namely, the
section dealing with cooperative housing. The hon. member for Cape Breton South (Mr. Gillis) would be much better qualified to discuss this question than I, but members from Nova Scotia, I think, deserve a good deal of credit for the start made in that province in the field of cooperative housing. In 1932 legislation was passed that made available seventy-five per cent of the total cost involved in starting a cooperative housing project, and the staff at St. Francis Xavier college at Anti-gonish deserved most of the credit for selling to the farmers the importance of banding themselves together and working out a solution of the housing shortage. I find here that the costs of these projects are unbelievably low. One project involves monthly amortization payments of only $9.65, which includes interest, insurance and taxes.


Karl Kenneth Homuth: I do not want to interrupt, but would the hon. member give some idea-


Thomas Vien: The hon. gentleman's
time has expired.


Karl Kenneth Homuth: Let him go ahead. I
think he should clear up one question. What is the value of the house, and what does it contain?


Alexander Malcolm Nicholson: These houses have
been built-


Thomas Vien: If the house gives its
unanimous consent, the hon. member may continue.


Karl Kenneth Homuth: Can the hon. member
give us an idea of the value of the house and what it contains?


Alexander Malcolm Nicholson: These are eight-roomed family houses. I have visited them and they are very comfortable. They are built by the miners and would sell at from $3,000 to $4,000. They were built cooperatively in groups of twelve. The provincial government made the money available at 3i per cent over a twenty-year period, and as a result these miners have living quarters such as would rent at from forty and fifty dollars a month in Ottawa, for less than ten dollars a month.


Karl Kenneth Homuth: Have they all conveniences?


Thomas Vien: If the hon. gentleman has any questions to ask he must rise and address the Chair.


Karl Kenneth Homuth: I beg your pardon, Mr. Speaker.
The Budget-Mr. Bruce


Hon. H. A. BRUCE (Parkdale):: There is nothing more vital to the preservation of a democratic nation than the unswerving maintenance of the right of free speech in parliament. Anything that challenges that right is an invasion and a threat of the most dangerous kind to free institutions.
That Senator Bouchard, when he spoke in another place, was discussing a subject of very special importance to Canada, there should be no question. That it was his undoubted privilege and indeed his duty to [DOT]express his views is beyond debate. That he expressed those views in language befitting parliament there is also no room for debate.


Thomas Vien: Order. I understand the hon. gentleman is referring to a speech in the other house. That is out of order. He may not make reference to a debate that has taken place in the other house, for that is out of order in this debate.


Herbert Alexander Bruce: I am simply saying a word in defence of freedom of speech, and I think I am entitled to do so.


Thomas Vien: I was inquiring whether the hon. gentleman was referring to a speech made in the other chamber. If so, that is out of order. If he is making an argument for free speech generally then, of course, he is in order.


Herbert Alexander Bruce: I am making an argument for free speech and I am entitled to do so. Because this man did what he deemed to be his duty,

Mr. ST. LAURENT: I rise to a point of [DOT]order.


Herbert Alexander Bruce: -because he put his sentiments and arguments on record before the people of Canada, he is hurled from a high post in the business life of his country.
Mr. ST. LAURENT: Because the hon. gentleman represents the constituency he does represent, he cannot flout the rules of parliament and the ruling just given.


Herbert Alexander Bruce: The Minister of Justice would be in order if-
Mr. ST. LAURENT: The hon. member said that he was discussing freedom of speech and he continues by referring to some speech made by an hon. member of the other chamber. That is what Your Honour has just ruled1 to be out of order.


Karl Kenneth Homuth: The Minister of Justice did not have to refer to the hon. gentleman's [DOT]constituency, because we know what that means.


Thomas Vien: When the hon. member was speaking I thought he was referring to a speech in the other house, but he assured me-
Mr. ST. LAURENT: He certainly said so.


Thomas Vien: -that he was discussing the question of freedom of speech and! of course in that case I allowed him to proceeed. Exception is taken now by the Minister of Justice that what the hon. member was referring to was a speech made in another place and I again point out to the hon. member that this is out of order in this house.


Herbert Alexander Bruce: I am referring to that only as an indication that the right of freedom of speech has been deprived a member of parliament, and I think I am perfectly in order-


Thomas Vien: Order.


Herbert Alexander Bruce: -in continuing my remarks.


Thomas Vien: Order. What I have said is not the opinion of the Chair but is the rules of
the house. That standing order is 41, from which I quote:
No member shall speak disrespectfully of His Majesty, nor of any of the royal family; nor of the governor or person administering the government of Canada; nor use offensive words against either house, or against any member thereof. No member may reflect upon any vote of the house, except for the purpose of moving that such vote be rescinded.
I would refer the house to citation 293, subsection (b):
A member while speaking must not (b) refer to any debate in the senate, but he may refer to the official printed records of the upper house though they have not been formally communicated to the lower house.
The hon. gentleman is referring to a debate that took place in the other house and is therefore not in order according to the rules and the standing orders of our house.


Herbert Alexander Bruce: I presume I must abide by
your ruling, Mr. Speaker, but I think it is entirely incorrect to deny an hon. member the right to protest against the absence of freedom of speech in this or in the other house.


Some hon. MEMBERS:: Order.


Thomas Vien: The hon. member must not say that he is being deprived of any right in this house. That is a reflection and an implication that the Chair has not been extending to the hon. member the privileges of the house. All that I am doing is reading the rules of the house which I am bound to administer and with no personal reference to the hon. member. He must abide by the rules of the house.

The Budget-Mr. Bruce


Herbert Alexander Bruce: Mr. Speaker, I still maintain that I was referring to curtailment of the freedom of speech and that therefore I was perfectly within my rights as a member of this house.


Mr. McCANN:: With reference to whom?


Thomas Vien: Order. The hon. gentleman is referring to the curtailment of speech. He is entitled to state his views, but he must not, in referring to freedom of speech, refer to some other matter which has already taken place in the form of a debate in the other house.	[DOT]


Herbert Alexander Bruce: Mr. Speaker, may I just
quote an eminent Frenchman, Voltaire, who once said:
I disapprove of what you say, but I will defend to the death your right to say it.
I therefore wish only to have the same freedom in this house as they have in other parliaments of the world.


Ian Alistair Mackenzie: Order.


Gordon Graydon: You just keep quiet. It is the Speaker's job to keep order, not yours. We cannot hear the debate for your cries of "order".


Ian Alistair Mackenzie: You are the most frequent interrupter in the house.


Thomas Vien: I am quite sure the hon. member for Parkdale-


Ian Alistair Mackenzie: The leader of the opposition was not in the house when it happened.


Thomas Vien: I am quite sure the hon. member for Parkdale (Mr. Bruce) does not intend to convey by his words that I have refused him permission to exercise his privilege of free speech within this house, but that is the only inference I can draw from his remarks. I must ask the hon. member to dissociate himself from any such meaning.
If the hon. member for Parkdale does not hear me distinctly I wish some of the hon. members would convey to him what I have just said.


George Alexander Cruickshank: Withdraw what you said.


Karl Kenneth Homuth: Withdraw nothing; what
are you talking about?


Thomas Vien: The hon. member for
Parkdale does not hear me. I wish some of his colleagues would convey to him the
meaning of what I have already said to him, because I must ask that he should dissociate himself from any meaning that -I might take as a reflection upon the Chair in that I am preventing him from exercising his right of free speech.


Gordon Graydon: Mr. Speaker, I just came into the house-


Ian Alistair Mackenzie: Yes.


Thomas Vien: Order. I am sorry to interrupt the leader of the opposition (Mr. Graydon), but I have already taken the position that the hon. member must withdraw the implication or the meaning which his words convey, namely, that I was exercising the rights of the Chair to prevent him from the-right of free speech.


Gordon Graydon: Mr. Speaker, all that I
wanted to say was this-


Some hon. MEMBERS:: Order.


Thomas Vien: I am always willing indeed to hear the leader of the opposition,, but on this matter-


Gordon Graydon: I fail to see what this
is all about and why I cannot say a word on the matter-


Thomas Vien: In the meantime, the position so far as the Chair is concerned is-distinct. I ask the hon. member for Parkdale to withdraw the meaning he implied in his remarks.


Herbert Alexander Bruce: I had no intention of implying that Your Honour had been unfair. I meant only to say that when a man is punished for exercising his undoubted right of freedom of speech in this parliament, then I think it is time that somebody should speak up for him. I would have expected that the leader of this house, who has always been so careful about the privileges of parliament, would have said something in this regard before now, but nothing ha3 been said. That is pretty nearly all I had intended to 6ay. It does seem to me and to others that men who are outside this parliament should not have a right to punish members of either house for something they say in the house. We have had an illustration of that happening within recent days. It is against that method of interfering with freedom of speech that I wish to protest in the strongest terms possible, and it is only because of that that I have intervened in this debate this evening.
The Budget-Mr. Rose


Mr. FRED ROSE (Cartier):: la discussing the budget which according to the speech of the Minister of Finance (Mr. Ilsley), calls for an expenditure of over $5,000,000,000 in this the most decisive stage of the war, If am not going to delve into figures. I am not even going to spend very much time on the problem of the justice or the injustice of certain taxes. I wish to deal instead with the problem of national unity.
To me the destruction of fascism does not merely mean the destruction of fascism overseas. I believe that our men fighting overseas feel that while risking their lives there they would not want to come back home where they would find groups of fascists threatening Canadian democracy. I am not an alarmist, but I believe that at all times it is better to face issues than to resort to the ostrich policy.
In 1938, a few years before the name of Quisling became generally known throughout the world, I wrote a little pamphlet in which I warned about the danger of small fascist groupings, a danger that I said must be met or it might become serious in a critical period. In the pamphlet I used the following words:
There is no doubt that at present the various fascist movements constitute a very small minority among the great political movements in our country. But this is no reason why fascism in Canada should be ignored. Far better to turn the spotlight of truth and reason upon it right now and to take those measures at the outset of its growh, to make it impossible for fascism ever to grow into a force strong enough to challenge Canadian democracy.
There are certain people who believe that just because the foundations of fascism are being destroyed overseas, people with fascist ideology here will give up, cave in. I do not share that opinion. I would say that just because the cause of fascism is failing, because it is being defeated on various European battlefronts, fascist groups here, like nazism, will fight like a wounded beast. What makes this dangerous is the fact that we are in a decisive stage of the war. What makes this dangerous is that it divides the people, that it raises doubts in the minds of many people, that it weakens morale. That is why the issue must be faced.
What does Hitler want? He wants to see division. He may even fight a war of defence on all fronts. He hopes the war will drag out as long as possible, while his supporters throughout the various countries of the united nations will work up a campaign of disunity. This, he hopes, may bring about a patched-up peace. That sort of peace would not last. That is not what the people of Canada or of the united nations want.
Not long ago the United States Secretary of the Treasury, Henry Morgenthau Junior, gave the following warning:
Our enemy 'has one real secret weapon, the weapon of division. As disaster confronts him be will use that weapon cunningly. He will try to shatter unity we have achieved, will try to blunt and confuse our purposes and soften the defeat which he now knows he cannot escape. He will try to make our victory partial, rather than complete.
If we yield to such blandishments, if we allow doubt of one another to divide us, if we soften in our resolve to stamp out this hideous nazi curse-we shall have lost this war. Worse we shall have betrayed all those who suffered and bled upon the soil of Europe-the living and the dead alike.
I fully agree with that statement, and that is why I emphasize this problem of national and international unity, and wish to warn the people against division and confusion.
We shall have betrayed the living and the dead alike, if we stand aside and minimize the events which have taken place in Quebec in the past few weeks. There is, of course, the possibility that someone may try to say, "He is attacking the province of Quebec." I am not. I say that I have much more faith in the people of Quebec than many who would use that argument against me. I have said in the past, and I repeat to-night, that small dangerous cliques are carrying on that type of activity which is hurting the people of Quebec and Canadian morale.
I was coming down through the Laurentians in a car, and picked up a young airman who happened to be travelling on foot. He was an air gunner; in fact he looked more like an ail cadet, because he was so young. This boy had been stationed at Valleyfield when the fights took place. I had tears in my eyes after listening to his story. He said that these young boys, young air gunners, boys doing the most dangerous type of work, and who would be going overseas in a few weeks, did not dare to walk alone. They had to go in threes or fours.
Was anyone arrested? I have not heard of a single arrest. The young airman told me that many air force boys were beaten up very badly. In that same town of Valleyfield another gang attacked a meeting of the textile workers' union. That gang entered the hall where the meeting was being held, and smashed all the furniture. That was a union of people of Valleyfield. And still nothing was done; no arrests were made.
Then, in the city of Quebec a synagogue was set afire a couple of months ago. Prior to that fire a campaign was carried on by an intolerant clique within that city, against the rights of Jewish people to build their syna-

The Budget-Mr. Rose
gogue. In that campaign signatures were collected and meetings were held. The people who addressed the meeting were known. Among those who addressed meetings in that city was a fellow named Roch Poulin, a member of the young Laurentians. This same Roch Poulin was, only a few weeks later, at a meeting in Quebec which was to have been addressed by the leader of my party, Tim Buck, and roused the young boys to break up the gathering.
Anti-Semitism: suppression of free speech- they go hand in hand. But that is not all. A few days after the attack on the union hall in Valleyfield a well-known union organizer went out to Huntingdon. We was met by a group of people there who told him, "You are not going to hold a meeting "-desipite the fact that the textile plant at that place is organized within the union. He was prevented from holding the meeting, and there was no protection given him.
A tense situation is being created. One would not be surprised if the workers decided that if such things are going to occur they will organize defence groups of their own. That would be dangerous, and might lead to all sorts of trouble. Something drastic has to be done.
It is unfortunate that so many people who are responsible for these shameful activities call themselves nationalists-which they are not. They say that they work in the interests of the people of Quebec. I say that they do not. When they go out to smash up union meetings they are not working on behalf of the French-Canadian workers; they are working on behalf of Blair Gordon. When these people go out to tell workers that they must not belong to neutral unions, they are taking away from those workers weapons through the use of which those workers in many industries of Quebec have attained equality in wages with other provinces.
In some industries in Quebec, notably aircraft, shipbuilding and some others, the workers have attained equality. Who brought this about? Was it the group of people who rave about equality, or was it the trade union organizations of the workers? The trade union organizations of the workers did it.
These nationalists say that they are interested in the welfare of the people. But when there is talk about health insurance they say, " Oh, no, no; that is socialism. We do not want any health insurance. We do not want to interfere with the individual." What does that lead to? It leads to a situation under which the health of the people in Quebec is
bad, and it will continue to be bad if the people in that province follow the clique I have mentioned.
Let me give some figures. Per 100,000 of population 8Q-6 people in Quebec die yearly from tuberculosis, as compared with twenty-six in Ontario, or three times as many in Quebec as in Ontario. Here are some figures for some of the cities: Quebec city, 108-1; Chicoutimi, 143-4; Three Rivers, 216-6; Thet-ford Mines, 259-5, and Rimouski-shameful figure-542-2, or twenty times the rate for Ontario. The nationalists do not want any health scheme; they do not think the people of Quebec need it. The infant mortality figures give a similar picture. The rate per
1,000	live births for Canada as a whole in 1941 was 59-7 and that for Ontaro, 45-6. The rate for Chicoutimi was 95-5, and for Quebec city 107.
Those figures are altogether too high. We need more health schemes for our province rather than no health schemes simply because reactionaries say that it smacks of socialism, that it interferes with the individual. The so-called nationalists have opposed the idea of compulsory education. Doctor Paquette, Duplessis' lieutenant and former provincial secretary in charge of education in the province, in a discussion on compulsory education had the following to say:
When families are disorganized by the war, when young men are being conscripted for the army, is this time to conscript children for obligatory schooling ?
That argument underestimates the intelligence of the people of Quebec It was all right for Doctor Paquette to graduate as a doctor and do well in politics. If he has any children I am sure they are getting a fine education, but other children must not get an education because he considers it conscription for education.
Then again they oppose the idea of Quebec having anything to do with Canada or Canada having anything to do with the world. What will happen to the huge plants that have been built in the province and the tens of thousands of workers employed there if Canada is to isolate herself from the world?


Karl Kenneth Homuth: We never will.


Fred Rose: I am much more optimistic than the hon. member to my right. I have faith in the good sense of the people and know they will make sure they will get their jobs. The so-called nationalists may have a solution, back to the land. They are ready to suggest that the people dig stumps and starve, that they keep away from the cities.
'he Budget-Mr. Rose

But during the war the people have learned that they can do useful work; they have acquired skills, and they will not want to go. back to the land. The solution of isolationism is not the solution for the people of Quebec.
The supposed nationalist leaders are not working in the interests of the Quebec people. They use all sorts of demagogy to cover up their reactionary ideology, their pro-fascist ideology, and they care very little about tha people. What is their idea about the people? I find this in a declaration issued by a group known as the bloc universitaire and drafted on April 11, 1942. In that declaration this group called for a corporatist state in the province of Quebec where, according to their theory "not all men are born equal". That is the most reactionary sort of attitude to take. A small group of people will set themselves up in the castle and the people down below will work for them. They will have the brains; the others must know nothing.
I now want to go back a little into history. Since I have been in the house I have heard several hon. members go back into the past, to the years 1934, 1935, 1936 and 1937. I have done a little digging myself, and I should like to quote what has been said by some so-called nationalists and isolationists who are more interested in an axis victory than in the welfare of the people of Quebec. First I want to quote from a paper La Nation, issued by Paul Bouchard, a paper which was suppressed or which disappeared after the war broke out. He was quite close to all the so-called nationalist leaders in the province; in fact, in 1937 he appeared as a candidate in Montreal-St. Mary's riding and was sponsored by a number of organizations, one of which was headed by Andre Laurendeau, the present provincial leader of the Bloc Populaire. This Bouchard wrote quite a number of editorials in his paper. For instance, speaking about Spain, he said:
Before a strong and determined Spain, Gibraltar will be worthless. But the political role that a rich and powerful Spain can play is of much greater dimension. . . . She will take back her ascendancy over the peoples tied by blood and culture. We can't imagine the future role of Spain without thinking that outside of Brazil, the United States and Canada, all America is Spanish speaking. The next era will belong to the Spanish world.
Meaning they will take all of South America. He went on further to say:
May Franco be inspired by Mussolini's success-
I should like to see Bouchard's face to-day.
-and adapt Mussolini's forms to his country in order to transmit to Spain the same spirit of energy, of progress and solidarity which animates Italy, and then the immense reaction

started in Rome against Asiatic barbarism will arrive by way of Spain to the Latin shores of America.
That is 100 per cent fascism; that is 100 per cent fascist foreign policy. Not only did he speak about Spain but he advised France as follows:	[DOT]
Ah! If only France could at last find, under a monarchy or a national dictatorship, a great minister of foreign affairs to sell the British empire to Germany and Italy, in exchange for an alliance and French neutrality.
Those are treacherous words, but they did not stop him from running in 1942 as a candidate against the Minister of Justice (Mr. St. Laurent). What did he have to say about Canada? What did he have to say about a united Canada?
He said as follows:
Very well, I will be told; but what if Japan should want to invade British Columbia? Let us be clear that British Columbia is not the whole of Canada, and in the east, for what it costs us and What we get out of it, it means nothing to us.
He was willing to give British Columbia to Japan. These are the nationalists, the isolationists, but really internationalists in the sense of being fascists.
The so-called nationalists will not deny that they hold in the highest esteem the opinions of Henry Bourassa. Speaking in Montreal on October 8, 1941, Henry Bourassa said that the only force in Europe capable of bringing an end to Slav chaos was Germany.
Yes, Hitler tried to bring an end in his own way to what Henry Bourassa called Slav chaos. Hitler tried to murder millions of Slavs. But they refused to die, and are playing a magnificent role to-day and giving Hitler a sound beating.
Here is what Henry Bourassa said about Hitler:
Hitler is much more a product of democratic expression than are the governments of the United States, Canada and Britain. . . . One of the excellent sides of the (nazi) regime is that it has put an end to the scandalous abuses of capitalism.
When we think of the Krupps and Goering and their trusts we can see that this was but misrepresentation of the facts in order to deceive the people.
Speaking of the post-war world Henry Bourassa said:
If good sense is to prevail in the settlement of European affairs in the post-war world . . . I think that France of Petain, Spain of Franco, Portugal of Salazar, also Italy of Mussolini, will exercise a salutary influence for the world.
What a world that would be! Bourassa has since repeated the same sort of statement

The Budget-Mr. Rose
on a number of occasions. He still clings to these ideas and calls himself a nationalist! Like the nazis from whom they draw their inspiration the corporatists resort to antiSemitism as a means of doing their dirty work. It is unfortunate that such thoughts should creep into the speeches even of some members of this house. Not long ago I heard an hon. member speaking about the Aryans and the non-Aryans in this country. I did not know that we had any Aryans or non-Aryans in this country. I thought Hitler was the only one who was blessed with them.
Again on Thursday evening last the hon. member for Charlevoix-Saguenay (Mr. Dorion) said:
We are wondering whether or not we are engaged in this war for the sole purpose of saving or helping out the Jews all over the world.
That is Hitler's argument. Hitler has said that on a number of occasions-this is a Jewish war-and we had a revised version of that given us the other day by an hon. member of this house.
To-day's Montreal Gazette carries a very sad story. It told of 1,715,000 Jews who had been killed, exterminated in gas chambers in two camps in upper Silesia. If some escaped being murdered are we supposed to say to them: Keep out of this country. That is not humanity. That is cruelty. This question of refugees has been mixed up by certain political leaders with the problem of immigration. Certain papers are carrying cartoons on the subject. Here is a cartoon in Le Moraliste, Duplessis' sheet, showing Jews as did Streicher in the Sturmer. I think it is disgraceful. What would have happened to the great leaders of Canadian democracy, Papineau and Mackenzie, if they had been refused a refuge in the United States. The fate of the Acadians driven from their soil in the eighteenth century, a sad chapter in our Canadian history long remembered in our province, is to-day being repeated on a greater scale in a more murderous fashion, and to make an issue of it is to disregard decency and humanity. But these pseudo-nationalists do not go back to history. They find their own cruel solutions Here is an article in the official organ of Bloc Populaire, Le Bloc, of May 6, 1944. The article is headed "Canada, England's Garbage Dump," and this paper gives its full front page to names of some of the refugees allowed to come into this country and makes sure to specify beside each name "Juif," "Juif," "Juif" -"Jew," "Jew," "Jew"! I am not a Christian myself, but that is un-Christian as I understand Christianity.
I want to read what a great man, David Lloyd George, wrote about the Jews and Jew-baiting in 1923. He said:
Of all the bigotries that savage the human temper there is none so stupid as the antiSemitic. It has no basis in reason; it is not rooted in faith; it aspires to no ideal; it is just one of those dank and unwholesome weeds that grow in the morass of racial hatred. How utterly devoid of reason it is may be gathered from the fact that it is almost entirely confined to nations who worship Jewish prophets and apostles, revere the national literature of the Hebrews as the only inspired message delivered by the Diety to mankind, and whose only hope of salvation rests on the precepts and promises of the great teachers of Judah. Yet, in the sight of these fanatics the Jews of to-day can do nothing right. If they are rich they are birds of prey. If they are poor they are vermin. If they are in favour of a war, it is because they w-ant to exploit the bloody feuds of the Gentiles to their own profit. If they are anxious for peace, they are either instinctive cowards or traitors. If they give generously- and there are no more liberal givers than the Jews-they are doing it for some selfish purpose of their own. If they do not give-then what could one expect of a Jew but avarice? If labour is oppressed by great capital, the greed of the Jew is held responsible. If labour revolts against capital, the Jew is blamed for that ' also. If he lives in a strange land he must be persecuted and pogrommed out of it. If he wants to go back to his own, he must be prevented. Through the centuries in every land, whatever he does, or intends or fails to do, he has been pursued by the echo of the .brutal cry of the rabble of Jerusalem against the greatest of all Jews-Crucify Him!
These are very fine words, but what are we going to do about it? I suggest that the situation is serious enough to demand what I suggested in my maiden speech in this house, the appointment of a royal commission to go into this whole problem. But even that is not the whole story. There must be a reason why people in Quebec province will follow these elements, and that basis lies in certain inequalities which still exist. The government must find ways and means to meet the needs of the people, to do away with these inequalities, and the people will be only too happy for anything that is done for them to bring about that equality which they deserve. What is more I say that we have to encourage the trades unions as a powerful factor in the fight for democracy. We need a bold policy, because the problem of national unity is a serious one to-day, in the final phase of the war, and will be just as serious to-morrow, in the post-war period.


Mr. ROBERT RYAN (Three Rivers):: Mr. Speaker, I wish to offer my congratulations to the Minister of Finance (Mr. Ilsley) upon the able manner in which he presented the budget.
The Budget-Mr. Ryan

In this regard I think it would be proper for me to read into Hansard a number of paragraphs from an article entitled "Your Taxes Will Go Down", by Mr. Beardsley Rural, appearing in the Magazine Digest for June. Mr. Ruml, author of the pay-as-you-go income tax plan, is chairman of the federal reserve bank of New York. In this article he refers to federal budgets and taxation, and he says:
The federal (budget itself has an important influence on the value of our money. Whether the federal budget is inflationary or deflationary depends on the kind 'and amount of federal taxes. The real purpose of our federal taxes in the providing of revenue is to make sure that we have a budget that has the right kind of economic influence on the country.
The federal budget commits us every year to a set of expenditures, most of them necessary and desirable, and yet always with some waste, tradition and unreasonable sentiment.
We have federal taxes because we have national expenditures. If we had the expenditures without any taxes (at all, the budget would be extremely inflationary.
The reason we have federal taxes is so that the federal budget will have the right influence on the rest of our economy-that it will do its part in keeping employment and production high year after year. . . .
We have another good reason for expecting lower taxes-we do not want a deflationary federal budget when we have too much unemployment. We shall have to figure out how much employment and production we want as a "standard normal" and then make our federal tax programme so that income will balance outgo when we are at this desired normal level.
Such a tax programme will produce a budget surplus without changing the rates, provided that the outgo is kept steady and employment goes beyond what we think normal ought to be.
If employment and production go below our standard normal level, and if we keep our rates the same or even reduce them, then the effect . of the budget will be to add to public purchasing power and thus help raise employment and production to our normal level.
Expert estimates all agree on one point: with high employment after the war, national production and national income will actually be very much higher than ever before in our history.
For future taxes, this -means that either we shall have a high level of employment and production and can therefore have lower tax rates and a balanced budget, or we shall have lower tax rates to arrive at the employment and production level we feel is desirable.
Lower tax rates will help us achieve -high post-war employment, -but we must remember -that during the first year or so after hostilities cease, strong inflationary influences will be at work. They must be combated, and taxes will have to be used to help fight rising prices.
In this uncertain period we must proceed cautiously with tax reduction, even if the budget is balanced and possibly shows a surplus. But after the American economy is established, -we can use the tax programme to help provide the means of going where we want to go, in terms of high -production and high employment-and this will mean far lower tax rates than we have to-day.	.

I believe that the paragraphs which I have read apply very fully to the present budget of the Minister of Finance. It has been my opinion since I have been in this house that the minister, in bringing down his annual budgets, has always had in thought the welfare of the country and has built up his taxing system with that in mind.
There is a question in regard to the importance of control, and I should like in that regard to quote a statement made by Sir George Schuster, one of Britain's foremost business men. He says:
We must have some measure of government control over the nation's commerce after the war. If each business seeks to run its own affairs according to its own single interest, I -see little hope of avoiding state control at every point. The main problem is achieving a balance between the organizing power of the state and the driving force of the free individual.
That, I think, can be easily understood.
Further with reference to controls, let me quote the following statement of United States price administrator Chester Bowles:
That price control has saved -the people of the U.S.A. $67 million and that much would have been added to the' building of the military -machine had there been no price restrictions.
Comparisons of the cost of the two wars compiled by the O.P.A. research division show that $22 billion more has been saved consumers through price control over civilian goods and service. That saving alone amounts to $169 for each person for 1943, and that figure is growing every month.
It would be interesting to have an estimate of what Canada has saved by price control.
I wish to make one more quotation, which is taken from "Democracy Reborn", by Henry A. Wallace, Vice-President of the United States of America:
Dollar .principles are all right when they serve human principles and free enterprise must be maintained, -but the "Big Three", big -business, big agriculture and big labour must work -together for the general welfare and-above everything-adhere to the principle of complete utilization of all sources, all manpower, all skills in the service of the common man in his search for jobs.
On Friday we listened to an able speaker, the Prime Minister of New Zealand, who told us what he thought of the all-out war effort carried on by this government; that it was not only his opinion, but that of the most important men in the world to-day that Canada has done a wonderful job. There is no doubt about that. It has been well known by everybody except those who wish to criticize the government. On the subject of the war effort, the Prime Minister of New Zealand referred to man-power, war equipment and so forth. On Saturday morning,

The Budget-Mr. Ryan
while going on the train to Montreal, I clipped from the Ottawa Journal the following short article:
British Believe Canadians Best Street Fighters
British soldiers rate Canadians the best street fighters in Italy, Lt.-Col. Frederick L. Nicholls of Toronto, former commander in Italy of the Carleton and York regiment, a New Brunswick unit, said in an interview to-night.
He said the morale of the Canadian soldiers is "tops" and expressed belief it is high because of the fact all the Canadians overseas are volunteers.
"Therefore they're over there because they want to fight. They have a job to do and they want to clean it up."
Col. Nicholls was in command of the Carleton and Yorks along the Adriatic coast during the Cassino fighting. He has just returned to Canada to join the military training branch at defence headquarters.
I congratulate the government upon the new legislation and the new departments that are being created which will permit the government to carry out a post-war effort with the same success as they have carried on the all-out war effort since 1939.
It is laughable to listen to statements made that the Liberal government has stolen the programme of the Progressive Conservative or the Cooperative Commonwealth Federation party. The Prime Minister (Mr. Mackenzie King) informed this house at the first or second session of this parliament of his intentions with regard to social legislation that would be submitted for approval before this parliament was prorogued and, at the opening of this session, a definite plan of social reform was outlined in the speech from the throne.
I believe this government is working out the very best form of cooperation with the commercial banks and industry. The government's intention, I understand, is to cut out everything in the management of the banks and industry that has been found to have been a hindrance to the full development of Canada and the welfare of our people.
The Minister of Finance has advised us that understandings have been arrived at with the Bank of Canada and the commercial banks which will permit them to finance any development the government will find it necessary to undertake, and also place the banks in a position to finance all legitimate demands made on them by industry and commerce. He has also informed us that the government has complete control of currency and credit, and the system of banking to-day is not the same system that existed from 1929 to 1939. A new system has evolved since 1939.
The government is gradually weeding out what might be termed bad in banking and free enterprise systems without destroying what has been found good, which I would term constructive evolution.
I do not think this government will hesitate for one minute to take over any industry or to organize any industry that they decide should be established in the interests of the public, if they find private capital is not forthcoming or sufficient for the full development of such industry.
I would say to the leader of the C.C.F., in answer to his statement on page 4019 of Hansard, that the Canadian soldiers will return to the same beautiful and free Canada that they had left to fight the enemy and offer their blood so that we, who were left at home, would be able to continue to live in this glorious and free land known as Canada, but may I say to him that they will not return to Canada and find the same economic or social system that existed when they left their homes and loved ones.
Before I came into this house in 1940, I had arrived at certain conclusions of what I considered were the financial or economic reforms that should be made, and I am pleased to say that I am satisfied with what has been done up to the present. There are reforms that I believe should still be inaugurated to permit the government to stabilize employment and successfully carry out their social security programme.
However, the Minister of Finance and the Governor of the Bank of Canada are confident that the reforms which are being evolved will be sufficient, and I am convinced that if the government find out-later on that other changes in our monetary or economic system are necessary, they will not hesitate to make such changes as are necessary to make a success of post-war management and development. I have confidence in the government and very much faith in the future.
In conclusion, I would say that the people of Canada, yes, the people of the British empire, should thank God that we have had in this country such a man as Mackenzie King as Prime Minister with his able government to guide us through those terrible years of the war. Canada has done a great war job and has done it well. It is therefore my belief that Mackenzie King was a good peace-time, a good war-time and will be a good post-war Prime Minister.


Mr. LIONEL BERTRAND (Terrebonne):: Canada is one of the most beautiful countries in the world; I would even say the most beautiful. Hurled as a challenge against the
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The Budget-Mr. Bertrand (Terrebonne)
Americas, it is remarkable because of the vastness of its territory and the inexhaustible wealth of its resources. A young country whose prospects of development are unlimited, Canada is altogether immense and rich. Three oceans, filled with wealthy products, border its shores as a fairyland of lace; to the south, an imaginary boundary separates it from the most powerful of modern countries, the United States, with which it holds harmonious relations which could be set as an example to the whole world. Within, nine provinces, unequal as to size, diversified as to their particular character and products, share a territory often broken by immense rivers and lakes on which sail ocean-going ships which supplement two railway systems serving from ocean to ocean an agricultural and industrial population. So far, Canada has played an important role in world politics; to-morrow, it will be more important. But what has the future in store for us?
Wealth, resources and progress do not make a nation. Indeed, progress is a law of humanity. For generations, the present is the transition between a mediocre past and a better future. But a nation will subsist only if it can draw from itself a sufficient amount of reason to ward off causes of internal ruin or relaxation. Material forces, alone, are inefficient; the real power of a nation rests in its ideal, this invisible power which, by creating visible objects, shows the way to our souls. A nation is a soul; as Renan said, a nation, like an individual, is the convergence of a great sum of efforts, sacrifices and devotion. We shall come out of this war overburdened with the most gigantic financial effort in our history, struggling with an economy upset by the present conflict, and compelled to undergo numerous privations and sacrifices for many years to come. What class in our society will have suffered the most from the war? The one which has paid more income tax? No. The one whose easy pre-war way of living has been curtailed by rationing? No. The one upon whom war has imposed lower revenues and all kinds of annoyances? No. What class will be most affected by this war? It is our youth.
Youth will come out of this war wounded and angry. These words may surprise a few; nevertheless they are true. The foundation of a nation, youth is its ideal, and its progress also. It renovates generations; the youth of to-morrow will be what the youth of to-day formed it to be. Youth, therefore, becomes the cell which gives superiority to a nation, or renders it more decadent.
To turn our attention to youth is one of the present-day problems. I wish to speak

for the youth of my country, whatever be its language, its creed, or the province it lives in. I know youth, because yesterday I was still in its ranks; I know its ambitions, its tastes, its reactions, its fears, because I have been living with it for the last four years, and shared its lost hopes, its set-backs, its bitter feelings. To-day I rise to state this: War has killed our youth, morally and physically. As a reward for the sacrifice it rendered the national cause-or rather the universal cause- youth has the right to be heard, and the right to be understood.
I have been a member here for four years. What has been said about our youth except for such purposes as mobilization or war effort? I pay tribute to the courage of our youth. Its valour gave democracy thousands of soldiers, thousands of airmen, thousands of sailors, who, on all continents, in every sky and on the seven seas, are reaping glory for themselves, besides the glory falling back on their own country. But glory fades away- military glory like any other. No sooner will the signatures be dry on the peace treaty than nations, already oblivious of the horrors of the war, will become intoxicated with the delights of peace. When they look at the future, they will unknowingly forget those whose superhuman efforts and frightful ordeals drew a veil on the bloodiest tragedy of the world's history. The characteristic of human nature is to forget; but will youth ever forget?
Youth will come out of this war with deep wounds. How many, not yet thirty years old, have #ome out wounded, sick, physical ruins? From now until final victory, how many will emerge in the same physical conditions, unable or almost unable to earn their living, after giving in two years, even in one year, the maximum yield of their physical power? How many, who had built up a future at a period in life when ambition overcomes all obstacles to success, wqre compelled to drop everything when they were called to the colours and thus destroy with their own hands the projects their courage had built up? Broken careers, jeopardized futures, ruined lives, broken-up homes, lives wilting away before full bloom; these are the actual sights. Let them start over again, one might say. This is easy to say. Easy for those whose parents are wealthy, have established industries or financial influences: But what about the others who are more numerous? I know what it means to make a success of your life when you have no influence and when your way is strewn with obstacles which the ambitions of the powerful render it all the more difficult to surmount.

The Budget-Mr. Bertrand (Terrebonne)
I have known that personally. When it comes back from the war, our youth, after waging military battles, will have to wage social fights. Will it be able to regain the lost ground? Youth does not lack ideal; its ideal, propped, developed and fostered by its elders and its government, would become the faith which moves mountains. On the other hand, if we neglect youth, will it be capable, without help, of facing the hard struggles of the future? Will it be able to create a home and believe in happiness if, when it attempts to make its way through a mode of life more difficult than ever, this youth is not convinced that it still has retained its place under the sun? If the powers of the day disregard it altogether, will the youth that withstood the brunt of this war be able to come back to the homes it had temporarily left with the same bright hopes it had formerly nourished? Will it ever be able to dismiss from its mind the thought that in twenty or twenty-five years, through the stupid ambitions of men, the children it will bring forth in this world may again become the new victims of war and of all its miseries? Will youth be able to settle down to work if it lacks an ideal? Will it be able to create one if its soul remains downhearted? Discouragement leads to disgust; and disgust unavoidably opens the way to chaos.
Youth will also be angry when it comes out of this war. To a greater extent than any other class of society, laws will have affected it. It will have borne the weight of the mobilization act; the intricacies of selective service, rendered unrelenting throughout a series of sinister improvements, transformed the youth into an object to be handled, and this is a very serious error for democracy. When youth belonged to a category callable to the colours, it was automatically refused any position. After weeks of moral tossing around, it was compelled to enlist. For those who were too young to be called up, there were still no jobs. Instead of acquiring this happpy mentality resulting from work honestly secured, they are more or less compelled to earn their living through means which are not always commendable. Neglected, paralysed, baffled, turned down, dismissed, banned, hunted down, youth has become panic-stricken. Instead of breathing the pure atmosphere of the nation, it has absorbed, day after day, vexations-a poison which directly breeds dissatisfaction.
Will it be surprising if youth comes out of this war angry? Angry against what? Against everything. Angry against whom? Against everyone. First of all, against the authorities. Against the arrogance of its superior officers in the army. Against the insolence of the bureaucrats. Against capitalism-the shady kind.-which has been taking advantage of its sacrifices and sufferings. It is said that to-morrow will see the most considerable evolution of history. I believe it. But if this evolution does not give those who have suffered the benefits of their devotion, I may say this: add one letter to this magical word "evolution" and you have the worst of all human evils: "revolution".
Some will smile at my fears. I know I am not mistaken. Youth demands back, for to-morrow, its just and recognized place in society. It says: "You are preparing plans of social security; but, in those projects, have you thought of me who waged this war or who has suffered from this war?" Youth says: "You are planning wide material projects which will add to the assets of the nation and supply work for everyone; but did you think of reserving a place for me, the best asset of the country?" It says: "Progress would connect the world with airlines in which Canada will be an important link; did you think of me, the indispensable link to the continuation of life in this country?" It says: "You vote estimates to engrave in marble the heroic deeds and the known heroes of this war; did you think of me, the obscure hero of the war who, to-morrow, will still be the obscure labourer in the renovation of the country?" It says: "You are talking about peace; you are studying measures which will secure it; I want peace, because more than any other class of society, I hate and curse war. You want the Atlantic charter to be the foundation of a new order of justice and human intelligence; are you aware that peace throughout the world rests on the motion of peace which every nation cultivates within its own boundaries? Shall we have peace if the rights of everyone are not recognized in this country, if my own rights are ignored?
Youth says: "You are willing to assist other nations by throwing your doors open to immigration, by appealing to the great laws of humanity; have you the right to do so; have you the right to even think of doing it before I, who bore the brunt of the war, who suffered from the war, have found in this country, which is mv own, the work, security and happiness to which I am entitled?"
Youth says: "You have voted billions to help Great Britain and the united nations finance their war effort; you have voted fantastic amounts to create instruments of war which I have handled; you have voted very large sums of money to set up a series of commissions, a few of which were severely condemned after leading the unfair life of parasites; shall I not be entitled to the con-

4470	COMMONS
The Budget-Mr. Bertrand (Terrebonne)
sideration of my country when I shall be called upon to-morrow, to bear the crushing burden of these debts, to sacrifice myself and my own people in order to repay them?"
The youth of my country has the right to demand the right of being heard, and the right of being understood. Therefore, I wish to state that if every economic, financial, physical and agricultural domain is represented in this parliament by a department which animates, supports and develops it, why should youth, the very soul of all the domains of human activity, be not also represented by its own department? I demand tonight the setting up of a federal department of youth.
Various departments were set up to finance or prosecute the war; departments were created to solve post-war problems. At this momentous hour we are about to face, an hour which is rightly dreaded by economists, why should the government not institute the department which, in my opinion, is the most important for the salvation of the country: the department of youth. This department would render such important services that they would have results and repercussions in every cell of the social organism. If you do not create it, you are hampering the welfare of the country. If you create it, you will make the nation strong and solid. One may answer that such a step comes within the jurisdiction of the provinces and that the federal government does not wish to encroach upon the rights of the provinces. This is a very easy and convenient excuse. The Department of National War Services was set up, and it mobilized the youth. The Department of National Defence was given a larger strength, and youth filled it up. Selective service was instituted, and youth was the first to submit to its requirements. In selective service, a mobilization section was set up, and again youth was its first and perpetual victim. Therefore, if it has borne the stiffness of our laws to a greater extent than any other class of society, it has a vested right in requesting and demanding the introduction of legislation, acceptable both by itself and by the provinces, which legislation would be the official and national recognition of its devotion and of its social helpfulness.
How can we assist youth? Young men who have been to war deserve special attention. Indeed, when the war is over, numerous laws will be enacted to assist those who have contributed to victory. But those who will apply these laws should not neglect or deal unjustly with these young people merely because they are young; the youth who fought this war and who will be its victims, who entered in

it voluntarily or through the force of circumstances, will set forth its rightful requests, even if it has to resort to arbitrary means. Is it excessive to ask that youth that has fought this war be given an organism whose duty will be, when needs arise, to protect its rightful claims, or to facilitate its obtaining a just preference in employment.
There is also the youth under twenty, at eighteen already much older than its age, since it is by statute sent to the army before it is physically developed and ready to fight for its living. There are all those who are growing up, already restless at sixteen, and all those who have not yet reached sixteen, and who are acquiring deep in their hearts, when their elders relate their experiences, feelings of contempt and sour memories which they will undoubtedly retain, unless such feelings are dispelled.


Karl Kenneth Homuth: I rise to a point of order. I dislike doing this very much, but hon. members have been warned against reading their speeches. The hon. member for Terrebonne is reading his speech, word for word. I object to it, and I do not think it should be allowed.


James Layton Ralston: The hon. member for
York-Sunbury (Mr. Hanson) read his speech.


Karl Kenneth Homuth: You should have checked him up, then.


James Layton Ralston: Why did you not check him up?


Karl Kenneth Homuth: Because it is your dfity to do it.


James Layton Ralston: I was not objecting to it.


Karl Kenneth Homuth: I am.


James Layton Ralston: Why did you not object to the hon. member for York-Sunbury, then?


Ian Alistair Mackenzie: Charity begins at home.


Lionel Bertrand: This coming youth, the government can assist it in many ways:
(a)	By setting up, in every district where an unemployment insurance office is located, a section specially devoted to the placement of youth.
(b)	By expanding without restrictions the professional training programme, which recently replaced the war-time emergency training programme; by giving substantial grants to provinces so that arts and crafts schools can be accessible, not only to students from towns and cities, but also to those from rural municipalities of the least importance.

The Budget-Mr. Bertrand (Terrebonne)
(c)	By instituting in every county, with the cooperation of the provinces, scholarships which would be available to children in lower and industrial classes, and would help them reaching technical schools or other secondary or superior schools.
(d)	By granting generous subsidies, through the medium of provinces, to associations interested in youth movements, like parish circles, for instance, in order to develop among young people a taste for reading by facilitating the use of public libraries, or in order to develop its physical health by means of sane and vigorous sports.
(e)	By building in cities and towns, and even in municipalities of any importance, public parks where younger people could find playgrounds, swimming pools and amusements.
(f)	Bjr enlarging the scope of the national film board so as to give, even in remote municipalities, numerous free movies on matters of national interest or of educational character.
(g)	By giving grants to associations interested in promoting artistic tastes among youth -such as Les Amis de 1'Art, in Montreal-in order that these associations, with the cooperation of the provinces, may extend their activities, and that youth may follow for a nominal charge artistic lectures and teachings-the best sources of art and ideal.
(h)	By erecting parish halls.
(i)	By creating bureaux dealing with statistics and information with branches in every province, and available to students as well as to young labourers.
(j)	By creating an organism entrusted with setting up a list and prohibiting the entrance into Canada of this abundance of United States magazines which glorify vice and praise robbery and murder. This literature is ridiculous, useless, immoral and against the welfare of the nation; it will turn a young man, even before he is twenty, into a loafer, if not into a thief or a murderer.
In a word, by setting up a body capable of securing young people their proper share of employment, and of applying measures calculated to maintain the physical standards of youth, its moral health, its sense of responsibility and its love of life.
Will this suggestion be received1 in this parliament? Will it be accepted in principle only, and gradually set aside by the stream of new problems which are constantly assailing public administration? Will it be heard by youth which will learn through newspapers and radio that some one spoke on their behalf before the whole nation? I do not know. Nevertheless, I am convinced that youth must
be consulted on the course of our reconstruction projects. We shall have to reconstruct, and reconstruct in every domain, and with the live powers of the nation. In these times when the most fantastic doctrines take shape and are spread abroad, when dealers in happiness offer at every cross-road elixirs of unlimited prosperity, when the most subversive ideas hide under disguise in order to win approval and sympathizers, measures of national defence become necessary. Only through this national1 defence will Canada be able to live in justice, progress and peace. Capitalism must acquire certain virtues and forego certain vices; in times undergoing scientific evolution due to the influence of war, governments must endeavour to observe the smallest details which make up democracy, and also attempt to promote every idea which will assure its-solidity and full development.
Social security applied in all domains; the glorification of labour; the improvement of the fate of lower and industrial classes, and ownership made accessible to everyone; assistance to families; the spreading of education;: the preaching of better understanding of public-health; repressing the abuses of capitalism; assistance to private enterprise; the expansion, of small industries; freeing trade and commerce from paralyzing restrictions; assistance to agriculture; a better and broader system of colonization; the safeguarding and development of national resources; the respect due to morals; doing away with social sores; in all domains of human activity, a betterment brought about by just, sane and happy laws inspired by love which Christ preached to mankind.
Mr. SPEAKER; I must ask the hon. member to observe the rule which I have endeavoured to enforce to-day. I thought the hon. gentleman was making a statement, but apparently he is reading his speech.


Lionel Bertrand: It will take me only a minute to complete my speech.
Some hon. MEMBERS; Go on.


Lionel Bertrand: These are as many domains to which democracy may spread its numerous activities without falling into depressing and guilty socialism, as many domains which it may animate at a much' lower cost than what we will spend on this war.. General prosperity is the basis of the individual welfare. The individual welfare assures peace to a nation. Therefore, all classes of society should be invited to cooperate in the task of reconstruction and in balancing our economy upset by the war; youth especially,
The Budget-Mr. Kuhl

since no other class can better defend our social structure. Let us give ideal to youth. Le.t us help it and give it momentum. Youth is the foundation of the nation. Let us secure its welfare and consequently its happiness. I want the youth of my country to be happy and prosperous. If it is happy and prosperous the whole nation will also be happy and prosperous.


Mr. W. F. KUHL (Jasper-Edson):: That is an appropriate remark. Hence I consider that I am not in the least presumptuous in attempting to discuss a matter of constitutional relationships in Canada. Certainly the elementary principles which govern these relationships should be familiar to everyone. There is not a citizen but should know by what authority we in Canada are governed.
In the few moments yet at my disposal I shall endeavour to present what I regard as a reasonable and logical argument, and to support the statements I make with such evidence from recognized authorities as it is possible to present on this occasion. To those who are inclined to disagree with the statements I make, I say, if they disagree let them counter my arguments with arguments which are reasoned and logical. In times past when I have presented this case I have been subjected to a good deal of scoffing and jeers ;and ridicule. Such conduct is usually the mark of defeat. Personal abuse and ridicule are not an answer to reason and logic.
In an endeavour to account for the anomalies to which I have referred, and in order to suggest what I think is the solution to remove these anomalies, I am going to endeavour to prove this proposition: that, since the enactment of the statute of Westminster, on December 11, 1931, all power to govern in Canada has resided with the provinces of Canada, and that all power legally remains there until such time as the provinces sign an agreement and ratify a constitution whereby they may delegate such powers as they wish to a central government of their own creation.
To support this proposition a few facts of history must, I think, be adduced. The first point I wish to make is that when the fathers of so-called confederation first thought of confederation they did actually conceive of a federal union proper; it was the aim and the ambition of the fathers of so-called confederation actually to consummate a federal union in Canada. That is the view I hold as a *consequence of the history I have been able to examine.
One of the things which indicates this to me is the preamble of the Quebec resolutions, which reads as follows:
The best interests and present and future prosperity of British North America will be promoted by a federal union under the crown.
The term "federal union" is used.
Then again, there is clause 70 of the Quebec resolutions, which indicates that whatever agreement was arrived at would be submitted 
to the provinces and to the people. The clause reads as follows:
The sanction of the imperial and local parliaments shall be sought for the union of the provinces on the principles adopted by the conference.
In the draft British North America Act which was prepared by the fathers of confederation we find a repealing clause which certainly indicates that this draft bill provided for a proper federal union. It reads as follows:
From and after the union, all acts and parts of acts passed by the parliament of Great Britain, the parliament of the United Kingdom of Great Britain and Ireland, the legislature of Upper Canada, the legislature of Lower Canada, the legislature of Canada, the legislature of Nova Scotia, the legislature of New Brunswick, which are repugnant to or inconsistent with the provisions of this act shall be and the same are hereby repealed.
That certainly indicates, I believe, that what the fathers of confederation were actually aiming at was a federal union proper. I believe they were well aware of what was involved in creating a proper federal union, for at that time there was a civil war raging between the federal union and the confederacy in the United States.
I assert that, from the history which I have examined, neither the spirit nor the terms of the Quebec resolutions were carried out in the British North America Act. There is no evidence which I have been able to discover to indicate that the preamble which we find on the British North America Act in printed copies here to-day was ever mentioned either in the House of Lords or the House of Commons. The preamble which appears on the present British North America Act refers to Canada as nothing but a united colony, whereas the Canadian preamble intended that Canada should be a federal union. When the preamble was discussed in the House of Lords, Lordi Carnarvon, who introduced the bill on February 19, 1867, used these words, as reported at page 559 of the British Hansard:
The bill opens by reciting the desire of the several provinces to be federally united.
And again we find Lord Campbell, speaking on the bill, on February 26, making this statement, at page 1012-13 of the British Hansard:
The bill is founded, I believe, on what is termed the Quebec scheme of 1864.	. . . Our
lights indeed may be imperfect upon this part of the subject, and I will not dwell upon it. But one thing is clear: The preamble of the resolution comes before us in full and perfect authenticity. *
I think it is quite evident from the quotations I have read that the preamble which was discussed was the preamble of the Quebec resolutions, but the preamble we find in the

The Budget-Mr. Kuhl
printed copies of the British North America Act to-day was not even mentioned. I spent some considerable time on one previous occasion indicating the consequences of such a position, but I have not the time to go into that to-night.
Another point of significance in the passing of the British North America Act at that time is the undue haste with which it was passed. The second reading was called for, but the bill was not even printed. It was given third reading on February 26 in the House of Lords, and the second reading was called for on February 28 in the House of Commons without the bill having been printed.


Gordon Graydon: There are more modern precedents than that.


Walter Frederick Kuhl: No doubt there are, but I would point out that this is a matter which cannot be treated lightly. Sir John A. Macdonald did not approve this. When the draft bills were being considered at the London conference, as I pointed out in this house once before-and I have a copy of the draft bill at the London conference which Sir John Macdonald had and which we find quite disfigured-he indicated his disapproval of the words that referred to making Canada a united colony, and he substitutes the words, "federal union". I could elaborate on that much more extensively, but time will not permit my doing so. I conclude that aspect by saying that although the fathers of confederation did intend to create a federal union in Canada, for reasons which I have not the time this evening to discuss, they were not able to consummate the federal union they desired. All they accomplished or were permitted to set up in Canada at that time was a united colony, and to substantiate that statement I will quote from Sir John Bourinot in the book "In Canada Under British Rule" at page 215:
It is interesting to know that in the original draft of the bill the united provinces were called the Kingdom of Canada, tout when it came eventually before parliament, they were designated as "the Dominion of Canada", and the writer had it from Sir John A. Macdonald himself that this amendment did not emanate from the colonial delegates but from the imperial minister.
Another point which substantiates that is the clause in the Interpretations Act, section 18, paragraph 3, which defines the term "dominion". We use the terms "dominion" and "federal" interchangeably, but they are not one and the same thing. The Interpretations Act was passed expressly to define the term "dominion", because we find this:
The expression "colony" shall mean any of Her Majesty's dominions exclusive of the British islands and of British India; and where parts
of such dominions are under both a central legislature and local legislatures, all parts under the central legislature shall, for the purpose of this definition, be deemed to be one colony.
It is therefore clear from this that Canada's position after the enactment of the British North America Act was that of a colony under the term "dominion". I had intended to point out the differences constitutionally that existed before the British North America Act and immediately after, but my time will not permit. The fact is that through the British North America Act Canada was demoted from a self-governing country to a colony. All the powers of self-government in Canada were removed and most of the power was personally in the governor general as agent of the imperial parliament. Section 11 gives him power to summon, appoint and remove from time to time members of the privy council for Canada. Section 14 gives him the power to appoint a commission to the Yukon accountable only to himself, and under section 24 he appoints the senate, while under sections 55, 56 and 57 the power of disallowance over dominion legislation is reposed in the governor general and under section 90 the power of disallowance over provincial legislation, and above all, prior to the British North America Act, the Colonial Laws Validity Act of June 29, 1865, gave the governor general the right to disallow any legislation by simply publishing the fact in a newspaper. Section 6 of the Colonial Laws Validity Act, the effect of which incidentally was removed by the Statute of Westminster, declares:
Any proclamation purported to be published by the authority of the governor, circulating in any newspaper in the colonies, signifying Her Majesty's assent to any such colonial law, or Her Majesty's disallowance of any such reserved bill as aforesaid, shall be prima facie evidence of such disallowance or assent.
I see it is eleven o'clock, Mr. Speaker, and I have five minutes left. If it is agreeable to hon. members I do not mind concluding, but I should like to have my five minutes. I take it that the house is agreeable. I was attempting to establish that Canada did not become a federal union in 1867 but rather was demoted to the position of a united colony with the supreme control of power still residing in the imperial parliament through their agent the governor general in Canada.
Just a quotation or two from the special committee on the British North America Act of 1935 in Canada. A federal union is defined by Beauvier in his law dictionary as follows:
It consists of a union or confederation of sovereign states, created either by treaty or by mutual adoption of a federal constitution.
The Budget-Mr. Kuhl

That implies that a treaty or agreement must be signed by the appropriate authorities and ratified. As to whether the British North America Act was an agreement or a treaty, here is some evidence. Doctor Ollivier at page 54 of the special committee, says:
_ To revert to the statement that confederation is a contract, this proposition contains a number of fallacies: First, confederation so-called is not a confederation; and second, it is not a contract.
Again, Doctor W. P. M. Kennedy, at page 69, says:
I approach this problem as a practical problem and I think we 'have got to get away from the idea that the British North America Act is a contract or a treaty. I do not want to go into that, but it is true neither in history nor in law.
At page 115 we find Mr. Norman Rogers giving evidence and he is questioned by Mr. Cowan:
You do not subscribe to the belief that this was a pact or contract?
. Mr. Rogers:	I am thoroughly convinced it
is not either in the historical or the legal sense.
Our own Clerk, Doctor Beauchesne, at page 125, said:
It is quite true that if we applied to the British North America Act the principles followed in the interpretation of statutes, it is not a compact between provinces; it is an act of parliament, which does not even embody all the resolutions passed in Canada and in London prior to its_ passage in the British parliament where certain clauses that had not been recommended by the Canadian provinces were added.
_ I think that is sufficient evidence to substantiate my claim.
I was going to draw a comparison between the federal constitution of Australia and what we have in Canada, but time does not permit me to do so. Therefore I wish to conclude by asserting that we continued from 1867 to December 11, 1931, as a united colony. That situation was changed on December 11, 1931, by the statute of Westminster; whereas we were not self-governing we became selfgoverning. But what was the position? The provinces were not able to federate in 1867. They were not permitted. They would have to draft their own agreement, draft their own constitution and submit it to the people for ratification. They did not do that in 1867. The privilege to federate was therefore a future privilege and therefore, before the provinces could federate, they must become free, independent and sovereign. By section 7, paragraph 2, of the statute of Westminster the provinces of Canada were made sovereign, free and independent in order that they might consummate a federal union which they had wished to consummate in 1867 but were not

permitted to do so. Since December 11, 1931, the provinces have not acted on their newly acquired status. There has been no agreement signed between the provinces since 1931. There has been no constitution adopted; the people have not been consulted on anything. There is not a scratch of a pen in Canada showing where there is any agreement between any of the provinces constituting anything.
I think the most important aspect of this whole situation is the sovereignty of the individual citizens of Canada which is involved. John Locke has this to say on the question of individual sovereignty:
_ Men being by nature all free, equal and independent, no one can be put out of this estate and subjected to the power of another without his own consent. The only way whereby anyone divests himself of his natural liberty and puts on the bonds of civil society is by agreeing with other men to join and unite into a community.
I wish to assert, Mr. Speaker, on that basis that the people of Canada did not have the privilege in 1S67 to agree to anything and they have not done so since 1931. I contend as a citizen of this country that I have been put out of my state of independence without my consent, and that applies to every citizen of Canada. I demand, therefore, that proper steps be taken in the Dominion of Canada to establish a constitutional position which is in harmony with our status.
If the house will bear with me these are my last words. What is the starting point? This brings me back to some more evidence given to the special committee on the British North America Act in 1935. At page 116 Mr. Cowan was questioning Mr. Norman Rogers and he said this:
Mr. Cowan: You get back to this: your start is another interprovineial conference?
Mr. Rogers:	I am afraid it is. I see no
feasible alternative.
Hon. Mr. Lapointe:	There is no doubt
[DOT]about it.
Then we have the evidence of Doctor Skelton at page 42 which is as follows:
No other country in the world looks to the parliament of another country for the shaping of its constitution. This solution would only be supported if we believe that Canadians are the only people so incompetent that they cannot work out a solution of their constitutional problem, and so biased that they alone among the peoples of the world cannot be trusted to deal fairly with the various domestic interests concerned.
On a previous occasion in this house I quoted Doctor Beauchesne's suggestions as to how to overcome the situation which exists in Canada, and if the house will permit me I should like to give the quotation at this time. Doctor Beauchesne had this to say, and with this I shall close:

General de Gaulle
The Statute of Westminster has altered our status. . . . What we want is a new constitution.	.
The new constitution must leave nobody with a grievance. A spirit of conciliation should predominate. For these reasons, the task must be entrusted to an independent body in which all the elements of the country will be represented. I want the assembly to sit in a city in the west. It would not be necessary for a delegate to be a member of parliament or of a provincial legislature. I would suggest that the assembly do not sit in Ottawa, in order that it may not have the appearance of being dominated or even influenced by the dominion power; and, as the western provinces are of such paramount importance in the country, I suggest the best city for the representatives to gather in would be in Winnipeg.
Whether our country should be changed from a dominion to a kingdom is also a subject which might be discussed. I would suggest that the country could be called "The Federated States of Canada." There have been many disputes about provincial rights since 1867 and it seems certain that when a new constitution is drawn up the distribution of federal and provincial powers will have to be modified.
I have presented what I consider is a reasoned and logical argument. It is a subject which cannot be discussed properly in the short period1 of forty minutes. I take this thing very seriously. I think the time is long past due when we the people of Canada should do something about this serious situation. I believe the statements I have made warrant a reply on the part of some one of the government, either the Prime Minister (Mr. Mackenzie King), the Minister of Justice (Mr. St. Laurent) or some other spokesman for the government. I think they also warrant a statement on the part of the provincial premiers of this country and I shall await their remarks and observe what attitude they take.
On motion of Mr. Homuth the debate was adjourned.


[Stage Direction]
It being eight minutes after eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, July 4, 1944