1944-06-29

Mr. SPEAKER:: I have the honour to
inform the house that I have received the following communication:
Ottawa, 28th June, 1944.
Sir:-I have the honour to inform you that the Hon. Thibaudeau Rinfret, Chief Justice of Canada, acting as deputy of His Excellency the Governor General, will proceed to the Senate chamber on Friday, the 30th June, at 5.50 p.m., for the purpose of giving the royal assent to certain bills.
I have the honour to be,
Sir,
Your obedient servant,
F. L. C. Pereira, Assistant Secretary to the Governor General.



STANDING ORDERS

[Stage Direction]
Second and third reports of standing committee on standing orders.-Mr. Golding.

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

Mr. BLACK (Cumberland):: 1.	How many, (a) carloads; (b) dozens of empty beer bottles have been shipped out of Nova Scotia under administrator's order No. A-505 of the wartime prices and trade board since it became effective December 11, 1942, stating the places from which such shipments were made?
2.	By whom were such shipments made?
3.	Has the government or the wartime prices and trade board given consideration to the cancellation of order No. A-505, and if so, what decision has been arrived at?
4.	What is the present necessity for continuance in effect of such order?


Mr. ABBOTT:: 1 and 2.	(b)
Dozens of
(a)	empty
Shipped by	Carloads	beer
bottles
Gonsumer Bottle Company..	161	40,250Provincial Bottle Exchange..	272	108,2503.	Since there has been no improvement in the glass situation, the cancellation of order No. A-505 is not under consideration at the present time.

4.	There are no beer bottles manufactured in the maritime provinces. Under the provisions of order No. A-505, the local brewers are assured of their requirements of used beer, bottles as they become available within the province, and the balance of bottles remaining after the local requirements have been met, are shipped under permit as nearly as possible on an equitable distribution basis to those breweries in Ontario and Quebec who deliver beer to the maritimes, so that they may be provided with empty bottles with which to fill the quotas of beer set for them by the liquor commissioners of the maritimes.


MOBILIZATION ACT-ENLISTMENTS, DISCHARGES, ETC.
Mr. DIEFENBAKER:: 1.	How many men during each of the months of March, April and May of 1944 have, (a) enlisted for active service in the army; (b) been enrolled under the National Resources Mobilization Act?
2.	During each of the said months, how many men have been discharged from the army?


Mr. MACDONALD (Halifax):: 1.	(a) March-According to documents received at the records office up to 22 June, 1944: 3,397 including 389 men previously enrolled as
N.R.M.A. soldiers.
April-According to documents received at the records office up to 22 June, 1944: 4,302 including 1,429 men previously enrolled as N.R.M.A. soldiers.
May-Estimated: 3,800 including 700 men previously enrolled as N.R.M.A. soldiers.
(b)	March-According to documents received at the records office up to 22 June, 1944: 1,838.
April-According to documents received at the records office up to 22 June, 1944: 1,552.
May-Estimated:	2,000.
2.	March-According to documents received at the records office up to 22 June, 1944: 5,634.
April-According to documents received at the records office up to 22 June, 1944: 5,111.
May-Estimated:	5,000.
Note.-Figures for the month of May have been estimated to allow for the proportion of documents pertaining to that month still outstanding at the 22 June, 1944.


MOBILIZATION ACT-ABSENTEES AND DESERTERS
Mr. DIEFENBAKER:: 1.	How many absentees and deserters, by provinces or military districts, have been located since the 1st of May, 1944, as a result of the sending out of letters to the next of kin seeking information regarding the men involved?
2.	How many letters were sent out, and in how many cases were replies received?

Questions


Mr. MACDONALD (Halifax):: *		
1 and 2.	Letters	Replies	No. ofMilitary district or command	despatched	received	men locatedOntario-	Borden	.. Nil	No next-of-km residing in area	NilPetawawa 	.. 30	7	NilM.D.l-See note (a) below	.. Nil	Nil	NilM.D.2 	.. 70	7	1M.D.3-See note (b) below	.. 40	5	1Quebec-*	M.D.4 	.. 2,727	355	147M.D. 5 	.. 1,348	300	130Nova Scotia and Prince Edward Island-	M.D. 6 	.. 160	112	96New Brunswick-	M.D. 7 	.. 1,668	83	87Manitoba-	" M.D. 10-See note (c) below	.. 593	147	66British Columbia-[DOT]	Pacific Command 	.. 180	41	15
Saskatchewan

			
M.D. 12 		.. 250	93	100
Alberta-			
M.D. 13 	.. 438	190	135-	-	-Totals 	.. 7,504	1,340	778 See note (d) below.
Note
(a)	The details respecting each absentee or deserter in M.D. 1 are being checked. Pending such check no letters have been dispatched from that district.
(b)	A small part of northwestern Quebec is in M.D. 3.
(c)	A small part of northwestern Ontario is in M.D. 10.
(d)	Not included in this number are a number of men who have surrendered since the sending out of these letters. It is not know whether they did so as a result of the letters.


* DEPARTMENT OF LABOUR-R. M. CHARPENTIER
Mr. DORION:: 1.	Since January 1, 1940, has R. M. Charpen-tier been in the employ of the Department of Labour, or rendered any services to the said department, or received any money from the said department for any reason?
2.	If so, (a) when; (b) under what conditions; (c) what was his remuneration?
Mr. MARTIN;
1.	No.
2.	Answered by No. 1.


VETERANS GUARD-RESERVE UNITS
[Stage Direction]
Mr. ROSS (Souris);
1.	Are reserve units of the veterans guard being disbanded?
2.	If so, as at what date, and for what reasons?
Mr. MACDONALD (Halifax);
1. Yes. Fifteen reserve companies of the veterans guard have been disbanded.
2. They were disbanded effective 15 May, 1944. The reason for the disbandment of these units was that they were either dormant or operating at low strength.

Mr. COLDWELL:: 1.	Has the government granted priorities to
the Eddy Match Company for the construction and/or provisions of plant, and/or Tepairs at Pembroke, Ontario?	...
2.	If so, was any material for which priorities were granted subsequently diverted by the company for actual use at Haileybury, Ontario?


Mr. CHEVRIER:: 1. No application has been received from the Eddy Match company for priority assistance involving alteration or construction of premises at any of their plants. An application was received covering the importation from the United States of one angledozer which was required for the building of new roads through pulp wood areas which this com-
Questions

pany was opening. The application was applied for on March 13, 1944, and a preference rating of AA-3 was assigned by the department on March 29, 1944.
2. No information. Please see answer to question 1.


NATIONAL FILM BOARD
Mr. DO HI  ON@: What is the set-up of the national film
board?
Mr. LaFLECHE: Major General the Honourable L. R. LaFleche, chairman, and the following members: the Honourable T. A. Crerar, Dr. Georges Bouchard, J. F. MacNeill, M. M. Maclean, C. G. Cowan, Edmond Turcotte, Donald Cameron.


WARTIME INFORMATION BOARD-J. D. KETCHTJM
Mr. DORION:: 1.	Is Air. J. D. Ketchum working for the wartime information board?
2.	If so, (a) in what capacity; (b) what is his occupation; (c) since when; (d) what is his racial origin; (e) is he a British subject by birth or by naturalization; (f) what were his former occupations?


Mr. CLAXTON:: 1.	Yes.
2.	(a) In charge of reports branch; (b) editing publications and dealing with inquiries;
(c)	September, 1943; (d) Canadian; (e) by birth; (f) associate professor of psychology, university of Toronto.


CANADIAN ARMY-CENTRAL MECHANIZATION DEPOT, LONDON, ONT.
Mr. COLDWELL:: 1.	Will the Minister of National Defence inrorm the house whether an investigation has oeen instituted into alleged irregularities at the central mechanization depot in London, Ontario?
2.	If such an investigation is taking place, what irregularities, if any, have been discovered?
3.	Has the attention of the minister been drawn to the possibility of irregularities in other divisions of military district No. 1, and will the minister consider instituting an investigation into the administration of the entire district?


Mr. MACDONALD (Halifax):: 1.	Yes.
2.	Court of inquiry is now sitting, but has uot yet reported. It is not known what irregularities if any have been discovered.
3.	No. Nothing has been brought to the minister s attention to indicate the necessity for an investigation into the administration of M.D. 1.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. BENCE:: 1.	What is the total value of stationery and
printing ordered for delivery to R.C.A.F. equipment depots in each of the provinces of Manitoba, Saskatchewan, and Alberta, in the twelve-month period extending from May 1 1943, to May 1, 1944?	'
2.	To what firms were such orders given and what was the total value of orders to each of such firms during the said period?


INDIAN AFFAIRS-P.E.I. AGENT
Mr. AYLESWORTH:: 1.	Were the services of Neil A. McDougall. Indian agent, on Prince Edward Island satis-taetory during his term of service?
2.	Was Neil A. McDougall employed as [DOT] migratory bird officer in the maritime division? It so, were his services satisfactory?
'vhat were the terms of his employment aS In{',an a?ent, and what salary did he receive?
4.	Was his position as Indian agent in Prince Edward Island abolished ? If so, what was the reason ?
5.	Is the position of Indian agent in Prince Edward Island now a full time job?
6.	Who is the present incumbent of the position of Indian agent in Prince Edward Island, and what is his salary?
7.	Was the appointment of Indian agent of Prince Edward Island made under the Civil Service Act; was an examination of applicants for the position held, and if so, where?
8.	Was the examination written or oral; how many applicants were there, and what were the names of the applicants?
9.	WTas Neil A. McDougall an applicant for the position of full time Indian agent -for Prince Edward Island? If so, did he receive the appointment ?
10.	Was his rating, experience, knowledge of Indian affairs and general character inferior to the successful applicant?
11.	Was Neil A. McDougall a veteran of world war number one?
12.	If so, was he wounded overseas?
13.	Does he receive a disability pension? If so, what is his disability?
14.	When applicants were being examined for the position of full-time Indian agent for Prince Edward Island, were the provisions of subsection 4 of section 29 of the Civil Service Act observed and respected?
15.	What reason -has been advanced for the abolition of the position of, -part-time Indian agent for Prince Edward Island and the creation of a full-time position as Indian agent?



PRIME MINISTER FRASER


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, as I came

Prime Minister Fraser of New Zealand
in to the house this afternoon I was informed that the plane which was bringing the Right Hon. Peter Fraser to Canada had arrived at Boucherville a few minutes before three. As I told hon. members on a previous occasion I had invited Mr. Fraser to visit Ottawa on his way back to New Zealand. On behalf of both houses I also extended to him an invitation to address members of both houses of parliament when he was here. Mr. Fraser has kindly consented to do that, and will address the members of both houses of parliament to-morrow afternoon.
I have been speaking with His Honour the Speaker about the arrangements, and I believe it will suit the convenience of all if we follow the same procedure as when the Right Hon. Mr. Curtin, the Prime Minister of Australia, was here, that is to say, have hon. members assemble at three o'clock to hear the address by Mr. Fraser and after the address is concluded then have the house begin its regular proceedings. When Mr. Curtin was here, on behalf of both houses and of all political parties in the house I extended a welcome to him and asked my hon. friend the leader of the opposition (Mr. Graydon) to join with me in making it apparent that the welcome was unanimous. Since that time I believe a question was raised as to why an invitation had not been extended to the leader, or at that time the acting leader, of the Cooperative Commonwealth Federation party also to join in extending a welcome; and that would, I assume, apply also to the leader of the Social Credit group, though no question was raised at that time by any member-


Mr. HANSON (York-Sunbury):: What
about the other parties?


William Lyon Mackenzie King: My hon. friend is speaking of other parties and putting in a word for them. I do not know whether he intended it as such or not. However, with regard to the welcome to Mr. Fraser, may I say I think it would be advisable to follow the same procedure as was followed in the case of the welcome to Mr. Curtin. May I say that in extending a welcome I am not doing so as the leader of a political party. Nor is Mr. Fraser being welcomed as the leader of a political party. The welcome that will be extended to Mr. Fraser by myself will be from me speaking as the Prime Minister of Canada to the Prime Minister of New Zealand as representing the government and the people of New Zealand. Our constitution does not take account of political parties as such, but it does take account of governments and oppositions. The leader of the opposition is a salaried officer of this house, and I have felt that to make it quite obvious that both the government and the opposition are agreed on the welcome extended I should ask my hon. friend to join with me in that welcome, but that does not mean that I am excluding any other parties. As I have said, we are not speaking as leaders of political parties, we are speaking in our representative capacities. The government is speaking as the government in office, and the opposition is being asked to join so as to make it perfectly clear that this is a matter above party in every particular. His Honour the Speaker of the House and His Honour the Speaker of the Senate will extend a word of thanks because of their official positions in their respective houses. I hope that will be satisfactory to all concerned. I just want to make quite clear to my hon. friends who are leading other parties or groups that it is not in any way the intention to pass them over. Five speeches will be delivered as it is and to add to that number would perhaps be going farther than we should.


Mr. M. J. COLD WELL (Rosetown-Biggar):: May I just say a word? I think the house will agree with me that we have never endeavoured to usurp any place in this house. On previous occasions when distinguished visitors have been welcomed we have not intruded upon the time of the house to any extent. The remarks made by the leader of the Social Credit group and myself have always been brief. I think the Prime Minister is quite right in saying that he speaks for the entire parliament, but I take a different view with regard to the opposition. I do not think the leader of the opposition can speak for my own party in this house.


Mr. HOMUTH:: He never tried to.


Thomas Miller Bell: The supposition is that he does. I am stating my position very clearly. I think the precedents which have been established in this house over the past number of years ought to be followed in this particular, and I may say that we have a peculiar interest in the welcome extended to Mr. Fraser.


Some hon. MEMBERS:: So have we.


Mr. GRAYDON:: Not any more than anyone else.


Thomas Miller Bell: I entirely disagree with the procedure that is to be followed. I do not propose to create-I have never done so-any scene in the house on that occasion, but the policy which is now being laid down, if it is
4336	COMMONS
Prime Minister Fraser of New Zealand
to be followed, will have to be followed closely in the future, both in this and in subsequent parliaments.


Mr. E. G. HANSELL (Macleod):: Mr. Speaker, I think perhaps this group pretty well agrees with the Prime Minister (Mr. Mackenzie King) that on the occasion of the visit of any distinguished visitor the Prime Minister, who is the leader of the house, and the leader of the official opposition, together with your honour, might very well welcome that person on behalf of the entire house. However, the circumstances surrounding the visit of any prominent person to Canada are usually about the same. It is a matter of welcoming him; what one person can say can be said by anyone else, and in these matters there is a great deal of repetition. We do join with the leader of the Cooperative Commonwealth Federation party in saying that the leader of the official opposition does not speak for the entire opposition, for the reason that there are various schools of thought in Canada for whom I am afraid he cannot speak. I do not believe the hon. member for Rosetown-Biggar (Mr. Coldwell) can say that the visit of Mr. Fraser is of any more particular interest to his party than to anyone else. We are quite willing to abide by whatever decision may be arrived at, but we do ask that the ruling made be followed in future.


William Lyon Mackenzie King: In reply to the leader of the C.C.F. party (Mr. Coldwell) may I suggest that what he has just said illustrates the wisdom of not departing in the first instance from rules of procedure, but adhering strictly to them. I have tried, where it has been possible and convenient, to extend courtesies that did not strictly follow the rule; I have asked leaders of different groups to join in extending welcomes on such occasions, but my hon. friend will remember that when Mr. Eden addressed the house, while cordial welcomes were extended, they were overwhelming in number and in balance. By that I mean there was more in the way of welcome than there was in the way of reply from Mr. Eden.
I was taken to task by the press, and there was a good deal of comment around the house as to why so many should be requested to extend a welcome, and for that reason I thought it would be wiser thereafter to limit the number. Perhaps my hon. friend has heard of the young man who was about to be married, and someone asked him why he had not asked his father to the wedding, and he replied that he had to draw the line somewhere.


Gordon Graydon: There is one happy aspect to all this, Mr. Speaker; the competition to welcome the Prime Minister of New Zealand seems to be very keen. I hope this word will be conveyed to him, because I think it is very much better that way than in the reverse.


William Lyon Mackenzie King: I have sent it to him already by telegraph.


Gordon Graydon: I am going to deal with my right hon. friend in a moment in connection with another matter. When the Prime Minister speaks of drawing the line, perhaps he has drawn one already a little too fine., though of course it would be just like a bachelor Prime Minister to do this. I understand that Mrs. Fraser is to accompany her husband, but the Prime Minister has not said anything about her; neither have those interested gentlemen to my left. I think some expression of welcome should be extended to her also. Perhaps on this occasion the Prime Minister will want to make up for some of the things that have escaped him in the past.


William Lyon Mackenzie King: My hon. friend can trust me to see that every courtesy is extended to Mrs. Fraser.


Mr. A. W. NEILL (Comox-Alberni):: I
should like to say that I am very well satisfied to forgo my right as a leader of a group to participate in the welcome to our guest in favour of either the Prime Minister or the Leader of the Opposition; but if this principle of pandering to the vanity of individual groups is to be continued to its grotesque end, then I also want to be one of the speakers, seeing that the years of service of the party I represent far outdates those of the groups to my left.



INTERNMENTS


[Stage Direction]
On the orders of the day:
Mr. LIGUORI LACOMBE (Laval-Two-Mountains):: I gave notice to the Minister
of Justice that I was going to ask him this question:	Est-il vrai, tel qu'annonce a la
radio et publie dans les journaux, que le mi-nistre a ordonne la liberation de M. Camillien Houde?
Hon. L. S. ST. LAURENT (Minister of Justice):	The hon. gentleman is inquiring
whether a report, said to have been published in the newspaper and over the radio, that an order has been made for the release of Mr. Camillien Houde from internment, is

The Budget-Mr. Rowe
correct. I do not know what may have been published in the newspapers or over the radio, but if that was said, certainly it is not true.



THE BUDGET


[Stage Direction]
The house resumed from Monday, June 26, consideration of the motion of Hon. J. L. llsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Hon. W. E. ROWE (Dufferin-Simcoe):: Mr. Speaker, the presentation of the budget by the Minister of Finance, covering the annual expenditures of the government, has long since become a traditional custom in our form of parliamentary government. The people of Canada view with keen concern the heavy expenditures proposed in the budget now before the house. It is indeed a shocking reminder of the grim national purpose for which these expenditures are chiefly required. After almost five years of participation in civilization's most titanic conflict, our gallant forces are now engaged in a clash of arms more crucial than history has ever recorded. On many seas, in far-flung lands and in distant skies, they grapple with unprecedented forces to save our way of life. To those who have already laid their lives upon the altar of this nation's freedom we offer our deepest respect. To those who yet march in this great crusade we owe the full support of every fibre of our national being. Let us not boast, but humbly recollect that great expenditures of capital, great production of war materials or great debts for posterity are not the real sacrifices of war. The sacrifice of life and limb with the disillusioned hopes and aspirations of their family associates, is the greatest cost.
Since the outbreak of this war our people have stood ready to cooperate under courageous leadership which would fearlessly and srwiftly marshal our great forces of men and resources. While our numbers'are small, Mr. Speaker, no country engaged in this war has had a people more willing and capable, with resources more plentiful or better adapted for the great task of an allout war effort.
May I pay tribute to the valour and gallantry of our fighting forces in the tragic tests of land, sea and air battles. No finer generations of manhood and womanhood ever complemented this young nation than those young men and women who are to-day in His Majesty's forces. Secondly, may I pay tribute to those men and women who are not privileged to serve in physical conflict, but
who have given their best skill and energy in toil and direction of factory and field production.
Our magnificent volume of production during these war years is indeed a great compliment to the genius of our people and the efficiency of our industrial organizations. No people were more fitted to meet this test than those whose lives have been free, whose experience has been in matching the forces of nature in a new country, where individual freedom in every creative sphere has developed independence, self-support and confidence in their own initiative.
The phenomenal production of war machines and munitions has been made possible, chiefly by the adaptability of our splendid workmen and the ingenuity of our technical and scientific men under the guidance and enterprise of well-trained industrial executives -some of the best-trained industrial executives of the world. These elements, supplemented by the thousands of agricultural workers and other primary producers unfolding the rich natural resources of this great country, have maintained Canada as a potent force in these tragic world affairs of to-day. Our progress in such production has been an important part of our war effort. While our numbers in the fighting forces are few, yet, associated with powerful and great fighting allies, we shall win this war.
We behind the lines are challenged so to direct our nation's affairs that it shall not be merely "victory at any cost" but "victory at a minimum cost"-that it shall not end as a "war won and a peace lost," that it shall not result in foreign slavery avoided and home freedom surrendered. We are challenged to provide a full all-out war effort by the maximum utilization of our man-power and resources. This is what we are asked to do to-day against terrific odds. Greater equality of service during this conflict-yes, and equality of opportunity in peace, are our people's right and our government's responsibility.
The budget that has been presented to this house covering the estimated expenditure of six billion dollars is the highest in the history of this dominion. In short, it is now proposed that this colossal undertaking shall be achieved by a policy of increased expenditures on the one hand, with decreased revenues and higher borrowing on the other. The old policies of pay as you go, and those safeguards from inflation we have heard so much about, and the control of ordinary expenditures, which were adopted for war, are now disbanded, for election.
433S
The Budget-Mr. Rowe

The most significant feature of this budget is this abrupt reversal of government policy, in this most critical period of the war. This dying government now lifts the lid from the inflation they have long since fought, in a last desperate bid for election at any cost.
The Minister of Finance in his speech on Monday night said:
National income in 1943-44 was something like 12 per cent higher than in the preceding fiscal year.
That is for last year. And it enables him to follow more easily than ever before the policy which he has enunciated so vigorously in this house. Speaking directly on the question of the control of inflation the minister stated.
The need for it is evident on every side. It is not without its irritations and disadvantages-
And those are nasty things in election years; he did not say that, but I say it. And may I add, he has had some experience, too, in elections.
-but its beneficial results are beyond dispute. It is only necessary to remind the house that the government reaffirmed its policy in November last and again in March, and that the successful maintenance of that policy, through the period of active military operations in Europe and in the readjustment which will follow', will be even more important to this country than it has been in the past, and that it will be at least as difficult.
These are the minister's own words. Is it any wonder, Mr. Speaker, that after announcing a policy that repudiates control of inflation we find the minister stating, and I quote:
I must repeat and emphasize that this proposal does not imply that the need for saving is less.
Still he takes the savings of the people back, and undoes the purpose for which those savings were taken away from the people in the first place. The child was born on this side of the house, reluctantly accepted on the other side, and forsaken before it was two years old. Why, Mr. Speaker? He states further:
On the contrary, from every point of view, the need is greater than ever before. Civilian goods continue to be in relatively short supply, the demands from the war fronts are more imperative; and over-all cash requirements are mounting to new high levels.
I can well recall when the compulsory savings plan was adopted. Some may not have understood me when I said it was on this side of the house it was proposed, and it was on that side of the house compulsory savings were adopted. To-day they are disbanded when they are needed more. Why the inconsistencies of this budget are apparent even to a child, and the preelection bids can be seen by a blind man.

The proposal of the Prime Minister, which was referred to by the Minister of Finance the other day in his budget speech, regarding family allowances, to come into effect in July of 1945, is a strange advance notice for another parliament to carry into effect an election bid for power by a government that knows this parliament expires before that date. It uniquely disregards provincial rights, which are so often used as an excuse for the lack of policy regarding our natural resources. If this preelection paternalism is sound to propose this year, why wait to practise it next year? Is it because the dominion government know that this issue belongs to provincial jurisdiction? Do they expect this election bonus to be discussed by the dominion-provincial conference, and do they intend to leave it to that conference to share responsibility for its rejection? Every year since this war began, the Minister of Finance has been preaching about the dangers of inflation. Toward meeting such dangers the government inaugurated price control with speed and dispatch, and confiscated workmen's wages before they were received. These were imposed upon our people as war-time necessities to keep purchasing power down to a reasonable ratio to the rigidly rationed consumer goods. That principle, Mr. Speaker, was heralded as the bulwark against ruinous inflation. It was imposed upon the farmer, even though he well knew it was a frozen basis of unfair prices. It was imposed upon the workmen to the point where more work meant less pay. Indeed, it was given to every class within this nation as their war-time duty. Never during this war has inflation so dangerously threatened our economic stability as at the present. This is obvious to everyone. This we were told last Monday night by the Minister of Finance. Yet we now witness the spectacle of this floundering government, in a hopeless effort to buy its way back into power, reducing old taxes with one hand and giving out new hand-outs with the other, thinking not of the next generation but planning for the next election. If there ever was a time in our national life when we should not adopt a defeatist attitude by accepting a policy of paternalism that will establish in perpetuity a billion dollar annual budget for ordinary expenditures in Canada, it is now.
Has this government some secret assurance that the war will be over before the end of this fiscal year, or before the new responsibilities created by this preelection gesture will arise? Will any minister now rise in his place in this house to indicate that Germany will be subdued and Japan beaten before this fiscal year is out? No, but rather:

The Budget-Mr. Rowe
No one speaks because he does not know;
No one rises because he dare not rise.


Some hon. MEMBERS:: Oh, oh.


William Earl Rowe: My hon. friends may laugh, but they cannot tell us. My hon. friend the Minister of Labour (Mr. Mitchell) will not rise. No one sits closer to a job unfinished than he. I take second place to no man in my desire to give security to the people of Canada. I have suffered as much as any hon. member of this house in my regard for the problems of the labouring men and the poor people of this country, but I view the payment of cash bonuses to large families with well-founded doubt. When I think of the potential fathers of this nation battling far from home and dying to save our freedom, I can only see the acceptance of this reckless political bid for power at this time by any party as a piece of callous cynicism.
Great over-all schemes have been heralded by this government for many years. I have sat here and listened to them being announced periodically for periodic purposes. We have listened to the glittering generalities of security in the speech from the throne, and we recently heard about this preelection bid of cash hand-outs to families. These are not plans for health and welfare; these are government cheques for favour and popularity. This is cash which may not be spent for health or welfare. It can be spent according to the dictates of the father of the family who receives the cheque. Is there any assurance that these cheques will be used to pay dental bills or in connection with the health and welfare of the children? No. We believe that Canadians want most of all reasonable assurance of gainful employment and the dignity of self-support. We on this side of the house believe that under a sound social economy, dependency and poverty, with its sickness and suffering must be dealt with as a national problem. The party to which I belong does not take second place to any party in this house in its desire and determination to assure the provisions for a sound social security programme for this young dominion.


An hon. MEMBER:: You are taking in a lot of territory.


William Earl Rowe: It does not take much territory to take you in. In order to establish a workable scheme by which a sound health and welfare programme may be made effective, I urge upon the government that they set up at once a dominion-provincial welfare and assistance fund. Why fool with this issue As a first payment the dominion should contribute to that fund a sum at least equal to our present contribution to the united nations
relief and rehabilitation administration. We are not afraid to be specific as to where we stand on the question of social protection for our people. I hear my hon. friends on the other side laughing, but they have followed their same policy since 1919; they have not changed it in twenty-five years, except to bring it out and dust it off for election purposes.


Mr. MACKENZIE (Vancouver Centre):: You have changed leaders five times.


Gordon Graydon: You are going to change to another one now.


William Earl Rowe: Your leader may still be your head, but he will change places after the next election. The immediate steps by which we would expect to get our programme into motion are as follows:
1.	The establishment of a dominion-provincial welfare and assistant fund, to which I have referred.
2.	Set up a competent body of experts, nominated by all parties in the house, to examine the ill-conceived and half-digested proposals now suggested by the government, and report upon them. This body might be the reorganized social security committee of the house or a specially appointed commission of inquiry. In either case, its task would be to consider the problem of social welfare in its entirety as a national problem, and not as an exigency of party politics.
3.	The summoning of qualified persons nominated by the provinces to confer with the commission of inquiry set up by this parliament.
4.	To convene the representatives of the provinces for a dominion-provincial conference as each item of an integrated programme reaches the stage of report.
5.	To free the financial assistance, in the way of public health grants to provincial governments, from the unworkable insurance sections of the proposed national health and insurance act, and make them immediately available to the provincial governments.
6.	To extend grants from the dominion-provincial welfare fund to each province in accordance with its needs so that it mav enlarge its hospital facilities, nursing services and clinics in urban, rural and hinterland areas. Under this heading also we suggest that the dominion government share with the provinces the burden of new capital expenditure for hospitals, convalescent homes and homes for the aged. This can be done by the provision of funds, grants of federal land, buildings and equipment.
7.	To raise the standard of nutrition by education and by assisting the marketing and
The Budget-Mr. Rowe

distribution, of essential foods to Canadian families of small means, especially where there are young children.
8.	To utilize the dominion-provincial conferences for the drafting of housing plans for urban and rural communities with a view to reallocating population as economic and hygienic considerations demand. The scope of such plans should include provision for wider electrification of rural homes, and the improvement of homes now occupied by families in the low income group.
9.	To see that all residual problems of social assistance, such as provision for the aged, blind, handicapped or dependent persons, can be dealt with swiftly and flexibly. This purpose can best be served by developing provincial agencies, assisted by the dominion welfare fund. Local administration of such agencies is essential if each case is to be treated on its own merits.
10.	To develop a system of contributory social insurance against the ordinary hazards of community life on a sound actuarial basis, with the dominion government holding and guaranteeing the reserves, rather than resorting to handouts such as the family allowance proposal.
I believe that during these tragic war years we surely must have learned a lot. I believe we have learned more than we ever learned before. The importance of health and fitness of our men and women has been brought home to us more forcibly than we thought possible. The health of a citizen in British Columbia or in Prince Edward Island is just as important to the sound stability of this nation as the health of a citizen in Ontario or any other province. We can maintain our social services in sound unison with that forward-marching enterprise and development awaiting this young country, if we but use our common sense. The policy I have proposed decentralizes control instead of ignoring the right and function of other legislative bodies.
Health and welfare will then cease to be an election football. The hon. members who sit" to your right, Mr. Speaker, have kicked it around the political field ever since their convention of 1919, twenty-five years ago.


Mr. FRASER (Peterborough West):: And
there has not been a touchdown yet.


William Earl Rowe: When this sounder programme is put into effect, it should be to the mutual interest of all legislative bodies, independent of politics, to carry it out in the common and broad interests of our national health and welfare, about which there cannot be much issue. Why should the matter of health be

kept in the federal field when originally under the British North America Act it was not so intended? We realize that we are entering a new age and that after the war we shall need more health and welfare services. Let us meet the issue now, instead of talking about it every four years and then dropping it. Let us meet it now, once for all, so that it will be dealt with consistently in the future.
It is not my purpose to criticize in detail the budget or the many errors in the administration of last year's budget, nor yet the personnel of the government that sits to your right, Mr. Speaker. However, I deem it my duty, representing truly Progressive Conservative principles, to offer a constructive warning against the tendency of the present administration. May I therefore confine my observations chiefly to the trend towards bureaucratic control, the failure to marshal our forces, the unsoundness of our excessive taxation, unbridled expenditures, and the disparity of farm prices.
The trend of government policy in regard to these matters is to-day halting individual enterprise and beckoning state control. In patriotic submission our people have yielded to controls, regulations, restraints and restrictions to assist the government in its gigantic task. However, our people expect the minimum of these bureaucratic controls, even in war time, and most certainly they expect their elimination after the war if peace time freedom is to be restored in this dominion. Under the War Measures Act the powers of the executive are almost unlimited. Such authority can become a danger to democratic institutions, even if it can temporarily be reconciled as a war necessity. For many years we have been lectured in this house on the rights of parliament. The present Prime Minister has opposed most vigorously the vicious practice of government by order in council. As I listened to him in my younger days in the house he was an inspiration to me with respect to the rights of parliament, but not so much to-day.


An hon. MEMBER:: He has lost his
glamour.


William Earl Rowe: My hon. friend says that he
has lost his glamour. I think of all the inconsistencies between his preaching and his practice. Long ago he stated in this house that government by order in council should end. He will remember well that statement. He said that it was opposed to representative government. True, we are in war and we must have some regimentation, but it is alarming

The Budget-Mr. Rowe
to see so many of the functions of this house relegated to the secret chambers of the east block, where the tired and weary executive give new powers of executive control to boards which are not responsible to the people or to this parliament. Government by order in council is now common practice, and it is frequently abused by amending purely civil statutes, as well as meeting war emergencies with departmental administration rapidly surrendering its functions to complete bureaucratic control.
The consideration of taxation problems used to be foremost among the functions of this house. Our people knew what was going to happen; they knew the rates that were levied; the rates were common knowledge. But under the present system of government by order in council, hundreds and hundreds of tariff changes are made and thrust upon private enterprise with shocking suddenness. Since the war began over 45,000 orders in council have been passed, and my hon. friend behind me says that another armful came over from the east block to-day. These orders in council have been passed in ever-growing disregard for the rights of parliament itself. Twenty-five orders in council are being passed every day that this parliament sits. Many excellent men are struggling to carry on this bureaucratic muddle which the government has established. On the good personalities of these controllers I shall not hesitate to comment. Under the authority of the War Measures Act the wartime prices and trade board issues a new unprecedented licence to exist to different enterprises almost every morning. This added uncertainty, at a time when the government's tariff policy is known to no one and its taxation laws are understood by so few, shatters the confidence in government that is so essential for the progress of this dominion. How in these circumstances can the executives in industry and commerce, to whom we must look for the planning and utilization of our resources after this war, prepare to give full employment to our returned soldiers and war workers when the war ends?
The vital spirit that lies behind the responsibility of parliament must not continue to be smothered under the War Measures Act. Although parliament freely gave the executive certain rights, unless the abuse of such rights is checked, this house, as the citadel of our freedom, will become the home of a new autocracy.
The normal policies of government have been conspicuously replaced by administrators' orders, commission regulations, and
board controls, authorized by order in council instead of by parliament, and applied without notice, as the expediency of each day arises. Indeed, Mr. Speaker, this fourth arm of government, established for a just purpose but extended evidently by design, threatens to undermine the bulwarks of our democracy.
With such a lack of policy for war, is it any wonder our people search in so many new fields of thought for a policy for peace? In 1939, when war was declared no fixed policy on its execution was decided. Some believed that we had a limited liability. Some believed our participation should be one of production. It was only after a careful review of every political aspect of our sovereign rights that we, all too late, joined the commonwealth air training plan. For almost a year, the war raged close to the gates of Britain before even an inventory of our human resources was taken. This was to be the basis and beginning of our man-power planning. Slowly and cautiously, a thirty-day compulsory training scheme was born, enlarged into a four-month plan in 1941, later to grow into the now infamous home defence plan. In 1942, the national selective service plan was born after the advent of the now historic plebiscite. The Prime Minister then said: "It is imperative that the services of all should be directed into wartime tasks," and the Minister of Labour (Mr. Mitchell) said: "Even the girls must be taken from the 'golden slipper' trades."
One of the government's famous information bureaus, ponderously toiling on into the night, to save their master's face, told our people that selective service meant just what it said-"placing each where he could serve best." After five years of floundering uncertainty, we now have the glaring spectacle of national humiliation, in a policy that is costing this country between $150 and $200 million per annum. To maintain an army where there is no fighting, men from field, forest, factory and store, has created a vital jam in every production front at home, and has mocked the tragic need on every fighting front abroad.
For the honour of Canada I urge the government now to remove the political halo that surrounds this most ridiculous camouflage, and turn these able-bodied men back to the farms, the factories and the forests where they can produce for victory until they are marshalled for the more vital service for which they were conscripted. To-day there is no government policy to send this home army overseas, and no purpose to keep them here. On every front, at home and abroad, our comrades plead for men.

The Budget-Mr. Rowe

The government is fearful to move forward and ashamed to turn back. I do not know how my hon. friend can laugh. Canada is not laughing with him; the boys overseas are not laughing with him.


Mr. CRERAR:: I am afraid they are laughing at the hon. member, though.


William Earl Rowe: To-day, Mr. Speaker, 75,000 of these men stand at ease without a mission, while the government adds another $150 million per year to the taxpayers' burden. Indeed, they are not as useful here in Canada for an all-out war effort as the lost legion ' which my hon. friends refuse to seek, or the forty-nine thousand and one men whom they admit they cannot find. The folly of building such a defence force at home while our allies fight the enemy three thousand miles away is recognized by all. Indeed, the school children are talking about it. They are not needed here to win over there. Surely when our best men are dying for our freedom we can take our people into our confidence and view the reality of things as they are. Let us tell the people the truth. Let the government say why they are exercising the policy of conscripting men from useful toil and withholding the power to direct them for the purpose for which they are required. That is the question I leave with the government. They have tampered with it for four years and they might have tampered with it until Britain, the citadel of freedom, had fallen-all for what? Well, Canada will answer, and the people in my hon. smiling friend's riding also, will answer.
The magnitude of the present budget proposals .indicates the tremendous tax obligations that must be met by the all too few taxpayers of Canada. It anticipates the ability of the people to pay, and it reflects again the fact that no similar number of people in the world have ever enjoyed such abundant resources. I submit that the taxation forms should be simplified and should more clearly indicate what the taxpayer is required to pay. To-day they are subject to various interpretations. The present tendency towards more complicated systems shows us that we shall rapidly become a nation of bookkeepers unless there is a change in this trend. Parliament is, or rather was, the only constitutional taxing authority; yet in many cases to-day, taxes are not only collected according to the discretion of the minister, but they are fixed by the decision of departmental officials far removed from the house. Such bureaucratic taxation must not become a part of our democratic system.
To-day, after five years of war, many companies do not know where they stand. The

annual financial returns of shareholders must state, "amount of taxes cannot yet be determined." In view of the government's failure to simplify the taxation forms, I recommend that a thorough investigation be made to devise methods of reducing the national waste of labour and time in the preparation of income tax returns. To-day few people understand them, and they have grown to be a burden to the government as well as to the taxpayers.
Our complicated tax structure is a serious problem, and the unsatisfactory state of affairs that arises in its administration is equally disturbing. The treasury seems to have developed a bureaucratic attitude towards the nation's producers, and an unwarranted lack of confidence in the common taxpayer's integrity. The purpose of our taxes to-day might well be said to be twofold. The first is to raise needed revenue, and the second is to prevent inflation by restricting purchasing power. The spirit of tax collection to-day seems to be the extraction of as much as possible for the immediate requirements of the treasury, with a reckless disregard for the expansion, employment and survival of industry.
In the interests of our longer-term economy, there is a limit to the extent to which taxation can be carried. Canada's debt to-day is about $11 billion. The carrying charges of this, and added war requirements, plus a long list of new social services that are proposed, constitute an unprecedented challenge to our people and our resources which can only be met by the soundest utilization of every potentiality of this nation. However, our task must be to win the war. Before considering a general modification of the tax structure, to preserve our ability to produce, we must meet the war emergencies.
Our first task, I say is, to win the war. We must look to the future. The minister has told us that the present critical man-power shortage is seriously aggravated by absenteeism and refusal to work overtime. I submit that the present budget offers no effective solution to this problem. Now that the war has reached its most critical stage and every ounce of our energy must be mobilized behind our fighting men, the basis of taxation of the industrial worker should be on the standard weekly hours he works, without any tax on overtime for those who are ready to give this much-needed extra service until victory is achieved. If our people are to carry the burden that will remain on their shoulders many years after the war is over, our basic sources of revenue must be preserved and

The Budget-Mr. Rowe
expanded. The present haphazard taxation system must be placed on a more scientific basis or the wellsprings of revenue will dry up.
Taxation of the farmers' income is perhaps the most complicated and in some respects the most unfair. The farmer may invest $5,000 in high-class live stock, and he and his son after fifteen years of diligent care may be able to make a special sale of the best part of the herd for a substantial sum, on which he is now subject to general income tax levies of one year's profit.


Mr. GIBSON:: That is not correct-it is
averaged back five years.


William Earl Rowe: In fairness to the farmers, and as a means of providing a greatly needed incentive to investment in the improvement of agriculture I urge the immediate revision oi income tax levies on farm incomes so that annual sales shall not establish the excess profits of a special sales year but shall be calculated on the average income for a six year period.
Revision of the corporation taxation laws is no less required for industrial concerns. The present system of double taxation, through corporate and personal income tax collections, is not only discouraging industrial enterprise but is penalizing the individual shareholder. Those who have small investments in corporations are often indirectly paying from 50 to 60 per cent income tax on earnings of such money and when such dividends as are left are received, they are taxed again at the rate of the individual's general income. There is a discrimination against the small shareholder whose investment income has been taxed on the high rate, while his personal income may be much lower. The shareholder, on the other hand, who is in the higher income brackets, finds the earning of the capital he invests in industry taxed by a company rate of perhaps sixty per cent, and the balance he receives taxed another sixty per cent as his individual rate. This is a dangerous type of taxation that defeats its own purpose. Money invested in industry to employ labour and produce wealth should yield a better return at least than money loaned in government bonds, where no such risk is involved.
It must never be forgotten that the power to tax is the power to destroy. The first step towards such destruction is the imposition of rates so excessive that the incentive for greater production is gone. While there is a limit to borrowing, there should also be a limit to taxing. Heavy debt is not desirable, but excessive taxation can well become disastrous. If we are to meet the world competition of post>-war
100-273J
days in giving employment to our people, taxation must be reduced as soon as possible.
Some of the revisions I believe most vital for the employment of our people through the necessary encouragement to capital investment are: First, the elimination of the double taxation now imposed on company and shareholders. This would give the same encouragement to industry and employment in Canada as is now given in Great Britain. Second, the revision of the present rigid regulations of the income tax rules so that depreciation allowance could be made flexible enough to include obsolescence now so recklessly disregarded. Third, the earliest possible elimination of all sales tax on building constructions that are to be used to give employment to our people.
Taxation, Mr. Speaker, is an important policy as well as a means of compelling the public to furnish the expenses of government. This is a fact too often forgotten by governments which seem to prefer to cloak the levies-they make upon the people and disguise them; in all sorts of ways. Most taxes are obtained! by diverting some part of the stream of commerce into the national treasury. Until the war, the direct taxation of personal income, which is now the most just and straightforward of all forms of taxation, yielded but a small part of our national revenue. Prior to that, the great bulk of revenue came from tolls and penalties on the production and sale, the transport and the import of products and other sources. What the private citizen saved in income tax he paid out in the increased price of all that he purchased. It was a case of painless extraction. To-day these nuisance taxes still persist. Commercial and industrial processes which give employment to thousands must now hurdle all the fences which the government puts in their way as the price of doing business, and the private citizen knows little of what it costs him to maintain the luxury of government. His personal income tax is the one thing which reminds him of his citizenship in this dominion, and this is a burden which the largest part of our people never carried before the war because exemptions were high enough that only a minority paid income tax. To-day they are somewhat-bewildered, and in truth I believe that the.-government is bewildered as well. The income-tax branch must be bewildered; for a task has-been thrust upon it which is much greater than it was designed or equipped to perform. The result has been that far too much authority has been given to the minister and delegated by him to the heads of his department. The deputy minister, in practice, takes the framework of a tax policy that leaves parliament
The Budget-Mr. Rowe

and fills in the detail at his own discretion. He makes assessments and reassessments; he makes regulations and has recourse to all the machinery for collection of what he considers due him and his department. He is clothed with power, and against his authority the private citizen stands naked and unarmed.
If, in his bewilderment, the taxpayer miscalculates and overpays the government, there is no such ready means of recovery at his command. Section 56 of the Income War Tax Act provides only that the minister may refund an overpayment, provided application in writing is made therefor by the taxpayer. No one says the minister must. There is no equality or justice in the arrangement. The time is long overdue when the administration of income tax should be democratized, the powers of the minister limited and defined, and the machinery for ' protecting the citizen against arbitrary decisions made readily accessible. ' In Great Britain and in the United States the private citizen is better protected against both faulty assessment and improper collection. His complaint of overpayment is swiftly dealt with. I regret the tendency which seems to have been fostered by this government during the last decade under which the public business, which is everybody's business, is treated as though it were nobody's business, save only those who are clothed in the. mantle of governmental authority. I may say for .myself and I believe for my colleagues in this party, that we stand for strict limitation of personal authority in public service, and for ready" access to impartial tribunals for those of our citizens who feel that they have been wrongly or harshly treated. We believe, too, that the people, as masters *of the state and not its servants, are entitled to a regular and honest accounting.
It was inevitable that the prosecution of war would result in more debt and vastly increased taxation, but it was not inevitable that the principle of accountability should shrink to a corresponding degree, nor was it inevitable that the ordinary expenditures, exclusive of war costs, instead of being curtailed as this government promised when it took office, should have expanded from an actual expenditure of $413,032,000 in the fiscal year 1938-39 to $630,215,000 in the fiscal year 1943-44. What justification can there be for this increase when the population is fully employed and the demand for public services is reduced? If this disregard for prudence is to be observed in routine matters, what conclusions are we to draw concerning the expenditure of the billions of dollars earmarked for war purposes? No one who has any pre-

tensions to patriotism wishes to be niggardly in giving support to our fighting forces. But equally it must be said that no one with any pretension to patriotism would wish to limit the support which can be given to the fighting forces by permitting a riot of wasteful expenditure at home to consume the resources of this nation. What is the situation? The taxpayers do not know. Neither do the members of this house. For a while their apprehensions were allayed by the creation of a war expenditures committee, which was heavily weighted by the followers of the present government, and from the deliberations of which that i greatest bulwark of our liberties, the press, was rigidly excluded.
The people of this country are entitled to know whether the most important of their enterprises has been conducted efficiently, honestly and prudently. The war expenditures committee has lost the confidence of the people, and for that reason I think it should be disbanded. Its sittings are a waste of time; its deliberations are a mockery; it is not a satisfactory substitute for the public accounts committee or any other committee which may be named. It is hedged with secrecy; it conceals the truth. It is not a fearless agency for exposing the real facts. Have we reached the stage, Mr. Speaker, where about these great expenditures we have to listen only to the tired voice of this exhausted government?
This country stands at the cross-roads. One road points on toward wider fields of human endeavour and the other toward closer restriction and regimentation by state control. That "he who runs may read" is as true as ever, it goes without saying. It requires $5,000 investment in plant and equipment to employ one family head in industry. We as a parliament should be consistent in aims to encourage post-war prosperity and employment. When such investment in private industry ceases to be an attraction to the individual, the employment of our people becomes the responsibility" of the state. Enterprise is then no longer general, and initiative ceases to be personal, while a government monopoly will direct our course and dictate our destiny. So to-day we observe the old reactionaries to your right, Mr. Speaker, taxing out individual enterprise, and the new voices of an older socialism to my left endeavouring to "talk in" state control. The Progressive Conservative party offers progressive and creative alternatives to a people determined to maintain the individual freedom and virility that has built this nation, the same virility and freedom from which must arise the initiative and [DOT]

The Budget-Mr. Rowe
enterprise if Canada is to reach her deserved destiny as the most progressive and prosperous nation in the post-war era.
We trust the dawn of peace may soon return. Swift changes inevitably must follow. In all conscience our first obligation must be to the dependents of those who have made the supreme sacrifice and those who may be disabled. Second only to the medical care and vocational training of those unfit to assume their intended places comes the provision of general opportunities for all members of His Majesty's forces. No government or enterprise which forgets these men who have a "G. S." on their tunic sleeves will be worthy of a place in our national life. We shall have thousands and thousands more who have learned to work and produce as never before. That productive ability is a new asset. Indeed, Canada's hope for the future is work. The products of the toil of our people must be for the service of each other rather than for the purpose of destruction.
The farm, the forest, the mine and our fisheries must be coordinated in their true greatness with the vast industrial capacity now available. Home and other markets must be established on a larger scale if we are to maintain employment and a reasonable standard of living in post-war years. This objective can be achieved only to the extent that we 4 equalize conditions as between our primary and secondary producers.
In this regard I want to mention the place and importance of agriculture. The farmers of Canada, with their 750,000 families, constitute the greatest potential market for manufactured goods of any class of our people. Despite the all too prevalent disparity of prices which they have endured for many years, prior to the war they purchased about fifty per cent of all the manufactured goods sold in this country; they provided one-quarter of all the railway freight, and nearly all the truck transportation. During several pre-war years about forty per cent of Canada's exports were agricultural products. It is generally conceded that the rural population provides the largest domestic market for the products of Canadian industry. However, it is equally true that the purchasing power of the farmer can be no more than his earnings. The total of wages to be divided among our working men and women is influenced greatly by the amount made available by our basic or primary producers. It has been recognized long since that the degree of unemployment is in ratio to the degree of disparity in earnings as between primary and secondary producers. Our maximum production, employment and consequent prosperity can be maintained only by the equalization of conditions among the various economic groups of our country.
No class of people actually needs more manufactured goods than the farmer. Only a very few of our farm homes are fitted with modern' conveniences. At least 700,000 farmers need electrical fixtures, bathrooms and ordinary modern conveniences in their homes. A similar number have farm buildings that need extensive repairs. An equal number need new and more modem implements of production. The extent to which this great potential purchasing power can be brought to the support of industrial employment in postwar years is limited only by the amount our farmers have left to spend after going through the tax mill. For many years prior to the outbreak of the war, while our farmers constituted more than thirty-five per cent of our people, their earnings were only about twelve per cent of our national income. During this life-and-death struggle in which we are engaged our chief occupation must be the production of the necessary weapons to destroy our enemies. The full force of this unbalanced economy, however, will be felt only when our own consumption is again the chief market for our industrial production. A sound post-war Canadian prosperity cannot be achieved by perpetuating agriculture as the loss leader of our economy. For many years the farmer has been the forgotten man. In peace-time depression he was the victim of deflationary tendencies abroad. In wartime prosperity he is the martyr of inflationary fears at home. It is folly to compare the present price of farm products with the price received ten years ago. The degree of error can be calculated only in relation to the prices of other products or the price required to purchase agriculture's true share of the production of a fuller post-war employment.
It is no less alarming to observe the government's failure to appreciate the significance of the other great basic enterprises of mining and forestry. Next to agriculture our forest industry gives the greatest employment and contributes the most to our national prosperity. A wide range of possibilities for expansion has been opened up in this and other countries by recent discoveries and new methods of processing wood products. Yet in research, so badly needed, and all other forestry services the government spends less than is expended on our national parks. No policy has been disclosed that would give encouragement or lend confidence to the expansion of this great industry. The

The Budget-Mr. Rowe
dominion treasury receives about $80,000,000 per annum in taxes from our forest industries, yet less than one-third of a million dollars is spent annually to assist in the sounder development and expansion of this industry. Its progress and possibilities for post-war employment seem to have been disregarded entirely.	*
During difficult years Canada's great mineral production was vital to our solvency. It is alarming to find that eighty-four per cent of our mineral production in 1942 was from mines discovered prior to 1920, while only five per cent of our production came from mines found since 1930. These are dangerous symptoms in the development of a resource that is yet only in its infancy, an industry that employs over 100,000 people and is a potential market for nearly $400,000,000 per annum of the production of other labour and services.
The great mining .industry as a depleting Asset can survive and grow only by new discoveries and new capital. A policy with reference to taxation, depletion and depreciation that would restore confidence and inspire individual initiative to venture and risk is the only sound course to follow if we are to develop these vast hidden treasures for the post-war employment of our boys now overseas.
These basic industries are the cornerstone of our economy. From them we must secure our standard of living. Let us not be turned aside by all these promises of "pie in the sky," for we shall have to come to earth sooner or later, and when we do we shall find that we must develop the great basic resources of this dominion. In their sound development our people must find new opportunities. Our people do not want paternal hand-outs from the government; they need only the cooperation of the government in the development of these splendid resources.
While I am on the subject of mining, Mr. Speaker, I should like to make one suggestion. Perhaps the minister is not aware that the dominion treasury is losing in excess of a million dollars annually from the operations of highgraders which have not been stopped. By operating across provincial boundaries these highgraders are able to elude the vigilance of our provincial police forces, who have tried diligently to restrain this illegal traffic. I would suggest that at the forthcoming dominion-provincial conference an agreement be sought under which the jurisdiction over this nefarious practice may become vested in our splendid Royal Canadian Mounted Police. I am sure if this highgrading, which has grown to be big business, were stopped, the minister
fMr. Rowe.]
would find even greater additional revenue flowing into Canada's treasury than I have indicated.
We have many businesses in Canada which are not connected with mining or other enterprises. Businesses employing fifty people or less form the backbone of the Canadian economy and are the basis from which greater enterprises	and	capable	executivesspring. They have carried all the burdens imposed by a war economy of heavy taxation and restriction of supply without the compensation of cost-plus contracts-as many of the larger corporations have had. In preparing this budget the minister seems to have overlooked this	valuable	element	of our
community.
I sincerely	hope,	Mr.	Speaker,	that thispolicy of neglecting small business will not be continued. I should like to have the assurance of the minister that when war assets come to be disposed of, no one will be able to corner important surpluses, and that the small businesses will be able to get a fair share on equal terms	with	the	large corporations
throughout the dominion.
Following the proposals I have made I move, seconded by the hon. member for Yale (Mr. Stirling):
That all the words after "that" be struck out and the following substituted therefor:
"This house regrets-
(a)	that no adequate steps have been taken to simplify the forms and modernize the methods of taxation;
(b)	that no effective action has been taken to grant a measure of relief to the men and women in the lower income brackets by raising the exemption in income tax for single persons to not less than $800 per annum and for married persons to not less than $1,600 per annum.
(c)	that no provision has been made to encourage greater war-time production by exempting over-time pay from income tax;
(d)	that sufficient provision has not been made for the elimination of the inequities presently existing with respect to agricultural taxation;
(e)	that no adequate provision has been made to ensure increased post-war employment through the discovery and development of metallic and non-metallic mineral resources;
(f)	that the government has failed to make effective the full mobilization of our financial, industrial and material resources, as well as our man-power, but is maintaining a so-called home-defence army, at a cost to the taxpayer in excess of $150 million per annum, at a time when the need for men for army reinforcements, for farming and for industry is so urgent."
In conclusion may I say that this is truly a country of wonderful possibilities. It might well be described, as was another long ago, as "a land wherein thou shalt eat bread without scarceness, thou shalt not lack any thing in it; a land whose stones are iron and out of whose

The Budget-Mr. Coldwell
liill thou mayest dig brass." There is a great heritage awaiting all of us who live here; but before we can enter into it we must prove our -worth. We must resist the blandishments of the demagogue who bids us betray our fathers and take where we have not given. While developing our individual faculties we must absolve ourselves from the curse of Cain who asked, "Am I my brother's keeper?" and recognize that each of us individually is responsible, as are all of us collectively, for the well-being of his brothers. The trouble with many who are lured by the prospects so eloquently described by hon. members to my left is that they hope to be freed of their personal responsibility, and to drift serenely on the current of collective responsibility. As anyone can see, this means the abandonment of all responsibility and the passive acceptance of direction by authority.
The strongest, the fairest and the best among us are being tested by fire, far from the kindly influences of home. If we have faith in our destiny at all, we must believe in their virility. Are we to prepare for them a nursemaid state, in which those who claim rights without responsibilities may be spoon-fed on the enterprise of others? Our sons are not serfs or creatures bereft of hope, creative impulse or discretion.
The ingenuity and creative impulse of the individual, which is saving our freedom against the gangsters and dictators abroad, must continue to fashion the pattern of human society at home. Personal freedom and political freedom must march together. Neither can survive alone. Our future security and the several freedoms we each desire are not to be found along the pathway of patchwork politics, faltering leadership, and reluctant reform, which distinguishes those who sit to your right, Mr. Speaker, or along the road of reckless revolution as indicated by those to my left, who would allocate to themselves the power of decision over what is good and what is not good for those who breathe the free air of Canada.
The future of our people and their economic well-being depend upon their native enterprise finding new opportunities for creative action under a progressive policy of rational reform as clearly advocated by the party I have the proud honour to serve.


Thomas Miller Bell: Mr. Speaker, my time, unlike that of the speaker for the official opposition, is not unlimited. Therefore of necessity I must address myself to the problems raised in the budget itself. Health and nutrition, which were discussed by the hon. member representing the
official opposition, will be the subject of discussion in the house on another occasion, as will also family allowances and other plans respecting social welfare.
I was interested in what the spokesman for the official opposition had to say, particularly in his remarks about man-power. I thought probably he would endorse the statement made recently by the national chairman of the Progressive-Conservative party, Mr. McTague.
I wondered at the time why the statement was made outside the house, and why it was not made by the leader of that movement in Canada, Mr. Bracken, who, I believe, was present on the occasion on which the observation to which I have referred was made.
I noted carefully this afternoon, however, that we were told that the thing to do with men called up under the National Resources Mobilizaton Act was to turn that army back into industry and agriculture, where they could be most usefully used. I believe we should use our material and human resources for the winning of this war in whatever field it may be necessary to use them.
The hon. member for Dufferin-Simcoe (Mr. Rowe) of course took a cut at this group and called us socialists who were inclined to revolution, and all the rest of it. Let me say that the nearest approach this country ever made to revolution was under the Tory party between 1930 and 1935. They may try to camouflage their party as much as they like, but it is the same old Tory party with its face lifted. That is the only difference. So that * this afternoon I propose to address myself to the budget.
This, like other budgets we have had, is a war-time budget. The first concern of this house is that no financial consideration shall be permitted to hinder the flow of munitions of war and supplies to the battle fronts. We must make certain that everything that this nation is able to do physically to back the attack and safeguard the lives of our service men is in fact being done regardless of money cost. This, I am confident, is the settled policy of the government, as it is, I believe, the will of this parliament. Finance must be secondary to other considerations in the winning of the war. I wish I could say the same of the government's settled policy in regard to the after-war years, and that whatever should prove to be physically possible and desirable should be made financially possible. Without such a policy there cannot indeed be jobs for every one and a full utilization of our resources for an improved standard of living. I fear, however, and the present budget increases my fears, that the government is anxious to hurry
The Budget-Mr. Coldicell

back to the restrictive practices of orthodox finance and orthodox industry. It seems to me that there is a danger that money is to be put back on its throne as the primary criterion of action, and that human need, which has been our guide during the war, is to be dethroned. If so, our fighting men will hav^ fought for a democratic order in which social and economic justice.is still sorely lacking. Let us remember always that policies for war and policies for the reconstruction period after the war are indeed one and indivisible. I shall revert to the question of reconstruction before I close. At the moment I want to examine the equity of the budget in relation to the present fiscal year and its incidence upon our war effort.
The minister has properly directed his attention to the plight of the low income group upon whom, in my opinion, the financial burdens of war have borne and are bearing too heavily. Before I make any proposal I wish to take exception to the reference made by the minister to taxation in other countries. Even supposing his comparisons happened to be fair, would the fact that another country overtaxes its poor justify Canada in following a similar course? The minister stated that the New Zealand rates bear more heavily on the low income brackets than do the rates in force in Canada, but what he did not say is that the New Zealand rates include the five per cent social security levy.


Mr. ILSLEY:: I did say that.


Thomas Miller Bell: I read the speech very carefully, and it must have escaped me.


James Lorimer Ilsley: I said that it included national security and social security taxes.


Thomas Miller Bell: The whole inference,
however, is that which I have stated and which has been conveyed many times by hon. members who are associated with the hon. gentleman. To-morrow we are going to welcome the Prime Minister of New Zealand. Let me say that sitting around the Prime Minister are those who last summer, during the Ontario provincial elections, circulated a pamphlet declaring that the New Zealand government's policies were worse than those of nazi Germany. Yet the spokesman for the government, and the official opposition, will welcome the Prime Minister of New Zealand here to-morrow afternoon. I say that the criticism that is often made of other countries does not take everything into account.
Por example, the rates which are in effect in New Zealand relieve the population there of very heavy obligations. They do not require the same life insurance, they do not require 
the same health insurance, the same medical fees, the same medicine, the same hospitalization, and so on. Those things are met out of what are sometimes referred to as tax levies in this sister nation of the British commonwealth. So I say that when we come to appraise what is happening in another country, let us be fair about it and say what the people of that country are getting for the levies they pay. By comparison, Canada falls well at the foot of the list of nations with social security programmes.
I turn now to the minister's proposal that forced savings be abandoned. Let. me say to him at once that I am glad it has been found possible in the light of our financial position to lower the total levies upon these people. That, of course, is the immediate effect of the proposal, and I am glad it has been found practicable to risk this reduction without danger to our war effort. However, what the government proposes is in effect the taking away of the rose and leaving the-thorn. If it is necessary to collect money from the low income group, why should it not be taken in the form of refundable savings rather than in the form of pure taxes? What we propose is this: let the full amount to be paid by the low income groups at the new rates be paid in as savings to be returned with interest after the war. Pure taxation could start with the higher incomes, and at such a point the proportion of refundable savings could taper off. The rates on the lower incomes proposed by the government can remain in force; the same total revenue would be made available for the war effort, but the burden on the substandard wage and salary earners would be lightened through the return of their payments after the war.
I believe that when I say this I speak for the vast majority of the Canadian people. Statistics of the 1941 census revealed that sixty-two per cent of all-I would draw attention to the word "all"-wage and salary earners made less than $950 a year. If these people must be taxed, let some or all of their taxes be refundable after the war. If exemptions are not to be raised substantially above the present levels of $660 for single persons and $1,200 for married, surely what we propose is the fairest course of all. I think our proposal will be found both equitable and practical. Refundable savings in. the hands of those who will need them most in the post-war years is highly desirable. In the minister's own words, "a reserve of savings will be of great value to the individual and the nation after the war."
Needed purchasing power would thus be put into circulation to assist in maintaining employment. The danger of inflation during

The Budget-Mr. Coldivell
the war would be curtailed, but in addition-
I regard this as most important-deflation would be forestalled after the war. As for war production, it would be stimulated further under this proposal than under that of the government; for added incentive would be given the low income workers through the knowledge that whatever they paid in now would be refundable to them after the war. As for the administrative machinery with regard to these refundable savings, it has been built up and it ought not to be dismantled.
Let me quote in further support of this proposal the survey of the Canadian publishers' war finance publicity committee. A cross-section of the people were asked, "How long could you get along if you lost your job?" The replies reveal that over fifteen per cent could not get along for as much as one month, and many of those expressing no opinion must be added to this group. Another thirteen per cent could not get along for more than two months. If, therefore, collections must be made from the low income groups, let them be made in the form of savings returnable with interest in the after-the-war years. But alternatively I propose, and this proposal is to my mind the most equitable of all, that the exemption on low incomes be raised. Single incomes of say $1,000 or less and married incomes of say $1,500, or $1,600 a year, as has already been moved to-day, could be exempted altogether from either forced savings or taxation. The necessary revenue can then be found in the retention of refundable savings in the higher income brackets and an upward revision of the high income rates; indeed even, as I have suggested before, putting a ceiling on high incomes.
It is strange that at this time, when Great Britain is continuing refundable savings both as an equitable war measure and as a lever for post-war reconstruction, this government should find that the only way to afford taxation relief is to abandon this feature, this device of compulsory savings refundable after the war. In my opinion, as I have already suggested, there are other fairer ways of affording the needed relief.
The tax proposals that I have just put forward are essentially directed toward a democratic realization of fairer income distribution throughout the entire nation. In that direction, Mr. Speaker, we think lies social justice, individual security, and a conception of national unity as yet undreamt of.
The minister boasted in his speech that our public debt is widely held, and I confess that much has been accomplished during the war along these lines. Much too has been accomplished in relieving the nation of foreign obligations, a fact which convinces me that this country is able to stand on its own feet economically if it but has the will to do so. But much remains to be done in the matter of fairer distribution of income.
During the fiscal year 1943-44 some 58 per cent of the victory loans were subscribed by special names and corporations. Furthermore, the government supplemented its borrowings through victory loans by loans from private banks to the extent, in round figures, of $170,000,000, and by the issue of treasury bills. Thus there is already a substantial portion of the public debt in the hands of a few. But what is worse is that the concentration of wealth may be seriously aggravated after the cessation of hostilities as small holders sell their bonds to the banks and to other financial concerns. May I say just here that that is where the refundable nature of the levy might assist us after the war. At one point in his speech the minister says that substantial numbers of bonds will be cashed in by small holders in the immediate post-war period, and at another point he states that the debt will be widely held. Yet it will be the speculators and the big holders who will be taking up the cashed bonds after the war.
The present concentration of wealth in their hands will in my opinion after the war be intensified because our present taxation methods make that almost certain. With this and other factors in mind the party which I have the honour to represent have proposed that the government guarantee victory bonds to the extent of one hundred cents on the dollar for the protection of the small holders against depreciation or speculation. The large holder can indeed hold the victory bonds to the date of maturity, when he will collect one hundred cents on the dollar. Further, we have consistently proposed that the tax structure be adjusted so that the financial burden of the war will fall where it can best be borne, not so much on the little men but more heavily on the war profits and incomes of wealthy individuals and the large corporations.
Further, we propose that the chartered banks be nationalized so that essential war and post-war financing can be accomplished at the smallest cost to the people through the medium of nationally-owned banks controlling currency and credit in terms of the nation's need. Speaking of banks, it is utterly fantastic that the government should pay interest to the banks on money which it has itself created by the issue of government securities. Yet that is what is being done.


James Lorimer Ilsley: May I ask the hon. member a question?

436u
The Budget-Mr. Coldwell


Thomas Miller Bell: I did not interrupt the minister when he was making his speech, and my time is limited. I say that that is what is being done, and bank profits, and, of course, the notorious inner reserves, largely stem from this financial sleight of hand. This is not a trifling matter at a time when the banks hold, according to the member for Parry Sound (Mr. Slaght), and I did not hear his statement contradicted, some $2,500 million in government securities, on which the government must pay annually in interest some $35 million.
I have tried to show that the budget proposals are less than fair to the small man. Now I intend to show that they are more than generous to the entrenched interests of this country. Nevertheless I do not criticize it in its entirety. Many of the provisions proposed merit the approval of this house: recognition of medical expenses incurred outside of Canada removes an anomaly from the previous budget; allowance of tax deductions to the blind is clearly just; widening of the definition of dependents, and particularly, if I may dare to say so, the inclusion in the definition of illegitimate children, a point I have often raised, is a welcome step; relief to the hard-pressed payers of alimony is also justice; provisions liberalizing the status of superannuation funds, particularly of organized labour, are both necessary and wise. Other features, too, deserve to be commended, but I cannot mention them in my limited time.
I congratulate the government upon the removal of tariffs from farm machinery, but I point out that this step, promised by the Liberals since 1919, is a mincing step, not the giant stride which the situation demands. Farm machinery is monopoly-controlled through the method of "price leadership". I do not think anybody who was on the agriculture committee will deny that. We saw that the prices for farm machinery followed the prices of International Harvester company, which dominates the field on both sides of the border. This is the sort of stubborn fact which the government ought to be facing up to at the present time.
In 1937, when the tariff on farm machinery was reduced, not only did prices to the farmer fail to fall but they actually rose. That is why the parliamentary committee was set up, and the recommendations of that committee still remain to be carried out. Therefore I urge upon the government the necessity of converting some government-owned war-time plant to the peace-time production of farm machinery, under, and this is vital, cooperative ownership, or at least some form of government ownership and control. Only then will the farmer receive his just due in the way of fair prices for machinery.

Turning away from the small man to the other side of the picture, what do we find? We find that the budget contains substantial and, I think, undeserved concessions to big business and an enlargement of those concessions from previous years' budgets. These concessions, I believe, flow from a mistaken philosophy, which says in effect that private enterprise must be cajoled and induced to the point of giving employment. The government is asked to make various tax and tariff concessions, to give monopoly a free hand, in effect to bolster business projects by devious means, to assume the risk of unprofitable ventures itself. This is not free enterprise as it was understood by our forefathers. But appeasement on the part of the government here as elsewhere fails, and returns ultimately to plague the very inventor of it; for, apart altogether from the objection that while the people are called upon to pay the shot it is private interests who stand to make great gains, such appeasement will never succeed in promoting full employment. Even with the help of costly concessions exacted from governments, private enterprise cannot carry the load. National planning and public endeavour must be the keynote of post-war expansion. It will be fruitless and, indeed, costly to engage in attempts to prop up the rotting structure of monopoly capitalism.
The minister states that the taxation treatment of business during the war has been severe. On the surface this appears to be true. There is the excess profits tax. But delving below the surface, the opposite appears to be closer to the truth. Average profits for the four years 1936 to 1939 inclusive are assumed by the Excess Profits Tax Act to be "fair" or standard profits; yet the net income of corporations for the year 1942, the latest for which I could find all the figures available, after payment of all taxes, was twenty-nine per cent higher than this average. My figures were taken from the statistical summary of the Bank of Canada. And over and above war profits as such, business interests are securing indirect war concessions. Through special depreciation they are able to obtain plant and facilities paid for by the people. Through capital assistance they are put in the position of being able to acquire war facilities for little or, in some cases, indeed, for nothing. Through ploughed back war-created profits they are able to increase their capitalization without recourse to new investment from the public. In short, business, but more especially big business, has been digging in during these war years. In this perspective, the various indirect conces-

The Budget-Mr. Coldwell
sions to big business contained in the proposed budget ought not to be approved by this house. Considering, too, the prospects for the post-war period, I think we should consider some of the projects that ought to be undertaken in that post-war period, and therefore I will move, seconded by Mr. Gillis:
That the amendment to the motion be further amended by adding thereto the following words:
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 country, rural electrification, the conversion of government-owned war plants to the production of peace-time goods, the public development of Canada's oil and mineral resources, the promotion of scientific research, and artistic and cultural work throughout Canada.
I move that as an addition to the amendment and therefore as a subamendment to the motion.
In addition to the general appeasement of big business which lies at the heart of the government's policies, what new specific concessions are contained in the budget now proposed? Let us take a look at them. There is, for instance, the proposal that business losses can be chargeable for taxation purposes against profits of the previous year or of the succeeding three years. Perhaps this is desirable in the interests of stability, but we may as well face up to it; it is clearly equivalent in its practical effects to an actual reduction in corporation taxes. That should be understood, and I should like to have the assurance of the government that the farmer will be given at least an equal chance to level out his income for three, four or five years.


James Lorimer Ilsley: Certainly. He is included.


Thomas Miller Bell: I am glad to have that assurance from the minister. I took it that it applied to the businessman. The minister's speech was not clear on the point and I am glad to get that assurance, because I believe that is particularly necessary to-day when fluctuations in the farmer's income are often the result of government policy or due to some request made by the government itself.
Looking at some of the other budget concessions, we find that depreciation at double the rates normally allowed is to be permitted in respect of certain investments. Here is another instance of the familiar subsidizing of private enterprises that cannot stand on their own feet. Its plain meaning, as I take it at
100-2744	_ i.1
least, is that the taxpayer is to put up one-half of the new investments but will get nothing in return. The minister will have an opportunity of explaining whether or not my conception of what he proposes is wrong. Let me give another instance, that of deferred maintenance including underground expansion in mines. That is to be deducted from taxes, and that, in my opinion, means that the taxpayer contributes to the cost of operation of private enterprise in that respect. The resolution that dividends of wholly owned subsidiaries of nonresident companies be exempt from taxation is another concession. It seems to me, if I remember the experience of the corporation correctly, that this would, for example enlarge to some extent, if not substantially, the already large profits of Aluminium Limited, which holds a large number of subsidiaries outside Canada.
Again, the resolution allowing the oil industry a tax credit of fifty per cent in respect of new wells is costly and, in my opinion, undeserved. No industry has been more profitable than the oil industry. No industry is entrenched in this country so strongly in its monopolistic position. Imperial Oil, subsidiary of Standard Oil of New Jersey, controls the major portion of the oil industry of this country. A few years ago, according to the price spreads inquiry, it controlled something like ninety per cent of Canada's oil industry. That, however, may have fallen a bit in recent years. Must the public, then, assume the risk of drilling new wells while private shareholders reap all the resulting profits? Is this subsidizing of private interests something that is in the tradition of free enterprise? I say it is not. Can the oil industry, requiring special inducement for the drilling of new wells, be considered as fulfilling its so-called free enterprise function to the community? Research costs may be legitimately deducted from taxable income, and we are doing that for private industry. Will the government give its assurance that public research through some agency such as the national research council will be pushed with all vigour after the war is over? I believe that our national research council and the young scientists associated with it have been virtually starved in recent years. The very best of our young scientists are driven away from our national research organization which ought to be one of the principal means of industrial and economic progress in this country.
I wish to say before I conclude-and my time is now drawing pretty close to its end- something about the prospects of the post-war years. The budget speech recognized how
The Budget-Mr. Coldwell

closely interwoven are the war and the afterwar years. I think that is clear, though in my opinion the minister's proposals conspicuously fail to offer a lead toward a solution of the dilemma of our time. That dilemma is the dilemma of want amid actual and potential plenty. Our fighting men deserve the best. They must not be allowed to return to Canada as a part of the world of yesterday. Therefore I say, lest this happen as it happened after the last war, let us prepare now for the expenditure of at least $5,000,000,000 in the two years following the war. Why have I made that suggestion so frequently to this house in the last twc or three years? Because I believe that in planning our post-war activities we should have a target and the assurance that certain moneys will be available and that this parliament is prepared to appropriate them. If we can appropriate, as we are doing this year, more than $5,000,000,000 in one year for the prosecution of the war, then we *ought, as a very minimum, to say that we are going to commit parliament to the expenditure of $5,000,000,000 for the two years following the war. I believe,, if we do that, we [DOT]can get our people to plan comprehensively to meet post-war needs in housing, electrification and all the other things which would improve the standards of life in this country.
I fear the future unless we have comprehensive plans. I believe that some of the countries of the world ar- going to undergo great economic and social upheavals. In spite of what another hon. member said to-day, they are the party promoting revolution. We want to see orderly democratic progress made in our country. That is the purpose for which we organized and the way in which we desire to lead public opinion in this dominion. This expenditure, set beside our war expenditures, seems paltry, but it is, I insist, the minimum figure. It is at least a target to shoot at, something solid on which to hang our hopes for a better Canada to come.
By pledging this we demonstrate the sincerity of our desire to build a new world. The governor of the Bank of Canada and the report of the James committee on reconstruction agree on this; that capital investments of a billion and a half dollars annually must be made in order to achieve jobs for everyone after the war. These are not my opinions. These are the opinions of the chairman of the James committee and the governor of the Bank of Canada. Therefore you see that the suggestion of $5,000,000,000 in two years, which we made two years ago, is not so far beyond the mark as most of our critics suggested when we made it. Private enterprise, by itself,

has not the remotest chance of meeting this total. Even the optimistic forecasts of its propagandists fall far short of it. What is needed is a new freedom to organize production in the public interest. We must bid good-bye to the restrictive practices of orthodox finance and orthodox industry whose only care has been the making of private profit.
Let me quote, Mr. Speaker, from none other than Winston Churchill himself in his 'book, "The World Crisis-The Aftermath." Speaking of the close of the last great war the present Prime Minister of Great Britain had this to say. While I do not agree with all that Mr. Churchill has said or done, I agree with the statement that he made at the close of the last war, which I am going to quote. He said then:
The organization and machinery of which we disposed was powerful and flexible in an extraordinary degree. The able businessmen among us, each the head of a large group of departments, had now been working for a year and a half in a kind of industrial cabinet. They were accustomed to unexpected changes enforced by the shifting fortunes of war. There was very little in the productive sphere they could not, at that time, actually do. A requisition, for instance, for half a million houses would not have seemed more difficult to comply with than those we were already in process of executing for a hundred thousand aeroplanes, or twenty thousand guns, or the medium artillery of the American army, or two million tons of projectiles. But a new set of conditions began to rule from eleven o'clock onwards. The money-cost, which had never been considered by us to be a factor capable of limiting the supply of the armies, asserted a claim to priority from the moment the fighting stopped.
The return of the cabinet to money-cost as the sole governing factor wrecked the dream and the war-time pledge that the British expeditionary force should return in 1918 to "a land fit for heroes." The heroes came back to stagnation and the dole.
In this country we have disregarded the money-costs for the destructive purposes of war. Let us do likewise for the constructive purposes of peace. After all, money is but the medium of exchange. If we fabricate the physical assets, if we can make the commodities, surely we should be able to distribute them among our people and the nations. As has already been said this afternoon, we have to-day one of the most highly trained groups of young men that the world has ever seen. The mechanized army, the men in our air force, have been trained in the operation of machines, in the knowledge of machines, in a manner that no other generation was ever trained. We hope that most of them will come back to us when	the war is	over.	How	are theygoing to live?	They	are	not	going	back	tothe bread lines;	they	are	not	going	back	tofiding the rods;	they	are	not	going	back	to
The Budget-Mr. Blackmore
low wage levels upon which they cannot live. The manner in which we have treated the youth of this country who have entered the armed forces, and quite properly so, has given them a new outlook on standards of living. We who travel across this country by rail see the young men and women who before the war would have travelled in the coach, travelling, and rightly so, where they belong, in the sleepers. We see young men and women who would have snatched a lunch at a counter or who would have brought a sandwich-box, go now, and quite rightly, to the dining-car on the train and get a decent meal. We have given our young people a taste of the better standards of life. You cannot bring them back again to the kind of standard of living most of them had before the war began. I see nothing in this budget, and too little in the proposals of the government now before the house, to give any assurance that our standards will be raised willingly when the war ends.
Therefore, Mr. Speaker, while one could have advanced other criticism of the budget; while perhaps some of my criticisms will be met in argument from the other side of the house-and I hope they will if in any respect I am wrong-I feel that this is indeed a rich man's budget. It offers a sop to the poor and underprivileged, but on the other hand it contains most valuable concessions to the rich and powerful individuals and corporations who to-day control this land. That, Mr. Speaker, is what I wanted to say.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, the two speeches to which we have listened this afternoon have been of a very high order. Generally speaking, I believe we will all agree with the sentiments expressed in them. I am sure each of us was impressed with the closing words of the hon. member for Rosetown-Biggar (Mr. Coldwell), who said that our boys and girls would not come back to riding the rods. I am afraid too many of us are content with making that statement; but I would venture to wager that if the Liberal government is returned to power, right after the war they will come back to riding the rods, and if they try to do anything about it they will be met with aeroplanes and tear bombs. That is a very gloomy thing to say, but all the evidences I can see in this house and in the banking and commerce committee, where I have had the privilege of serving for some weeks, would indicate to me definitely that there is to be no change which would in any way justify one in expecting that conditions after this war would be any different from those which obtained after the last war.
If I have overlooked any such changes I should be happy to have any government advocate point them out to me.
These are critical and momentous hours in the most critical and momentous period thus far known in our long and eventful history. Signs would indicate that we are now nearing victory and peace. The peace arrangements will provide us with the answer to a burning and insistent question: Is the second world war to have been fought for freedom or for the enslavement of mankind? The tides and winds are all set for the enslavement of our civilization. Unless the financial and economic thinking of our governments changes radically, the enslavement of mankind will be inevitable.
I Shall be be asked, "What factors do you observe which seem to indicate the introduction of slavery for mankind?" There are many such factors, but I shall mention only seven this afternoon.
The first factor is debt. It will be noticed that all the democracies are plunging into debt at a rate that is positively appalling. Those who are in high positions, who carry the responsibility of the war, of course are endeavouring to minimize in the minds of the people the seriousness of the situation. But when the president of our Bank of Canada in his annual report to the minister this year sounded a warning to the minister and the country,-though in a veiled, guarded and conservative manner, I should think that fact ought to be sufficient to indicate that already we are far beyond the safety point in the accumulation of debt.
The second factor is our taxation structure. It is true that this structure has been modified to some extent by the minister after having mercilessly crushed the people of Canada during the last year or two, but the indications are that a system of taxation is being carefully prepared, which can be fixed upon the Canadian people and which will persist for many years after the war. Debt and taxation produce slavery.
The third factor is bureaucracy. It is true that there are complexities in the environment surrounding us which to the ordinary individual make bureaucracy appear a necessity. Certainly we have established in Canada a bureaucracy which should satisfy even Hitler, and which is functioning with smoothness, precision and an irresistible power which I am' sure is quite satisfatory from the point of view of the bureaucrats. The people are becoming accustomed to that sort of government. Bureaucracy may be efficient, but it enslaves.
Another factor which is tending to enslave the world is abundance. One would think that when man invented great machines which.
The Budget-Mr. Blackmore

would lift from his shoulders the burdens of life and bring into existence an era of abundance such as his ancestors never even dared dream might be possible, the invention and introduction of such machines would be an introduction to a sort of paradise. Yet what has been the result? The more goods we have been able to produce, the more restricted our lives have become; the more it has become necessary, apparently, to control all those who are engaged in both production and consumption, until now we have a substantial party in the Dominion of Canada advocating, and being listened to while they advocate, complete government ownership of industry. That is being listened to by the Canadian people simply because they are being driven to a species of despair. They are being driven by whom?-by the Liberal party and by their counterparts in other nations. They are being driven by the Progressive Conservative party, because they have not sufficient vitality to suggest any substantial change that would impose even upon a schoolboy.
Consequently the people are going to say, "Well, if there is not anything else we can do about it, I guess we shall have to have government ownership, and anything that goes with it." And so we have the votes for socialism-no, not for socialism, exactly, but for something different from the horrible things the people have been enduring for the last fifteen years.
What is the reason? Abundance. Abundance can crush a people, unless those people know how to distribute that abundance. .During the war our ability to produce abundance has been enhanced surprisingly. I believe it was Doctor Charles A. A. Stein who, within the last two years, said that, since war broke out, the amount of raw materials available in the United States had increased between ten and one hundred times. That is simply because new processes have been discovered, as a result of which men are able to make almost anything out of almost anything. At the same time increased skill in the management of machines and technological processes has taught men how to use these new continents of matters which have been discovered for the fabrication of abundance. But up to the present time, astonishing as it may. seem, no one has been able to get the ear of any substantial number of people with any proposal as to how to distribute that abundance. This strikes me with .the deepest apprehension.
IMr. Blackmore.]
Another factor tending toward the enslavement of man is this very inability to distribute. And I think, too, that worse than the inability to distribute is the impatience which I notice when I undertake to discuss with the average group of people anything pertaining to distribution. People seem to think it does not count. Well, it does count. The ability to distribute does count.
Another matter which in my judgment is threatening enslavement is the fact that our people generally throughout the country are so completely unfamiliar with the new and strange conditions confronting them, that they do not know what it is all about. They are unfamiliar with the essential changes which have taken place. How rarely do we hear in the house, for example, any sober exposition of the impact of machines upon our economy? I believe this year the only member who has been sufficiently intrepid to discuss the matter has been the hon. member for Jasper-Edson (Mr. Kuhl); and he has been rewarded for his pains by at least half a dozen offensive remarks.
Why is it that we do not hear government members discussing the seriousness of the impact of machines upon our economy? Sometime between 1913 and 1928 we rounded some mighty corner in this world. We left an age of scarcity and sped into an age of abundance. Nevertheless we hear no serious discussion of the matter among members of the Progressive Conservative party, and there is no reference to it at all by the Liberals. And yet these two groups constitute by far the majority of members in the house.
Why is there so much indifference in respect of these important matters? It must be that there is an indifference among the - people in the constituencies represented by those hon. members. The people, generally, are unfamiliar with the adjustments which can and should be made to meet the new situation. They are unfamiliar with the educational equipment necessary to enable a democratic people to judge of the soundness of the various proposals available to them. Hon. members will find something of thought-provoking quality in the Ottawa Citizen of June 28 where, at page 2, appears an article respecting a survey conducted by the Canadian institute of public opinion. It appears under the heading, "What is the meaning of inflation? But few Canadians have the answer." We read that a careful survey was made of the people respecting the matter of inflation. Even among people with complete college educa-

The Budget-Mr. Blackmore
tions only thirty-three per cent had good answers; another twenty-eight per cent had only fair answers and the remainder were absolutely wrong as to the meaning of inflation.
Then, coming down through the various groups, including the college group, incomplete; high school, complete and incomplete; public school, complete and incomplete, we find the people displaying an alarming ignorance on the question: What is inflation? Some members will ask: "What bearing has that on the subject you are discussing?" Well, the bearing it has on the subject is simply this, that the very moment anyone suggests a monetary solution as being the way out, he is immediately met with the statement, "This will cause inflation." Then the rank and file of the people, not knowing anything at all about what inflation is, or how it is caused or how it can be controlled, are deluded by clever political advocates-and I shall use that word, to be charitable. The result is that we remain in danger. A very serious element in the threat of enslavement is the lack of information which prevails among' the Canadian people, and to an equal degree, probably, among the peoples in other democratic countries.
Another influence working for the enslavement of man is that in all the democracies the political parties, generally speaking, are endeavouring not to give the people the truth, but rather to deceive them. I have commented on this matter in times past. You hear Liberals devoting most of their time to extolling the virtues of trade. Any informed man knows that the possibilities of trade as a means of solving the problems which present themselves to-day are exceedingly limited. Therefore he should inform his constitutents, but he does not. He deceives them. He leads them to believe that the raising or lowering of tariffs is a panacea which will cure the ills confronting them. Any well informed man must know that the effect which tariffs have on the solution of our problem is extremely negligible. So that we have people being deceived.
In addition to that we have world agencies, such as international finance, definitely working for the enslavement of mankind through world organization. Such agencies are advocating economic planning and socialism as a means of obtaining security. They receive support simply because they promise security. They advocate a world police force because people can be deluded into thinking that a police force will mean peace. They advocate monetary stabilization because people can be deluded into thinking that monetary stabilization will greatly facilitate trade. These international organizations are working with an elaborate, highly organized propaganda machine.
I have named the several factors which are threatening to destroy the freedom of man. What is the present government offering as a solution? Nothing. What does the present budget offer by way of a solution? Nothing. All that this government is able to propose is an increase in debt or an increase in taxation. It talks about increasing international trade. I shall have something to say about this later on. The King government can conceive of no method of distribution except that of international trade. That is all we hear spoken of by the Prime Minister (Mr. Mackenzie King) and his supporters. This means that they advocate a struggle for favourable trade balances, which means that they advocate a resort to a system under which each of fifty odd nations must sell more than it buys.
Mr. ILSLEY; Why does the hon. gentleman say that?


John Horne Blackmore: Because without a favourable trade balance it is impossible for them to carry on. Is it not so? As far as I have been able to gather from the remarks I have heard, there has to be a favourable trade balance.


James Lorimer Ilsley: To say that there has to be a favourable trade balance is different from advocating international trade.


John Horne Blackmore: That needs a great deal of elaboration which has not been given on the floor of the house.


James Lorimer Ilsley: It does not.


John Horne Blackmore: International trade is a system that has failed to distribute and has involved us in war after war.


Mr. GARDINER:: How can you distribute without trade?


John Horne Blackmore: That is just a typical Liberal question. Liberals can see no other way of distributing. The question supports completely what I am saying.


James Garfield Gardiner: What do you propose?


John Horne Blackmore: I shall have something to say about that before I have finished; all things in their place. The simple fact of the matter is that the Liberals know of no way of distributing except through international trade. When that breaks down, their whole distributive machinery breaks down.


Mr. DUPUIS:: What will you do with your surplus production?
The Budget-Mr. Blackmon


John Horne Blackmore: I shall have something to say about that; all things in their place. I am saying that international trade cannot be relied upon as an adequate means of distributing. This has involved us in war after war.


James Garfield Gardiner: Would you distribute where there is no nation?


John Horne Blackmore: The other day when discussing reconstruction the Prime Minister named several of the committees which had been appointed by his government to study reconstruction. I wonder how many of us have read the recommendations of those various committees. If we have, I think we shall be astounded at the lack of anything constructive in those recommendations. They have simply added to the difficulty which has been created already by insincerity in the house. The obscurity and insincerity of parliamentary debate have served to confuse and confound the people of Canada. It is the solemn duty of parliament to give the people light. Party politicians have in fact left them in all-embracing darkness and fog. In these circumstances, therefore, it is natural that the people should swing from one extreme to the other, from the orthodoxy of capitalism to the orthodoxy of socialism. It is the duty of Canadian leadership to show the people that both of these orthodox ways are false and that the true way must be based on freedom. In either of these false orthodox ways there is no freedom. To have economic security Canadians must reform capitalism. To have freedom, Canadians must retain freedom of enterprise, freedom of speech, freedom of action, freedom for the obscure people as well as for the prominent.
In the report of each and every one of the committees on reconstruction appointed by the Mackenzie King government there is a blind adherence to obsolete and bankrupt formulas. There is not a hint of change. The voice of each committee sounds like the voice of big business speaking through its mouthpiece, the Prime Minister of Canada. If individual enterprise is to be bound to function under the restraints and prohibitions imposed upon it by the present government of Canada, then individual enterprise will, indeed, be short lived.
Individual enterprise under a reformed monetary system would have the power to give greater security than has socialism. And such security it can give without impairment of individual freedom. It must be the duty of every lover of democracy to fight to liberate our system of individual enterprise from

the prison house of international finance so that it may bring the people the security to which they are entitled.
Wherein lies the key to the solution of our perplexing problems? A minute ago the Minister of Agriculture (Mr. Gardiner) asked what we would do. I am going to speak in general terms, but I think my words will clearly indicate the solution. It lies in the adequate use of the national credit of each of the various individual nations. What is the essential nature of our problem? It is how to distribute. Mankind has learned how to produce what mankind requires. - What men mu,st learn is where and how to obtain purchasing power and how to distribute that purchasing power among the people and among the nations.
Then the consumers will be able to buy their needs; the producers will be able to sell their products. The wholesale textile association of Great Britain, in the second report of the post-war reconstruction committee on international finance, issued in March, 1944, quotes Sumner Welles as saying on March 30, 1942:
The problem which will confront us when the years of the post-war period are reached is not primarily one of production. For the world can readily produce what mankind requires. The problem is rather one of distribution and purchasing power, of providing the mechanism whereby what the world produces may be fairly distributed among the nations of the world, and of providing the means whereby the people of the world may obtain the world's goods and services.
Where now can money or purchasing power be obtained without additional taxation, without additional debt? Money can be created by the government of any sovereign state as,, for example, Canada created $26,000,000 and spent it into circulation in the last war, or as the United States in time of distress created greenbacks. I am not advocating that money be created by printing bills. There are other ways. But the principle of creating national currency debt-free is the principle upon which, a new economy and a new order must be based. The amount of such money that can be safely created and used by any state depends upon the goods and services which that state can produce and consume. A number of members have been struggling in the banking and commerce committee to get a little light to shine on the pages of the proceedings of that committee. I believe that we have succeeded in establishing that fact.


Mr. HOWDEN:: Would the hon. member permit a question?


John Horne Blackmore: Gladly.

The Budget-Mr. Blavkmora


John Power Howden: Is it your suggestion that the government produce currency and distribute that currency to the people of the country?


John Horne Blackmore: The suggestion is
definitely that the government produce the currency and distribute the currency, and the currency "will / enable the people to buy the goods produced, thereby providing a market, providing distribution and providing consumption. The' first question that will come into the hon. member's mind will be, "Oh, that would be inflation, would it not?"


John Power Howden: If I may say so, there has been a great deal of ambiguous talk that one finds it hard to understand, and I just wanted to pin the hon. member down on a certain point. Now I am satisfied. Thank you.


John Horne Blackmore: You have never had any difficulty in "pinning me down" on that point. I have said that thing with clarity at least one hundred times since I have been in the house, so that the poor wayfaring man, though a fool, need not err therein. Any state by increasing its production and consumption can increase the amount of money it can have, and the amount of money which it can have depends on the goods and services which it can produce and consume. Thus obviously, the state can increase its revenues by increasing its goods and services.


James Garfield Gardiner: It does not produce all the goods and services which the people require-


John Horne Blackmore: Then its business is to go about doing it.


James Garfield Gardiner: -unless it wants to ruin somebody else.


John Horne Blackmore: I realize the difficulties which lie in the way. Let me say this to the minister. The moment any person offers a suggestion you look at the difficulties. We grant the difficulties. But how many difficulties are there in the way of your trade proposals or any other proposals? Study the two together and see under which set of proposals you have the better chance of coming through.


John Power Howden: On what basis would this currency be distributed?


John Horne Blackmore: On this basis, that the object of the government would be to enable the people to buy enough of the goods they are able to produce.


John Power Howden: By what means?


John Horne Blackmore: Through modifications of price and modifications of income. Those are two adjustments which I should be glad to elaborate to the satisfaction of the hon. member. But I have not the time now. I have only forty minutes. I am talking against time. But that is the solution and the method. The state increases the income in the hands of the people, income which they will spend to enable them to purchase their needs from what they produce.


John Power Howden: The question is, how?


John Horne Blackmore: You do it through two devices, by modification of price and by modification of income. You had an example of modification of income in the Prime Minister's proposal to give family allowances. There is a modification of income. Anyone with the intelligence of a member of parliament should be able to go further and work the whole thing out.
The debt-free money available to the government of any state can be used, just as I have told the hon. member, to modify the price structure in that state-raise prices that need to be raised and lower prices that need to be lowered-and to increase the income in the hands of its people. The whole thing is done by the use of debGfree money.


John Power Howden: Debt-free money is the answer.


John Horne Blackmore: Debt-free money is the key to the solution. It is the basis upon which the whole thing can be worked out. My hon. friend is a doctor, is he not?


John Power Howden: I used to be.


John Horne Blackmore: He knows what a tremendous amount depended upon the discovery of anaesthetics.


John Power Howden: Quite so.


John Horne Blackmore: In the discovery of anaesthetics you had a great principle on which you could work. When you discovered that principle you could build upon it. The principle of debt-free money is a principle upon which you can work. Your money can be used to modify the price structure in the state and to increase the income in the hands of the people. Thus internal distribution can be provided for. That is the answer to the question of the Minister of Agriculture. International distribution can be effected by Mutual Aid arrangements, and Mutual Aid can be financed in considerable measure with debt-free money created by the state and spent into circulation, without any increase in debt and without any increase in taxation. Just as soon as the
The Budget-Mr. Blackmore

governments of the world come to understand that, they will not be afraid of increasing and elaborating their Mutual Aid agreements to the extent that the international distribution of goods will be based upon mutually acceptable arrangements rather than upon cut-throat competition, which works to the disadvantage of the weakest nations, the ones most in need of trade. Through cut-throat competition they lose their trade.


John Power Howden: Finally your solution consists in the distribution of debt-free money?


John Horne Blackmore: Yes, the distribution of debt-free money up to the limit of the nation's capacities to absorb that debt-free money by reason of the goods and services which the nation produces. That money is used in raising the standard of living in the economy.
Thus Mutual Aid can be extended to the degree necessary to enable all peoples to be free from want and free from fear. Thus trade rivalry can be reduced and eliminated, and thus the main cause of war can be removed.
I suggest, Mr. Speaker, that the government call in one of these many committees on reconstruction, perhaps the present reconstruction committee of the House of Commons, and say to the chairman, " Now look here, you are perfectly at liberty to call witnesses and examine papers to discover whether or not there is any validity in this contention of monetary reform. Go into the matter with very great care and call in as witnesses the men who know about it."


James Garfield Gardiner: We called Douglas the last time.


John Horne Blackmore: And he would have done an extremely good job, but for men like Hackett who did everything they could to hurt him and prevent his voice from being heard. If you call men like Douglas and have a committee that is sympathetic and ready to learn, and that is not trying to destroy him politically, not trying to get some little thing which it can magnify out of all proportion as certain Liberal members on the banking and commerce committee are doing to-day, you will learn a great deal of truth. I suggest that the government adopt that policy with at least two or three of these committees on reconstruction, and I guarantee that within a year they will have a great deal more light on this vexatious problem of distribution than they have to-day.
The governor of the Bank of Canada in his annual report has indicated what the possibilities would be if we began to create money

to represent the tremendous capacity for production which we shall have immediately at the close of the war. I commend to hon. members the remarks made by the governor of the Bank of Canada on page 11 of his annual report to the Minister of Finance (Mr. Ilsley). He says:
By the end of 1943 the gainfully occupied population had risen to approximately 5,100.000 but about 1,900,000 of these were engaged in the armed forces, in supplying the weapons of war, or in producing the food required for special war-time exports. The number available to meet civilian needs had therefore fallen to about 3,200,000, but at the same time the average standard of living had risen materially and was probably higher than it had ever been.
How serious that is, and imagine what will happen when the others return and are producing goods themselves!
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. THOMAS FARQUHAR (Algoma East):: Mr. Speaker, in taking part in this debate I wish to say, first, that I am sure we all greatly appreciate what has been accomplished by the Minister of Finance (Mr. Ilsley). His accomplishment has made it possible for Canada to carry on a war effort which has brought praise from outstanding men in all the allied nations. The Minister of Finance has indeed proved himself a great financier. To raise eight billions of dollars loaned from the people of Canada would appear almost an impossibility for a country' with the population that we have, and it is indeed a great achievement. Notwithstanding this, the people of Canada are better off financially than they have ever been. I am informed that the savings accounts to-day are two and a half 'billions as compared with one and a half billions when the war began.
The one dark spot in Canada's war effort has been the lack of cooperation the government has received from some members of the opposition parties. It is indeed a sad thing in time of war that men cannot forget their politics and give the government some cooperation. We have been here now for five months and it looks as though we shall be here two or three months longer, when many of us should be at home doing more useful work. I am sure the people of Canada do Aot appreciate the actions of some members of the opposition parties.

The Budget-Mr. Farquhar
I wish to speak to-night for a short time on what is, to my mind, a dangerous policy which is being advocated in this country, at the present time, and the seriousness of which I feel is not full}" realized. I refer to the policy advocated by the Cooperative Commonwealth Federation party as it affects the country generally and especially as it affects the farmers and organized labour. Some members of the C.C.F. party go so far as to deny that their policy includes the socialization of farms. Whether that is their policy or not, I think we have sufficient evidence to prove that at least a great many workers and organizers of the C.C.F. party are advocating and admitting frankly that the nationalization of farms is C.C.F. policy. A short time ago I met a C.C.F. organizer and he frankly admitted to me that the socialization of farms was their policy. I said to him, "You are not frank enough to admit that when you go into a farming community." He replied, "Well, that is our policy." A short time after that-and this happened recently.-I met another C.C.F. organizer and I put the same question to him. He said, "Well, we do believe in collective farming," and he admitted that this eventually would mean the socialization of farms.
Again, a prominent man, Mr. Levans, member of the legislature for Woodbine, Toronto, is reported to have said, at a banquet in Orillia, that the farmers could remain on their farms during their lifetime but could not sell or will their farms to anyone else. And again, we have the leader of the C.C.F. party who, when asked in Maclean's magazine the question, "Do you believe the state should operate everything?" answered, "Practically everything." Well, as farming is Canada's greatest industry, surely "practically everything" includes farming.
Any man to-day who discusses this question with C.C.F. workers will agree with me that they frankly admit that this is C.C.F. policy. Therefore, whether some members of this house agree to that or not, nevertheless the rank and file of the C.C.F. party do believe in it and frankly admit that it is C.C.F. policy. Again, the leader of the C.C.F. party is quoted in Maclean's as saying, when asked the question, "Will the. C.C.F. party control labour?"- "Yes." Just how does the C.C.F. party intend to control labour? It will control labour by making labour organizations ineffective.
I am sure we all agree that over the last half century labour has done a great deal in bringing about better working and living conditions. Labour, it is true, has had a hard fight over the last half century to accomplish what it has. We all agree that labour has done a great deal for the labouring man. It is true
that labour has not always had good leadership. Labour has often been wrongly advised, but that is no argument against labour policies. That also has been true of organized industry. Industry has also very often had very bad leadership, which has led to a great deal of trouble.
Organized labour and organized industry are learning that if they are to avoid the experiences of the past they must have a better understanding, and that can be brought about only by better cooperation, union recognition and compulsory collective bargaining. If the C.C.F. policies were put into effect, there is not a class in Canada which would be so seriously affected as organized labour. All the hard work they have done over past years, everything they have accomplished, all the sacrifices they have made would be lost effort. It could not be any other way where industries were owned and operated by the government. Is there a man in organized labour who believes that if the government owned all industries in the country the government would allow him to continue to organize and to continue to strike and to defy the government? I wonder if any man who belongs to organized labour believes that. If he does he will learn that he is making a great mistake. When I make that statement I think I hear someone say, "What about industries which are already being operated by the government?" That is easily explained. Take, for instance, the railways. One is owned by the government and another by a private company. The men who are working on these two roads belong to one organization, and just as long as the men who are working on the government-owned road belong to the same organization as the men who are working on the privately-owned road they must receive the same consideration; but if the government took over all the railroads in Canada that would place them in a much different position. If the government took over all the railroads and the men went out on strike what would happen? Well, what would happen would be just what was about to happen recently in another country where there was talk of the government taking over the roads. They would put the officials of the company in uniform and turn the operating of the roads over to the national defence department. No government in power dare allow any organization to defy it. Just as long as any government is operating an industry, labour has not its freedom. I thought I heard someone say that if the C.C.F. were in power they would not treat labour in that way; that they are too much interested in organized labour to treat it in that manner. That may or may
The Budget-Mr. Farquhar

not be true. It matters very little whether it is true or not because governments come and governments go. Any government that would take office after the C.C.F. government were in power would have to continue to operate the industries taken over by the C.C.F government. They could not hand them back again to private companies. They would have to continue to operate those industries. The government following the C.C.F, might possibly be a Progressive Conservative government, although that is not likely. It might be a Social Credit government, or it might be a Bloc Populaire, or some other form of government; but, as I say, it matters not what government succeeds a C.C.F. government, it must continue to operate the industries that are taken over by the C.C.F. government. Is organized labour going to hand over its organization to the mercy of any government that might come into power? I wonder. I wonder whether labour has stopped to realize just what might happen to it under any government which might come into power? They would be entirely at the mercy of the government because they would not have their freedom under government ownership. I have spent many years of my life working in the interests of organized labour. I have taken part in long and bitter strikes, one strike lasting nine months, which won for the miners of British Columbia the first eight-hour day that they ever enjoyed. An eight-hour day is a long day for miners to work underground in the conditions under which they have to work. I know something of the long and bitter experience that labour has passed through, and I know something of the sacrifice they have made in order that they might better their working and living conditions.
As one who has the cause of labour at heart I appeal to organized labour to let no government control their organization to the extent it would if it owned and operated the industries in which they are working. I would recommend to labour that they think over very carefully the recommendations for the post-war world issued by the American federation of labour, which reads as follows:
Free enterprise is an essential part of the democratic way of life. We believe wholeheartedly in free enterprise as an essential in personal freedom. Free enterprise and free labour are interdependent; neither can last without the other.
Those are not my words, Mr. Speaker. This is a recommendation passed by the American federation of labour and sent on to their locals. It is a true statement. Labour can never be free while the government of the country owns and operates the industries in which labour is

working. I appeal to labour representatives in this house and in the country to think this over very seriously. Labour cannot retain its freedom if the industries are operated by the government and controlled through state socialism.
Another danger that I see is in the class of men who are getting into the C.C.F. party and who will eventually control it. I have been through the mill and I see clearly what is happening in the ranks of the C.C.F. party to-day. Perhaps some of the older members of the house will remember the days of the
O.B.U., the One Big Union. I belonged to the Sandon branch of the western federation of miners in British Columbia. It was a strong branch and had a very large membership. We owned our own block, a large one, containing a large auditorium and fraternity hall. We had stores rented on the ground floor. We owned our own hospital employed our own doctor and nurses. Members of the One Big Union worked into our organization. They became so numerous that they outvoted us and took our property from us. That is exactly what is happening in the C.C.F. today. The class of men who are coming into the C.C J1. party to-day will eventually and before very long control and dictate the policies of that party. It is all very well for the leader of the CCF. (Mr. Coldwell) to make the statement that he quite often does to the effect that they are not going to take in progressive labour, which is communist. I wish to tell the leader of the C.C.F. that they are taking them in by the hundreds. And they cannot prevent them from coming in. They will do exactly what they did in our organization. Very shortly they will control and dictate the policies of the party. No one realizes that better than the leader of the C.C.F. party. No one sees that danger coming more clearly than he does. If he continues in the moderate way he has spoken from time to time, very soon that class will be asking him to step aside and make way for a more radical type of leadership. Do not misunderstand me,. Mr. Speaker. I am not doubting the sincerity of the leader of the C.C.F. party. Many of the principles they advocate I have supported all my life. What I do oppose is the method by which they are trying to bring those principles into effect. They talk about destroying monopolies. You cannot destroy monopolies by creating greater monopolies, and that is exactly what the C.C.F. would do if they came into power. The nationalization of industry will create the greatest monopoly Canada has ever experienced. We know very well how this has worked out in other countries, and we know it can work out in only one way in any

The Budget-Mr. Itoss (Souris)
[DOT]country. I believe in a certain amount of ' control. I believe that anyone who tries to take advantage of anyone else should be controlled. I trust that this war has brought us to a greater realization of our duty toward our fellow men than we have ever had before. You will remember how men piled up millions during the last war. That has not been done [DOT]during this war. I hope that the day of the millionaire is gone forever, and that never again will the moneyed interests of this country control its affairs, as they have in the past. Yes, Mr. Speaker, I believe in control where necessary, but I do not want to lose my freedom through state socialism.
Only one class will benefit under a C.C.F. government. I refer to the class that never did have and never will have any stake in this country unless they get it from someone else. I refer to the class that has fought labour organizations ever since labour began to organize. I refer to the class against whom labour men have had to picket in order to prevent them from taking their jobs when they were on strike. I refer to the class who believe that Canada owes them a living and that it is not necessary to work for it. That class now see an opportunity of getting something for nothing, and they are going to take advantage of that opportunity if they can.
In conclusion, Mr. Speaker, I say that I stand for a square deal to the labouring classes, whether on the farm or in the factory. Let us beware of any party which advocates government ownership of farms or factories. If that policy should be put into effect it will be the saddest day labour in Canada has ever experienced.


Mr. J. A. ROSS (Souris):: First of all, Mr. Speaker, I should like to express my appreciation of the manner in -which the Minister of Finance (Mr. Ilsley) presented his budget proposals and the estimates of our cash requirements for the coming year, amounting to some six billion dollars, an all-time high in the history of this county. We realize that the hon. gentleman has a very difficult task, and I /should like to express the hope that his health may be spared while he has this task in hand and, of course, for a long time after that,
I disagree in principle with several of the proposals enunciated by the minister. I should like to compliment my colleague the hon. member for Dufferin-Simcoe (Mr. Rowe) who, as official critic of the budget, dealt -with it this afternoon in an able manner. I wish especially to endorse his tribute to the gallant men and women of the armed forces who today are doing such a magnificent job for us in attempting to preserve all the worth-while
things of our way of life, and also to those people on the home front in this country, engaged in agriculture and industry, who are so ably supporting our fighting forces.
I believe there is a great deal of wasteful extravagance in Canada at the present time under this government. As an example I mention the wartime information board, which I believe spends approximately $1,000,000 annually. A great deal of the information it distributes is political propaganda, some of it false and misleading. Someone may say, "Give us an example of that." I would refer anyone interested to page 26 of the January, 1944, issue of "Canada at War" dealing with the men available in the Quebec military district between the ages of eighteen and forty-five. That information is not correct. I would mention also page 55 of the May, 1944, issue of the same booklet, which contains false information with respect to Japanese nationals in Canada. Both these matters have been dealt with already by other hon. members.
During these years of war huge amounts of money have been spent in the purchase of properties for industrial plants, air training centres and so on. Apparently there has not been a uniform system of valuation in connection with the purchase of these properties. There are other, larger items with which I shall deal at a later stage of my remarks. In the matter of income tax, I am definitely of the opinion that exemptions should be increased to at least $800 for single persons and $1,600 for married men. I believe also that a farmer and his wife, who helps him on the farm, should be granted exemptions on the same basis that they are granted to the man and his wife who work in industry or any other occupation. The present discrimination in this respect is wholly unjustified. In the past the receipts from all live stock sold within the calendar year have been classed as income, which is very unfair. In the case of breeding herds especially I believe a percentage should be allowed as capital. In connection with the power required to operate a farm, the money received from the sale of any horses is classed as income, while a tractor is allowed as capital, along with other equipment, I have never been able to see the justification for that discrimination. Then the income of farmers should be averaged over a period of years. This is something for which I have asked during every budget debate since I came here in 1940. Last year the minister announced that the income of a farmer might be averaged Over two years, but I believe the period should be six years so that losses in certain seasons could be offset by profits in others. This is now done

The Budget-Mr. Ross (Souris)
over a five-year period in Great Britain, where the hazards of farming are not normally as great as in Canada.
Another point I should like to emphasize is that if a person overpays the amount of tax due, no interest is allowed on this overpayment when the refund is made. On the other hand, if a person inadvertently pays less than he should, the department assesses a rather severe penalty plus interest. Surely, as a matter of justice it should work both ways; if the government have the use of the money they should allow interest on making the rebate.
The present tax return form is too complicated and should be simplified in some manner. It is altogether too difficult for the average taxpayer.
Under the wartime prices and trade board we hear a great deal about agricultural subsidies. I maintain that in reality these are consumer subsidies, and that in many cases the primary producers are carrying much more than their fair share. Especially is that true in respect of beef and grain.
As an example of ceiling prices and controls I would cite that of fuel wood. We had an example shown to us where the ceiling price for poplar wood at the head of the lakes in Ontario was $7.50 a cord. In Manitoba for the same wood the price was $5.50 a cord, including $1 bonus. There are corresponding differences in respect of other types of wood. This wood was shipped from the head of the lakes to Winnipeg with a freight rate of $8 a cord, as paid for through government subsidies. This wood, which cost $15.50 a cord, was shipped through a wooded area in Manitoba and sold in Winnipeg for $5.15.
That is one glaring example of our present controls and inefficiencies. The secretary of agriculture of the United States states that in that country a peace-time farm production of fifty per cent more than pre-war level is possible. Canada's basic industry has often been stated to be and actually is agriculture. Prosperous basic industries are essential for the prosperity of the nation. Agriculture is an industry engaged in the manufacture of foodstuffs. It is an industry which has approximately 735,000 branch factories across Canada, with each factory facing problems similar to those found in all other industrial enterprises. The farmer, like the manufacturer in the operation of his factory, is faced with problems of management, labour, working capital, adequate power supply, overhead costs, finance, factoiy efficiency, sales promotion and markets.

It is in an examination of these that we get to the root of our agricultural problem. This industry of agriculture embraces some 3,163,280 people who live on the land. A farm, whether small or large, is an individual capitalistic enterprise. I think it is important that we should appreciate that situation at this time. During the past year agricultural production, with an approximate decrease of twenty-five per cent in man-power, had well over a forty per cent increase in foodstuffs, all of which are required in the prosecution of the war. The war supplies furnished to Great Britain under Mutual Aid have included all types of supplies, procured for Great Britain through Canadian government departments or agencies. They bought huge tonnages of wheat, flour, bacon, beef, cheese, eggs and various other special farm products. Mutual Aid has been extended to cover Canada's contribution to the united nations relief and rehabilitation administration, known as UNRRA. This will take us into the post-war period.
Many people ask, then, what about the future of agriculture? Nutritional standards, and the improvement thereof, will create greater demands for agricultural foodstuffs. Nutrition surveys carried out across Canada have shown serious diet deficiencies among more than half the families of Canada. Half a million Canadian children are undernourished. It is now internationally recognized that there must be increased consumption of adequate quantities of nutritional food. Agriculture has suffered more than any other activity in Canada from lop-sided development. The Sirois commission report states definitely that from 1896 to 1913, under a vigorous immigration policy by the governments of the day, assisted by land companies and railway companies, a tremendous expansion took place in territories of Canada. Settlement took place without discrimination. The territories settled grew from about 10,000,000 acres to some 70,000,000 acres in that period. The production of wheat was increased from approximately 20,000,000 bushels to some 210,000,000 bushels during that period. Since that time production has again almost doubled.
During that period of time no encouragement was given to industrialists and tradesmen to come to this country and develop industry. We have greater undeveloped natural resources in Canada than are to be found in any other country of the world. We have great facilities for the development of industry. If in this country there had been a balanced programme of immigration and development we would enjoy a market within Canada for very much of our agricultural production.

The Budget-Mr. Ross (Souris)
For example, statistics prove that for the year 1937 the family of the average industrial employee consumed agricultural products to the extent of $409.35 annually. These figures for to-day would be considerably higher. On this basis, if we had 5,000,000 heads of families employed in industry there would be an immediate home market in Canada for our present agricultural production.
I am one who thinks that in a country such as Canada, with our vast undeveloped natural resources, our very cheap electrical power and the possibility for further development of cheap electrical power, we must have, during the generation following the end of the present war, a much greater development of peace-time industry. This would create employment for all our ex-service men and for every able-bodied Canadian willing to work. It would also necessitate an immigration policy on a selective basis for industrial development-not land settlement, as in the past. This could be had at a greater remuneration for employees than has been customary in the past history of Canada.
In that great and comparatively new and cosmopolitan country to the south of us, the United States of America, we find an example where, prior to this war, many of our young and trained men left Canada and received much greater remuneration in the United States than they could receive in this country, their native land.
In this respect there is a real field of work for the new Department of Reconstruction. I trust it will follow the suggestion through. Many of the new Canadians, or those of foreign ancestry, have splendid war records, when compared with the records of many native-born Canadians. The real native-born Canadians are those of French Canada, or Quebec. French Canada is approximately 300 years old, yet it is still a young and vigorous country. These people are possessed of material, economic and spiritual ideals which are worth fighting for, and which would develop a strong and united Canada. They, and more especially the generation for twenty-five years prior to 1939, have received false or improper leadership with respect to citizenship in this country.
In this connection I should like to quote from a speech by the Prime Minister (Mr Mackenzie King) delivered in this house on March 30, 1939, and reported at page 2419 of Hansard. It states:
Canada, it is contended, is not a country of unlimited powers; it has not the capacity to stand indefinite strains. We have tremendous tasks to do at home, in housing the people, in caring for the aged and helpless, in relieving drouth and unemployment, in building roads,
in meeting our heavy burden of debt, in making provision for Canada's defence, and in bringing our standards of living and civilization to the levels our knowledge now makes possible. There is no great margin of realizable wealth for this purpose; we must to a greater or less extent, choose between keeping our own house in order, and trying to save Europe and Asia. The idea that every twenty years this country should automatically and as a matter of course take part in a war overseas for democracy or self-determination of other small nations, that a country which has all it can do to run itself should feel called upon to save, periodically, a continent that cannot run itself, and to these ends risk the lives of its people, risk bankruptcy and political disunion, seems to many a nightmare and sheer madness.
Then in the same speech, as reported at page 2426 of Hansard, he said:
One strategic fact is clear: the days of great expeditionary forces of infantry crossing the oceans are not likely to recur. Two years ago, I expressed in this house the view that it was extremely doubtful if any of the British dominions would ever send another expeditionary force to Europe.
That was the Prime Minister speaking a few months before the declaration of war. He went on to say:
One political fact is equally clear: in a war to save the liberty of others, and thus our own, we should not sacrifice our own liberty or our own unity. Planning and coordination would be essential, but the necessary coordination could be made, and if this government were in power it would be made, without sacrificing those vital ends and conditions of our existence. Profits could and would be rigidly controlled, and profiteering suppressed. But men's lives and men's wills cannot be put on the same basis as goods and profits. The present government believes that conscription of men for overseas service would not be a necessary or an effective step. Let me say that so long as this government may be in power, no such measure will be enacted.
As I pointed out, that was a few months before the declaration of war. In 1939 there was a declaration of the same policy that had been practised by the same leader and some of his cohorts for twenty-five years, while this generation was growing up. Little wonder that when the thirty-day training scheme was introduced during the early stages of this war the Minister of National Defence (Mr. Ralston) said that this was necessary in order to impress Canadian youth with the duty of citizenship. This generation, especially those of the province of Quebec, believe that they have been deceived. There are many splendid fighting troops from Quebec. I prefer to believe that recent events have so challenged the people of this nation that the views expressed by that fighting padre of French Canada, Father Armand Sabourin of Les Fusiliers

The Budget-Mr. Ross (Souris)
Mount-Royal, are more indicative of what all people are thinking across Canada to-day. He said on his return from Dieppe:
We wanted to prevent Hitler from reaching our shores to-morrow to destroy our faith, our tongue and our institutions. We crossed the channel to fight with England for Canada. If I am a free man to-day in my country I owe it to England. The Anglo-Protestant government recognizes my rights as a French Canadian and gives me complete freedom of religion and of speech and respects my traditions. That is why we went to Dieppe.
I believe that with proper leadership French Canada would do their part in creating and developing a great united Canada. I believe that is yet more than possible.
We have in Canada to-day a serious manpower problem. A few weeks ago the Minister of National Defence assured us that we had adequate reserves for our army to meet battle *casualties. Those are his exact words which may be found in Hansard. To-day under his authority the chief recruiting officer of the Department of National Defence says that we are in urgent need of forty-eight thousand reinforcements for overseas. He attempts to shame men from industry and other vocations into enlisting. At the same time the farmer has to do without help. According to the Minister of Labour (Mr. Mitchell) we are
196,000	men short in industry.
In the face of all this we have an army of approximately 75,000 now in service for the defence of Canada. This home army represents a cost of $150,000,000 a year. Seventy-five thousand men are kept out of agriculture, out of industry, out of the war, out of everything but the public treasury. The farmer and his wife along with other citizens of Canada work many long hours in order to pay for this. The government has access to information as to where these men are required most, and yet they, the responsible ministers, apparently refuse to act. In fairness to some of the men of the home defence army to whom I have talked I think I should say that they make the statement that the responsible ministers of the government have available to them certain information. If they or the government refuse to state and take proper action as to where these men can best serve, that is their problem.
We have the strange anomaly of several ministers on the front benches, family men . with good records in the last war, under the cloak of political expediency, as many people [DOT]claim, submitting to the whims of their leader the present Prime Minister on man-power. We have had set forth by two great world leaders. Prime Minister Churchill and President Roosevelt, the Atlantic charter for the 
four freedoms. That is what we desire and what we should strive for.
Mr. Speaker, I take second place to no man in my dislike of war. Neither do I take second place to any person with respect to my interest in the welfare of humanity. At the same time I trust I have some realization of my duty as a citizen of Canada. I shall support the amendment moved by my colleague, the hon. member for Dufferin-Simcoe (Mr. Rowe), which reads as follows:
That all the words after "that" be struck out and the following substituted therefor:
"this house regrets-
(a)	that no adequate steps have been taken to simplify the forms and modernize the methods of taxation;
(b)	that no effective action has been taken to grant a measure of relief to the men and women in the lower income brackets by raising the exemption in income tax for single persons to not less than $800 per annum and for married persons to not less than $1,600 per annum;
(c)	that no provision has been made to encourage greater war-time production by exempting overtime pay from income tax;
(d)	that sufficient provision has not been made for the elimination of the inequities presently existing with respect to agricultural taxation:
(e)	that no adequate provision has been made to ensure increased post-war employment through the discovery and development of metallic and non-metallic mineral resources;
(f)	that the government has failed to make effective the full mobilization of our financial, industrial and material resources, as well as our man-power, but is maintaining a so-called home defence army, at a cost to the taxpayer in excess of $150 million per annum, at a time when the need for men for army reinforcements, for farming and for industry is so urgent."
I trust that we shall not forget that at this moment young men are fighting for our way of life and for this parliament. I think that should at all times be our first consideration. As my colleague pointed out this afternoon, many of these gallant young men will not return to us. Many others will return maimed for life. They and their dependents must be our first care at all times.
Just before I close I should like to make some reference to procedure in this house. The statement has often been made that the length of the session depends on the opposition. I have taken some pains to check Hansard on certain points. I remember one to me rather disgraceful day in this house, Tuesday, April 25, when we wasted the entire day on the report of the special committee on the revision of standing orders of this house. We made no progress whatever. Some twenty members on the government side spoke in that debate, three Progressive Conservatives, five C.C.F., three Social Credit and two others. Fifty pages of Hansard were filled on that

The Budget-Mr. Dorion
day, or approximately 5,500 lines. Of this amount 4,463 lines, or over eighty per cent, were taken by the government speakers; 449 lines by the Progressive Conservatives and 354 lines by the C.C.F.
Then we had a motion from the Prime Minister to the effect that Wednesday sittings of the house were out from February 22 to June 14, 1944, in spite of most strenuous opposition from all opposition parties in the house.
We have also had the banking and commerce committee sitting for some twenty-seven days, and almost the entire time of that committee has been monopolized by two members of the government party.
There are many other figures I could give of the time that has been taken up this session, but I will content myself with saying that government party members are the ones who are responsible for our not making better headway at this time. In these critical days our first thoughts should be with the gallant young men and young women, and their dependents, who are doing so much for us to-day.


Mr. FREDERIC DORION (Charlevoix-Saguenay):: Mr. Speaker, if I happen to speak at this stage of the debate, it is not, Mr. Speaker, because I want to be labelled as leader of any group, and on this point I should like to tranquillize the hon. member for Trinity (Mr. Roebuck) who, on February 1, in the course of the debate on the speech from the throne, mentioned the fact that he was speaking after many leaders, some of them, he said, leaders of "one man" parties. As I had been speaking before him, there is no doubt that his remarks were directed to me as well as to others who had spoken before him.
I believe the hon. member for Trinity is an able lawyer, and he must be aware of the fact that there can exist some independent members who do not need blindly to follow a leader, being able to think for themselves.
I happen to be here as representative of constituents who sent me to this house to represent their personal views and not the ideas of a party.
Since the beginning of this session we have discussed many projects relating to social security. Every group, and I should say every hon. member of this chamber, has had an opportunity of expressing his personal views on the different post-war projects, many of which have been discussed at great length. This goes to prove that everybody is anxious to look forward, and endeavour to prepare to his utmost capacity the future of our country.
There is no doubt that this sentiment is shared by the whole population, and especially by those who, at the present time, are engaged in the gigantic struggle, of which, thank God, we hope to see the end before long.
I should like to draw attention to the fact that, for the last few years, and especially during this session, many declarations made by persons in authority have led us to believe that this country is moving more and more toward greater centralization. All the new projects brought before the house for the purpose of social security bear in themselves this very danger of a greater centralization.
We must not set aside and we must never forget the basic principle which is the foundation of our national life and by which this parliament is bound to give its fullest respect to the constitution under which we live. We must never forget that the provinces constituting the Canadian federation also have their rights under our constitution, and my contention is that none of these new projects can produce good results if the provinces do not share the burden. The provinces should be called upon to collaborate with the dominion government, but should never be called to give up their own rights. If we refer to some declarations, we come to the conclusion that this government wants more than a collaboration on the part of the provinces.
From the discussions that took place on bill No. 82, for the establishment of a new Department of Reconstruction, I should like to quote a few sentences, which will show that I am right in scenting the danger which I have just mentioned. On June 20, in the course of the debate just mentioned, I find at page 4009 of Hansard the following words:
Mr. Gillis: They are always prepared to do it, but they always throw up a straw' man so that we cannot get through it, with the cooperation of the provinces. You hide behind the British North America Act.
The answer given by the Prime Minister (Mr. Mackenzie King) was as follows:
I do not wish to interrupt my hon. friend, but he has referred to New Zealand. I wonder if he has brought out the point that they have only one government in New Zealand, a unitary government, which is able to do things. If there v-ere only one government in Canada, the lower age of sixty-five would now be in force.
Later on, in the same debate, at page 4013 of Hansard, I quote from the parliamentary assistant to the Minister of Labour (Mr. Martin):
But this government has not overlooked the desirability of taking unto itself powers that now reside elsewhere. It attempted that in 1941, the first real attempt ever made in this country, by having a conference with the prov-
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inces in this very chamber, to try to bring about some of the recommendations of the Rowell-Sirois report, with the idea of stream-lining, if you like, our legislative machinery, with the idea of rendering our legislative powers more efficient. Then, not having succeeded in that conference, it is now proceeding to another; and as the Prime Minister (Mr. Mackenzie King) said to-day, steps and preparations are now under way for the holding of another conference between the dominion and the provinces.
I am afraid that such declarations constitute the best encouragement to the very few people who seem sometimes to favour a movement of separatism in our country.
I wish to state, however, that the parliamentary assistant to the Prime Minister on the same occasion expressed some views which are worthy of mention, and I should like to regard them as the guiding declarations of the next interprovincial conference. I quote from page 4062 of Hansard:
I think it must be evident from the attitude taken so far by the dominion and the members of the government that the conference will not be entered into with any thought of endeavouring merely to secure the transfer of constitutional and financial power by one side or the other. The conference aims to see what is best for the people of Canada, how their needs can be met and who can best meet them; and if, as I expect, the provinces meet the dominion in that spirit, we can look forward to a satisfactory arrangement to deal with all these questions.
These last words are worthy of mention, and they should be inserted in the agenda of the proposed conference.
Mention has been made quite a few times by the Prime Minister and others during this session that this interprovincial conference would be called soon. This conference Was announced by the Prime Minister in the very beginning of the session, and a few days ago he repeated his announcement and told the house that this conference would be held in a month or so.
There is no doubt that the people of this country have the right to ask if the purpose of this interprovincial conference will be the adoption of the Rowell-Sirois report which was shelved in 1941, when the premiers of the nine provinces met in Ottawa. If the purpose of the government is such, I contend that it should be well specified, so that the representatives of the provinces will know exactly what they are called for, and beforehand they can secure from their respective constituents their desires and yearnings.
I do not see any need for central government to infringe upon provincial rights to pass legislation even in matters of social security.
We have a very good experience of successful legislation in which the provincial and central governments collaborate; I mean the old age pension and other similar legislation.
[Mr. Dorion.)
The matter of provincial autonomy is very serious and should be dealt with extremely carefully.
Ever since confederation there has been a gradual and continuous movement for centralization of authority in the federal parliament. Many have been the conflicts between the federal and provincial governments in respect of jurisdiction.
We have to admit that the provinces are the real historic units around which centres all the glory of our history, the remembrance of early settlement and adversity', and the affection that clings to the family. The provinces, in the immediate sense, lie nearer to the hearts of most of our people than does the larger but more abstract conception of the dominion. This is all the more true, inasmuch as the provinces of Canada, if we take the prairies as one, represent actual units of history and physical units of geography. Hence the whole setting and background of our Canadian provinces seems to indicate them as the proper form of our natural life, separate groups of people each doing things in their own way and letting the others do the fame.
The case for provincial autonomy is made still stronger when we remember that one province, the oldest and the largest, Quebec, is for its French-Canadian people almost everything; and for some of them quite everything. It is almost all that history has left them of a regime that was their own, of the language and religion of their mother country.
In an article published in the Financial Post of January 8, 1944, written by Stephen Leacock, I read this:
The province of Quebec, wrote Andrew Macphail, is the last refuge of common sense in North America. We contrasted, . too, the tyranny of the Ontario Sunday, with the wholesome outdoor Sunday of the priests and their seminary scholars playing games together. We admire that quiet contentedness of the French-Canadian habitant and its contrast to the eager haste, the get-rich-quick, the quest-for-money of the restless English. We liked the stories that Doctor Drummond told us of Jean-Baptiste coming home' again from the States, of Louis Hemon's far-away and long-ago picture of the world of Marie Ohapdelaine. Around French Canada hung all the romance of history, and the respect for a people happy in their own lot. Above this level of the plain life of simple people was the pride felt by the educated and academic classes of society, living in a dual culture, in drawing upon two languages and two great literatures, on the traditions of two great nations.
This picture is true for the whole province of Quebec, and more particularly for the constituency which I have the honour to represent.

The Budget-Mr. Dorion
In the course of my trips across this vast area of over 300,000 square miles, it has been a great pleasure for me to meet citizens of all groups and all classes, and1 I must say, without fear of contradiction, that the people living in Charlevoix-Saguenay are most faithful, loyal and honest. They love their country; they love the soil from which they draw their living; they love the small piece of land where they raise their large families, praying the Almighty to be preserved from the evils that are spreading all over the world.
They are glad to collaborate with their fellow-citizens and give their contribution toward making this country as beautiful as possible, and a place where one can live happily; but they, in turn, need the collaboration of the governments, and the greatest of these needs consists in the establishment of better means of communication.
I have already said, and I will repeat it as long as the authorities refuse to hear my appeal, that the only means of developing this vast section of our country would be the construction of a road along the north shore of the St. Lawrence. We have seen in the war appropriations that this government is spend- . ring vast sums to build some roads in the western part of the country, and I am eager to see the day when the government will look up to the eastern part as well.
I said that our people live quietly and happily. I stated that they want to collaborate with their fellow-citizens, but they do not want to be replaced by foreigners of all descriptions. That is the reason why they are opposed to opening wide the doors of our country to facilitate immigration. On this question, I already had the opportunity on June 5 to say a few words in this house, and I should like to complete my remarks. Since this question of immigration will, no doubt, be one of the most important in the post-war period, I hope it will be discussed in every quarter with the broadest-minded spirit.
We very often hear some figures mentioned about the possibilities for Canada to absorb many million immigrants after the war. While listening to such declarations, I have always wondered if they were made in good faith, and if those who made them knew exactly what they were speaking about. One of the many reasons advanced for accepting immigrants in Canada is the contention that so many million immigrants will become so many million consumers; but I never heard that such figures were based on serious inquiries, and my first yioint is that the government, before allowing these immigrants to enter Canada, should make a complete survey throughout the *country to ascertain whether there is enough
space to absorb such immigrants. I challenge anyone to deny the necessity of such a survey being made with the least possible delay. Doubtless, we cannot compare our density of population in Canada with that of any other country, and I think it is stupid to contend that Canada is able to receive so many million immigrants on account of her vast area. The contentions that are based upon this comparison of areas are not serious ones and are made by those who ignore, as I already said, what they are talking about. In fact, everybody knows that in our country there is only a strip of land habitable, so that we easily come to the conclusion that available space throughout Canada is more limited than it is claimed to be in some quarters. The logical attitude to take would be not to accept immigrants before ascertaining that we need them, and before making a judicious choice of them.
I think nearly everybody in this country is willing to have new citizens come from abroad, but they also expect these newcomers to collaborate in building up a greater country, and that they will not be a burden for Canadian citizens.
Since we may not be afforded the time to discuss at full length the problem of immigration when the; civil estimates of the Minister of Mines and Resources (Mr. Crerar) come before the house, I take advantage of this opportunity to express my views on this policy. I wish to state that it would be much better for us to keep Canadian-born citizens in Canada, rather than replacing them with newcomers. I am mentioning this, because if we refer to the "Canada Year Book" of 1942, we, see at page 91 a complete summary of the movement of the Canadian population for the last twenty years. 'It is entitled:
Summary of births, deaths, natural increase and immigration, calendar years, with estimated population as at June 1, 1921-40.
On June, 1, 1921, the population of Canada was 8,788,000. From 1921, to June 1, 1940, 797,036 immigrants came to Canada; in the same period of time, we had 2,432,609 births. Therefore, had we kept our newly-born Canadians together with the immigrants who came to Canada, our population should have increased to 12,017,645. According to the summary just mentioned, we see that on June 1, 1940, our population was 11,422,000; that is to say, about 600,000 less than we should have had. As mentioned, we received 797,000 immigrants and we lost 600,000 Canadian citizens. Have I not'the right to ask, where is the benefit in spending such large amounts of money for immigration when we cannot save our own citizens? To explain these figures, I must say that the ones which I have just read about newly-born Canadians are given after having
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deducted the number of deaths. Is it not right to say that our money would be much better spent for the safe-keeping of our own citizens? I remember that, in previous years, a Canadian citizen from the province of Quebec who went to establish himself out west, had to pay more than immigrants coming from central Europe to the same place.
I said that this question of immigration was a very important one, and I base my contention on the report of the Department of Mines and Resources for the year ending. March, 1943. At page 175 of this report, I read the following sentences under the title, "Post-War Immigration". I quote:
Many suggestions are being received as to post-war immigration. These are being carefully examined and filed for future reference. It is everywhere recognized that Canada must, first of all, deal with the reestablishment of her own service personnel and their dependents and during that period turn the Canadian war industry to peace-time pursuits. The magnitude of this task cannot be known until the war is over.
Those best able to form an opinion agree that tens of thousands of the war-oppressed people of Europe will look to the western world for new homes when war has ceased. Few of these are likely to have funds either for transportation or settlement and many may require to be built up physically before being fit for transfer from Europe. How many and what type of settlers, especially those without capital, will Canada be able to absorb with benefit to the newcomers and to the dominion. Will the assistance given by the allies to the suffering millions of Europe after the war include financial assistance for migration and settlement?
We are fighting the most terrible war the world has ever known. We have spent millions and billions of money. Our young men have given their health and even their lives and all these sacrifices to prevent the invasion of our country and to epable our citizens to enjoy an enduring peace. I wonder if these tens of thousands of people of Europe, as mentioned in the quotation I just made, will not constitute what I would call a "pacific invasion" of our country with the possibility of the same result as if the invasion proper had taken place? Are we to allow all kinds of people to enter into Canada and let them spread among our population the ideologies and doctrines that lie at the base of the present war in Europe? I am amazed to see in an official report of this government a statement like the one which is included in the quotation I first read and which is as follows: How many and what type of settlers, especially those without capital, will Canada be able to absorb with benefit to the new-comers and to the dominion?
Is it not ridiculous to permit the entry into Canada of immigrants who will not even

be able to pay their own transportation and who will be nothing but a burden for our people?
Another very important aspect of the same question comes from a declaration made by the Prime Minister, on May 22, after his return from England, and I quote from pages 3099 and 3100 of Hansard:
I should like to add a further word as a result of what I have heard and seen and felt. I do not believe that this war is going to end the conflict between the different classes and races of men. The enemy of to-day must be completely destroyed, but forces of evil have been let loose in this world which it is going to be difficult indeed to bring to bay. These forces of evil are going to continue to destroy all that is best for mankind, I am fraid, for many days, possibly years, after the main struggle is over. In all our deliberations here, as I am sure will be the case in the deliberations of all other assemblies of free nations, we must never lose sight of the fact that our greatest work may still lie ahead in seeking to trample under foot and slay the dragon that to-day is seeking to destroy humanity itself.
I submit, Mr. Speaker, that the Prime Minister has said too much and too little. As far as I am concerned, I should have liked to learn from the Prime Minister what are the forces of evil to which he referred? They must consist of something untold; they must emanate from somewhere other than from our enemy territories, because otherwise they would be destroyed as our enemies will be, and we would not have to fear those evils, once the war is won. These forces of evil must be threatening from outside Canada, since every precaution has been taken to overcome subversive elements in Canada.
Therefore we must believe, first, that those forces of evil actually exist, since the Prime Minister mentioned them.
Second, they must come from outside, because otherwise our government would not be fulfilling its duty by allowing any subversive movement to flourish in our midst.
Third, they cannot be found in enemy territories, since the Prime Minister stated that they will continue to destroy all that is best for mankind even after the defeat of our enemies. Where do they come from? How could they penetrate our country, and what would be the best way to defend ourselves against such forces of evil?
Is it not true that the surest way to spare our country from these forces of evil, since they likely come from outside, would be caution in the selection of immigrants to enter Canada, because this would apparently be the means through which these forces could be brought in. Is it only by a sane immigration policy that Canada could be spared from them? Up to now, I believe that our government has

The Budget-Mr. Dorion
been much too lenient toward the so-called refugee, this problem being so closely connected with immigration.
In the "Canada Year Book" of 1942, under the title, "Immigration and Colonization-Refugee Immigration," we read subsection 8, as follows:
The term "refugee" in recent years, has *acquired a much wider application than when it became a familiar word after the first world war. Then it was applied mainly to those who had lost both homes and citizenship; latterly, it has been applied to all who, because of political, religious, racial or economic troubles, actual or threatened, have been forced or induced to move.
And further, at page 166, we read this:
For many years, the exodus of settlers was discouraged by emigration countries, but latterly the emigration of unwanted minorities has been encouraged although an increased effort has been made to retain their capital.
We must conclude that to the problem of immigration has been added the problem of refugees, and I wish to draw the attention of the government to the fact that under the War Measures Act the entry of refugees does not seem to have been dealt with accurately. I am of the opinion that we should have been, and should still be, more cautious with regard to this refugee immigration. It is always commendable to extend a helpful hand to ill-fortuned people who were crushed by dictators of conquered countries; but one must not forget that-Charity begins at home-and I can hardly conceive this virtue of charity practised to the extent of allowing all kinds of people to establish their homes in our midst without, prior to their coming, ascertaining that they are desirable subjects.
One wonders why the government deemed it advisable to cast aside the immigration law, as was the case recently. I wish to state first that in our immigration law, chapter 93 of the revised statutes, we find the necessary protection against the intrusion of undesirable elements. Section 4 provides that the minister may issue a written permit authorizing any person to enter Canada, to remain therein, without being subject to the provisions of this act. In accordance with this provision of the law, at the beginning of the present session the Minister of Mines and Resources tabled sessional paper 46 on Friday, January 28. In this document we see that only two special permits were issued during the calendar year 1943 to the two persons mentioned in the said document. I wonder why all the permits issued by the same department to many hundred refugees have not been issued under the same section.
In fact an order in council was passed on the 10th December, 1943. That order, P.C. 9440, in part reads as follows:
Section 1. Notwithstanding any provision of the Immigration Act, chapter 93 of the Revised Statutes of Canada, 1927, or any amendment thereto, or of order in council P.C. 2653 of September 14, 1939, the Minister of Mines and Resources or any person thereunto authorized by him may issue a temporary permit to enter Canada to any refugee transferred to Canada from the United Kingdom whose release in Canada has been approved by the appropriate authorities.
Paragraph (c) of section 2 reads:
(c) be subject to the provisions of the national selective' service (civilian) regulations in the same manner and to the same extent as any other person in Canada.
It appears by this last paragraph that these refugees can have the benefit of the national selective service regulations but are not subject to the military call-up. There is another reason why one wonders why we did not apply the immigration law, and this wondering derives from the fact that in the order in council just mentioned it is explicitly stated that chapter 93 of the revised statutes does not apply. If we look at section 3 of chapter 93 we see provisions for the protection of our people, as well as our institutions, which are expressly set aside by the P.C. 9440. In this section appears a list of prohibited classes, and it is worth mentioning some of them. They are as follows:
Idiots and imbeciles	Spies
Deaf and dumb	Criminals
Prostitutes	Alcoholics
Vagrants	Revolutionaries
Invalids	Traitors
And especially those mentioned in paragraph (n) of the said section 3, that is to Bay:
Persons who believe in or advocate the overthrow by force or violence of the government of Canada or of constituted law and authority, or who disbelieve in or are opposed to organized government, or who advocate the assassination of public officials, or who advocate or teach the unlawful destruction of property.
After having taken cognizance of the above-mentioned order in council, I thought it advisable to inquire about the number of refugees who had been admitted to Canada by virtue of this order. On January 26, I asked some questions on the orders of the day, and one of them read as follows:
How many permits have been issued by the Minister of Mines and Resources, or by any person authorized by him, under order in council P.C. 9440, December 10, 1943?
The answer given by the minister was: "932." Wishing to know who these refugees were, I subsequently asked another question to find out the names, previous residence and racial origin
The Budget-Mr. Dorion

of the persons to whom these permits had been issued. In answer to my question, sessional paper 48-A was tabled on April 17. It showed that more than ninety per cent of these permits had been issued to Hebrews.
I wish to state here most emphatically that at all times I am ready to comply with the directions given by the Roman Catholic church, and to consider the Hebrews as any other people. I have nothing against them. During my twenty-three years of law practice in Quebec, I have had occasion to deal with them quite often, and I do not hesitate to say that they must be considered on the same footing as any other people; but my contention is that they must not enjoy any special privileges and I will endeavour to show that, since the beginning of the present war on too many occasions we have seen special privileges extended to them; so much so that, at times, we are wondering whether or not we were engaged' in this war for the sole purpose of saving or helping out the Jews all over the world. Here in Canada our attention has been drawn very often, to all kinds of organizations to help the ill-fated Jews. As an example, an association was formed some time ago, under the name of "United Jewish Refugees and War Relief Agencies," with its head office at 1121 St. Catherine street west Montreal. They also have branches in Toronto and Winnipeg, under the chairmanship of Samuel Bronfman.
Under the auspices of this association a campaign was launched throughout Canada, sponsored by Senator Cairine R. Wilson, chairman of the national committee on refugees. The purpose of this campaign was to gather some 500,000 signatures in support of a petition to the Canadian government. I hold in my hand a copy of this petition in which they asked the government of Canada: I quote:
1.	To offer the sanctuary of Canada to refugees from political or religious persecution without regard, to race, creed or financial condition.
2.	To take immediate steps to facilitate the entry into Canada of refugees (especially those stranded in Portugal) whom it is possible to rescue.
3.	To make any changes in the Immigration Act, regulations or administration thereof necessary to admit such refugees into Canada.
I do not know whether this petition ever reached the government, but I am aware that in order to encourage this movement a Canadian immigration office was opened at Lisbon, Portugal, in October, 1943, for the purpose of examining refugees applying for sanctuary in Canada and for granting appropriate visas. Later on, the house was informed that a few

hundred refugees were coming into Canada each month under this new scheme.
Must I come to the conclusion that these petitions had a much better result than some other petitions that were presented to the Prime Minister by Canadian citizens and municipal corporations? On March 27 I asked the Prime Minister, as recorded at page 1861 of Hansard:
How many municipal corporations and public bodies have forwarded to the Prime Minister resolutions requesting the full application of the provisions of the Immigration Act with regard to any individual who wishes to enter this country ?
This is what the Prime Minister answered:
Mr. Speaker, I am informed that there have been forwarded to my office a large number of resolutions on the subject referred to. The resolutions are similarly worded. It is perfectly evident some one or more persons have been circulating communications with a view to having them forwarded to my office. The question is of the kind which, rvere it to be answered literally, might convey a wholly erroneous impression. For example, I might say I have received thousands of communications identically worded concerning some things-the postage being free. Were I asked to recall how many of these have been received, and were to say that thousands had come in, such an answer would be wholly misleading. For the most part they would represent the opinions of a mere handful of persons. There have not been thousands in this case, but an answer as to the number that have come in would be misleading the public as to the significance of the reply given. I think therefore that the question should not be answered.
Having personally received some duplicates of these resolutions, I know they were passed legally and regularly at a meeting of each municipal corporation which had adopted them, and I really was amazed to notice how little concerned was the Prime Minister about these resolutions. Must we come to the conclusion that the Jewish refugees deserve much better attention from our government than our Canadiamborn citizens?
At this stage of my remarks I should like to make a suggestion; I would not say for the solution of this very difficult problem, but at least as an attempt to bring about a solution. I believe that the Canadian government should follow the rulings of the British North America Act on this question, which we find at section 95 of the act which reads as follows:
In each province, the legislature may make laws in relation to agriculture in the province, and to immigration into the province; and it is hereby declared that the parliament of Canada may, from time to time, make laws in relation to agriculture in all or any of the provinces, and to immigration into all or any of the provinces; and any law of the legislature of a province relative to agriculture or to immigration shall have effect in and for the province as long as it is not repugnant to any act of the parliament of Canada.

The Budget-Mr. McGarry
This section, was in accordance with the Quebec resolutions of 1864 and the London resolutions of 1866.
I have always believed that in all our internal policies, if we followed as closely as possible the terms of the British North America Act, we would not be so often faced with so many difficulties as have been encountered more in recent years than ever before.
On this question of immigration there is no doubt that the provincial governments are much more aware of the needs and possibilities of their respective provinces. They are in closer relation with the people, with the municipal bodies, and are in a much better position to determine what kind of immigration they should allow in order that their economic life, as well as their social and political life, - may not be interfered with and so that the efforts of the people to make this country the ideal place to live in may not be hampered.
In conclusion I would suggest that this government request the provincial governments to pass legislation, and, in this way, to make known their views on the matter. I suggest that this section 95 of the British North America Act has been too much overlooked in the past and that, after the present war, it will be more essential than ever before to have it put into application.


Mr. M. E. McGARRY (Invemess-Rich-mond):: Mr. Speaker, once again that hardy
annual, the budget, has made its appearance in the house. I think all would admit that it received a most lucid and eloquent interpretation at the hands of the Minister of Finance (Mr. Usley). I also feel assured that it had a very good reception at least from a majority of members in the house and from the public generally.
It will be noticed that it has not diminished very much in stature, since it made its last appearance. After all, I do not think that is contrary to the anticipation of hon. members or the public in general. It will be remembered that this is primarily a war-time budget and, although we have now experienced almost six years of this reign of death and destruction, it is quite evident that that tragedy of carnage has not yet ceased, and no one can forecast when the end will come.
Moreover, it would appear that we would be wise in anticipating that, from now until the end, this conflict will become more intensive in character than has been experienced in the war up to now. Therefore it is wise on the part of the government to provide proper financial arrangements, and wise for us who are
interested in the war to be prepared to exercise every ounce of faith, enthusiasm, energy and strength within our power. It behooves us now to be prepared to put forth an even greater war effort than we hitherto have done.
I shall not tire the house by entering into a detailed recitation of the achievements of this dominion in its war effort, nor shall I set out what it has done in both economic and military fields of endeavour. I believe it would be sufficient to say that it has received the plaudits of the whole of the Canadian people, and that it has received the praise and admiration of our allies, and has merited praise from every worth-while journal on the north American continent. In fact, so wise has been our economic policy to maintain the strain of war and to prevent deflation after the war is over, that, in large measure, our economic policy wras copied by the great nation to the south of us.
It was pointed out in the speech from the throne that the government had primarly in mind the successful prosecution of the war, and I think it will be accepted by the unprejudiced mind that it has adhered fairly closely to that policy. When we realize the cooperation the government has received from every element of our citizenship-from labour, industry, the farmers, the fishermen and the merchant marine-it appears quite clear that the nation as a whole has become conscious of the importance of putting forth our very 'best efforts in order to defeat the challenge of those who would dominate the world.
References also were made in the speech from the throne to other measures regarded as essential to deal with our post-war problems. There was reference in the speech from the throne to measures which would be introduced, debated and put on the statute books in order to deal with our post-war problems. These are classified as measures of rehabilitation and reconstruction, and I think all will agree that they are timely. I believe the government w7as wise, first of all to anticipate those problems, and then to introduce measures to deal with them. I think we owe that to our fighting men, the men who have experienced the hardships and the horrors of war. It behooves us to show these men when they return to their homeland that they will have security, and will live in a democracy worthy of the blood, sweat and tears they have expended in its behalf.
While I admit that the prosecution of the war should be foremost in the thoughts and intent of our people, yet I consider that the government is only showing wisdom when it has some regard and does some planning for
The Budget-Mr. McGarry

possibly 2,000,000 of our citizens who are now engaged in industry and are on active service, and who will return to the land or revert to their ordinary pursuits in life. I think every unprejudiced person will admit that from the inception of this war the government has attempted to prepare plans and schemes to deal with our post-war problems. Three hours after war was declared, the government established the wartime prices and trade board. Every one knows the beneficial effects of this action. During the war there has been no hoarding or no unnecessary scarcities. We have not had the disgraceful spectacle we had in the last war where certain men and corporations waxed rich on the sacrifices and blood of the nation. This was a great and cautious measure undertaken by the government immediately after the beginning of the war.
We come next to soldier reestablishment. We all remember the old Soldier Settlement Act which did not prove very satisfactory. Throughout my constituency, and I believe on the island of Cape Breton generally, it was characterized as a racket. Apparently no precautions were taken to afford security to the settler. In many cases men with no farming experience were placed on unproductive farms. With the two main essentials for success lacking, the result was that in one or two years many of these farms were vacated. Not only have the new amendments improved the act of the last war, but its provisions have been extended.
To-day men are placed on farms under certain regulations. First of all the farm must be sufficiently productive to support a man and his family and, next, the man must have some knowledge of farming. If he has not that knowledge he is given an opportunity to prepare himself to work on a farm and make a substantial living. The same rights and privileges are extended to men who work in small industries and to fishermen, men who can devote only part of their time to agricultural pursuits. They will receive the same concessions granted to those 'who can devote themselves entirely to agriculture.
Then there is the compulsory employment act which was passed by this government during the war. This will be of some help in solving our post-war problems. When a man leaves employment to enlist for active service he has the right to claim that employment upon his return.
Then there is the Unemployment Insurance Act. No one will say that that is not a provision to deal with the unemployment problem which is sure to show its ugly head after this war. The introduction of that act was quite timely because it was brought in
IMr. McGarry.]
when there was no unemployment. The result is that to-day we have a repository of money which will provide much of the finances needed to help, at least temporarily, in solving any unemployment conditions.
We come next to the matter of reconstruction and rehabilitation. These matters have been under study for the last two years by a committee of this house. The knowledge obtained from experts who have been before the committee is certainly worth while. I trust that when the provisions of this scheme are put into operation they will be dominionwide and that special care will be given to those parts of Canada where the need for rehabilitation and reconstruction is more strongly indicated.
At the risk of being accused of being too regional, I consider that Nova Scotia, Cape Breton island and the constituency I have the honour to represent in particular will be the first parts of Canada to receive a practical application of this rehabilitation scheme. There is no part of this dominion which has received less support of that kind. On Cape Breton island and in the constituency which I represent we have many resources, on the land, in the forest and in the sea. Wrapped up in the rocks and in the bowels of the earth is enough mineral wealth to make us all happy and rich. In addition, Cape Breton island is a veritable tourist mecca. If our economic condition is below par it is not because of a lack of resources; it is not because of a lack of brain and brawn; it is owing to the fact that in spite of the industry and intelligence of our people there remain problems which they themselves cannot solve without governmental assistance.
One of our greatest problems is that of transportation, and a large part of this problem is caused by the bottleneck which exists between the great city of Sydney and the mainland of Nova Scotia. Our transportation condition is such that at the present time a locomotive can haul only eighteen cars from Sydney to Point Tupper, but the same locomotive can haul eighty loaded cars from Moncton west. This haulage inadequacy, if I may so term it, is because of a very high grade and many curves on the road.
That is not the only trouble. Not only are we suffering from a lack of haulage facilities, but we are subjected to a delay of from five to seven hours on account of having to ferry our freight and our passengers across the strait of Canso. In other words, a loaded train arriving at Point Tupper which has to be ferried to Mulgrave will reach Truro seven

The Budget-Mr. McGarry
hours later than it would if the train could cross a bridge or causeway. It costs $500,000 to operate the car ferries at Point Tupper, to say nothing of the capital replacement after a certain number of years. There is operating across that strait a highway, now operating at a loss. If a causeway were built there it would afford a passage for cars, and that project which to-day is operating at a loss would become a source of revenue simply through a toll being charged for crossing the bridge. The people of Cape Breton are vitally concerned in this matter. There is very much ado about the cost of this project; but we, in Cape Breton, realize that we have been contributing to projects in other parts of Canada from which we derive no physical or financial benefit, and when we consider what has been expended in that way we feel justified in saying that the matter of cost should not enter into this scheme at all. The first and only consideration should be to supply proper transportation so as to overcome the inadequacy from which we are suffering. It is pretty nearly time that the people of Canada when they are speaking of the eastern and western boundaries of this great dominion of ours should say, "from Sydney to Vancouver", instead of saying from "Halifax to Vancouver". I think this project is economically sound. It would be costly, no doubt, but it is certainly a project to which our people are entitled.
That is not all I have to say about transportation facilities in our part of the country. In my constituency there are two short lines of railroads. We have a railroad from Point Tupper to St. Peters in Richmond county. We have another railroad from Point Tupper to Inverness in Inverness county. Both of these roads should be further extended. The development which has taken place in the fishing, lumbering and farming industries north of Inverness warrants the extension of that railway in order to provide proper and adequate transportation facilities for that section of the country. There is another reason why this extension should be made. From the town oi Inverness to Margaree harbour is a belt ol coal which has lain undeveloped, I believe just for lack of the transportation facilities which this extension would provide.
I should like to add this further word about our transportation facilities. The train from Point Tupper to Inverness as well as the train from Point Tupper to St. Peters consists of one passenger coach and a number of freight cars. If you want to have a good example of one of the relics of olden times you should take a ride on the coach of each of these trains. The heating system is terrible. It is so bad that it renders the coach air-polluted rather
than air-conditioned. The only compensating thing about it is that the coal gas renders the passengers, if they have any distance to go, sort of semi-conscious, so that they do not feel the bumps from the uncomfortable seats in that coach. I would suggest to the Minister of Transport (Mr. Michaud) that he substitute for this air-polluted mobile contraption-I cannot call it anything else-a fairly decent passenger coach that would not tax the respiratory organs of the passengers and would not be so severe on their dorsalis and gluteus maximus muscles. I think that is something which our people deserve. We have been tolerant. We know the conditions of war; we know the scarcity of materials; nevertheless we feel that just so soon as it is possible to make this substitution it should be done.
Another thing that should be given careful consideration in the rehabilitation programme is our fisheries. We have in the north of Inverness county three large cooperative fisheries, and we have three private individuals who are carrying on that industry there in a big way. But under the circumstances, with a lack of facilities, they are not able to reach anything like maximum production or get the price which they should for their fish. We all know that the marketing of fish to-day has changed materially from conditions prevailing a few years back. You can no longer tie a rope about a cantle of fish and ship it and sell it on the market. Mackerel to-day must be filleted. You cannot put it on the market round. The best codfish to-day is processed into boneless fish. These products are perishable, and there are no refrigeration facilities. They cannot be processed profitably because of the lack of refrigeration facilities. Local refrigeration is a necessity in carrying on this work. I have been trying for the last three or four years to get a refrigeration plant in the centre of the north at Grand Etang. When one looks around and sees all that these people have done under the greatest handicaps I certainly cannot understand why we should not at least encourage them in the wonderful efforts they have already made by providing them with refrigeration facilities.
At Cheticamp a few years ago we had a life-saving boat. This possibly does not seem to hon. gentlemen a very important thing, but I can tell this house and the minister that the lack of that life-saving boat at Cheticamp is responsible for a lack of production of fish. I will tell you why. The men are operating in that section with small boats and they are not going to attempt to go any distance outside where probably the fish a're schooling unless the weather is quite evidently fine. If there

The Budget-Mr. McGarry

is any suspicion or forecast of bad weather they refuse to go out; whereas, if they had a life-saving boat at Cheticamp, they would feel that if they got into trouble there would be some refuge in the storm. I urge upon the minister the consideration of this very important matter. It would not be costly, because it would mean only a few hundred dollars, and I can assure him that it would have a great effect on the production of fish in that area.
Lumbering is another thing that will receive consideration under the rehabilitation scheme. The lumber industry in my constituency is one of our greatest industries. The province of Nova Scotia has done a great deal in the way of conserving our forests and in encouraging that industry in many ways. From the revenue that is accruing to the dominion from that industry, I really think something more should be done to encourage it.
What I have said about fisheries in the county of Inverness applies also to the counties of Richmond and West Cape Breton. These people, alone and unaided, have done wonderful work in that industry. They have established cooperatives there, and they are carrying on, under difficulties, a business which is very important not only to themselves but to the dominion as a whole.
Another thing that should come under the rehabilitation scheme is an intensive geological survey of our mineral wealth. I believe that if any section of this dominion has been almost absolutely immune from research of this kind it is the island of Cape Breton, and I would urge upon the Minister of Mines and Resources (Mr. Crerar) that he see to it that as a postwar programme, and knitted into the fabric of rehabilitation, there should be an intensive research into our minerals, which I believe exist in abundance although they have not yet been -revealed.
Another industry that will receive consideration, and one that should be considered particularly in my constituency, is the farming industry. As has already been pointed out to the house, there are hundreds of thousands of fertile acres in Nova Scotia which are submerged, and each year these submerged areas are increasing. This does not mean that our farmers are negligent or that they are not trying to help themselves; but this is a problem in which they cannot help themselves, and this reclamation of land, and the preservation of other land that will be overrun if some precaution is not taken, is one of the most important things I can conceive of in the province from which I come.
Talking about centralization and decentralization, another thing we are suffering from

in the island of Cape Breton, is the lack of an abattoir. The result is that our people in Cape Breton during this war have not been allowed the bonus on hogs simply because the only abattoir to which we have access is in Moncton, New Brunswick, and the cost of transporting our live stock there is too great. Moreover, the inconvenience is quite a serious matter. I think we should have an abattoir on the island of Cape Breton.
Something else which I believe is indicated is some sort of experimental station, a farm owned by the government, for the purpose of encouraging our people in the industry, setting an example in the way of increasing our stock and improving it, and interesting our people in sheep raising or something of that sort, for which our country is well adapted. I know several sites in my constituency which would be very suitable for an experimental farm of that kind, not far removed from a market, with splendid water, enough acreage, good pasturage, and surrounded by the most prominent farmers in the constituency.
We have heard something about the civil aviation scheme. I hope, when that is put into effect, our section of the country will not be overlooked. We have one of the most suitable sites for an airport right on !he very brim of Cape Breton Highland park, and after this war, with our tourist meccas we have all around us, we expect that the influx of tourist traffic will mean to us the greatest revenue of all our industries.
We know also that these men who come to visit our country, in order to admire our scenic beauties and to bask in our restful surroundings, have not very much time to spare, and I do not doubt that many hundreds, yes, thousands, of these people will come to our meccas by plane. I said before, we have, adjoining our national park, one of the best sites in Nova Scotia for an air field. I would ask the minister, who is so greatly interested in the matter, when the house closes, if he is looking around for a place to admire beautiful scenery and to get a rest such as he would never obtain in any other part of the world, to look over our prospects in that direction.


Mr. GILLIS:: He had- better take a lunch with him.


Moses Elijah McGarry: Why?


Clarence Gillis: Well, after the description you have given us.


Moses Elijah McGarry: What description?


Clarence Gillis: All the fixing up that the whole constituency needs.


Moses Elijah McGarry: Do you not agree with me?

The Budget-Mr. Johnston (.Bow River)


Clarence Gillis: Certainly I do; but when you invite him he had better bring his lunch with him.


Moses Elijah McGarry: We are not paupers, you know, although we hope to be better off when we are given our just rights.


Clarence Gillis: Hear, hear.


Moses Elijah McGarry: I would ask the hon. member this question: If you are not in harmony with the suggestions I have made with regard to improvements, will you not make a definite statement to that effect?


Clarence Gillis: I have been asking for those improvements for four years.


Moses Elijah McGarry: May I not ask also?


Clarence Gillis: Why, certainly.


Moses Elijah McGarry: Then why cast reflections on my constituency?


Clarence Gillis: I did not do that.


Moses Elijah McGarry: You are not the only one who can ask for things.
There is another matter in this scheme that I should like to refer to, and it is the last one I shall bring up. Some consideration should be given in the plan to the erection of a dry-dock at Louisburg. I see that the minister is smiling. I may tell him that that particular site has been investigated by some of the best engineers in Canada, and they say that if ever there were a natural site for a dry-dock it is at Louisburg. Louisburg is an open port the whole year round. If we are to expect and take for granted what we are told by those who have confidence in shipping and shipbuilding, that it is an industry that will be one of the greatest that we have after the war, I myself think the problem of establishing a drydock at Louisburg is a very important matter.
These are a few of the things with which I wish to deal. I am sorry that I had to be more or less regional in my remarks; I am sorry that I could not deal more fully with everything that is contained in the budget, but I have taken that part of it which I consider to be the most important part and that in which my own constituency is interested. If I have been too regional in my remarks I apologize for it; but I say that, after all, when we are talking as some people are talking probably too frequently about things, we should harp about something that particularly concerns our own constituency and not talk too much and too often about things that do not concern our own constituency or others.
100-275i


Mr. C. E. JOHNSTON (Bow River):: Mr. Speaker, the words that I have to direct to you to-night are words which I can assure you are not going to be concerned with my own particular constituency. I intend to speak in a broader sense. My remarks will apply to the whole Dominion of Canada, because in some way or another I feel that once a member is elected to the House of Commons he ceases to. be the representative of the small community in Canada from which he comes. He must take a larger perspective and try to improve the dominion as a whole. He should not particularly confine his efforts to one small locality in the dominion.
I wish to say a few words to-night on the budget which has just been brought down. All: hon. members recall that last year when the budget was brought down we were exceedingly shocked at the size of it, only because it was the biggest we ever had. We were not unduly concerned because we knew that a war was on and it had to be financed. We thought then that $5,360,000,000 was a lot of money, and it was. This year we have gone over that again, and have brought down the largest budget in: the history of Canada. In spite of that, we' are going to be able to carry on. There is no: question about that.
One of the things which is most noticeable in the budget is that there is, generally speaking, no change in it, in so far as principle is concerned, from any other budget that has been presented. The same principle of taxation and borrowing is being followed. I could not help being impressed when the minister was speaking. One of the things he emphasized was the fact that there was not to be any higher taxation. I am sure we were all pleased with that. But I often wonder how there could be any higher taxation, because we have reached the height of taxation now. We are taking everything from the people that they can possibly afford to give. We have taken everything that the market can stand. The' social credit conception would be that it is not necessary to place such tremendous taxation on the people, and yet we could finance the war just as efficiently as it has been. It has always been my contention that we could finance this war with less taxation, but not without some taxation. The taxation would not necessarily be as great as it is now.
I am not surprised at the lack of change in policy, because the present Minister of Finance (Mr. Usley) is-and I am sure he will not mind my saying this-a determined old, orthodox financier. He follows the school of orthodox financing as has been done by every government that has been in power. I am sometimes amazed at the official opposition criticiz-
4376	COMMONS
The Budget-Mr. Johnston (Bow River)
ing the present government when I remember that their party were in power during the last war and they financed in exactly the same way. Why should they point a finger of criticism at this government? As far as I can remember they have never offered any suggestions to this government showing how they would finance differently. I see the Minister of Pensions and National Health (Mr. Mackenzie) shaking his head. I must make a correction there because the government has created a little national money. May I say to him that if it had not been for the teachings of the Social Credit party I fear they would not have gone as far in that direction as they have? In that respect may I congratulate the government because I think it was a worthwhile action. I am afraid we cannot expect from this government and certainly not from the Progressive Conservative party, when and if they get into power, any radical change in financial policy. Therefore we shall have to continue in peace as well as in war to finance in exactly the same way as we are now doing; that is, by taxation and borrowing, with the limited amount of nationally created currency that this government has issued. But I wonder how the (Minister of Finance and his advisers can possibly conceive of this system going on year after year, continually building up the tremendous debt that we are building up, with-[DOT]out some change in policy.
A year ago the national debt stood at :about eleven and a half billions of dollars. I have the figures here for this year. I think the increase was about two and three-quarter billions of dollars. That makes our national debt, funded and unfunded, about fourteen billion dollars. That is a tremendous load for the country to carry. It would not be so bad if that were to be the limit of the load. But the load is going to continue to pile up higher and higher, and as I see it we have not much prospect, despite the hopes and the pious platitudes of the Prime Minister (Mr. Mackenzie King) the other day, of our debt decreasing after this war. Therefore we shall have to pay the tremendous interest charge which is a continuing yearly charge upon the people, and we shall have to tax the people for it. When We do that we lower their standard of living to that extent. It is a fixed charge and cannot be changed.
I know the minister has financed in part by the sale of victory bonds. I am not going to say a great deal about that other than that if a man has the money to invest in victory bonds, then I think it is a good business proposition because he gets a good return on his money. It permits him to put
(Mr. C. E. Johnston.]
money away for a rainy day or to use it after the war is over when there is no danger of inflation. To that extent I agree with the minister. But I fear that in too many cases there has been too much pressure put on the people to buy bonds, and then as soon as the victory bond sale is over and the people need that money-in some cases they had to go out and borrow the money to buy the bonds when they could ill afford to do it- they turn around and cash in on the bonds. That is so because the Minister of Finance must keep on cautioning the people against doing it. Every year he has cautioned them about the same thing, but when a man borrows money to buy a bond and cannot afford to pay it back, the only thing he can do is to cash the bond. However, I shall deal with that a little later on. The minister also mentioned the number of people who held victory bonds, while at the same time he was alarmed at the rate at which they were being cashed. He stated that about one-sixth of our people have bought victory bonds, which leaves about five-sixths of the people without bonds, but those five-sixths of the people are to be taxed in order to pay the interest on the bonds held by the other one-sixth.


James Lorimer Ilsley: A large number of them are children.


Charles Edward Johnston: Oh, yes; but even allowing for that it is a tremendous burden upon our people. To offset the number of children, the minister must know that, as time goes on, more and more of these bonds will be turned in, so that that fraction will be reduced from one-sixth to one-seventh or one-eighth. At the same time the number of people who will be taxed to pay the interest on those bonds will become greater and greater. It all comes back to the complaint we have made year after year, that the interest on our bonded indebtedness will be paid to a very few people, while the great majority of Canadians will have to be taxed to pay it. So that the vicious circle continues. In my opinion that is all quite unnecessary, but if the people persist in electing orthodox governments which are dead-set against reform, they will have to take the consequences. It will not make any difference whether they elect a Conservative or a Liberal administration; they will be saddled with the old, orthodox financial machine that will carry on just as it did in the past.
As I read over the budget speech of the minister I recalled the words of the Prime Minister in 1935 when he said, "If you elect me to head the government of Canada I will
JUNE 29, 1944	437T
The Budget-Mr. Johnston (Bow River)
go back and do battle with the money power." That battle has been rather a sad affair, as anyone would agree after attending the meetings of the banking and commerce committee. It seems to be going all in favour of the financial system, upholding the present banking laws. The Prime Minister also gave the great assurance that if he were returned to power he would issue currency and credit in terms of public need. Well, I think the people are beginning to realize the true situation, and they will judge this government accordingly.
I was pleased to see the government do one thing; that is, insititute family allowances. May I remind the Minister of Pensions and National Health that the principle of family allowances was first advocated by us; only we called it a national dividend. Well do I remember how hon. members on the opposite side of the house began to clamour, "Twenty-five dollars; you are going to give everybody twenty-five dollars." Well, you do not call them national dividends; you call them family allowances. That is a misnomer and very deceiving to the public, as I will show in a few minutes; but the point is that the principle itself is sound.


Ian Alistair Mackenzie: Mr. Speaker, I rise to a point of order. My hon. friend is discussing family allowances, and there is a specific resolution on the order paper dealing with that matter. Therefore I submit that he is entirely out of order.


Charles Edward Johnston: But it is in the budget.


Ian Alistair Mackenzie: There is a resolution on the order paper dealing specifically with family allowances, and I say that the hon. member is out of order in discussing that matter now.


Thomas Vien: The hon. gentleman is addressing himself to the question of family allowances. There is on the order paper a resolution dealing with this very matter, which will be discussed at a subsequent time, a,nd apparently the hon. gentleman is now anticipating that discussion. Therefore at the moment he is out of order.


Charles Edward Johnston: I do not intend to refer to the legislation concerning family allowances, nor do I intend to discuss the matter in any detail whatever. I am speaking of it only as a method of carrying on the finances of this country. The matter was definitely referred to in the budget speech as one means by which the government was going to relieve the burden of taxation, and that is the only connection in which I intend
to refer to it. I am quite well aware that the matter is dealt with in a resolution on the order paper, and I have no intention of discussing it in detail. I just wish to point out that when I mentioned this subject I thought I was rather helping the government a bit.


Ian Alistair Mackenzie: It is not very often my hon. friend does that.


Charles Edward Johnston: Whenever I have an opportunity to congratulate the government I am only too pleased to do so, but that seldom happens. The government has been accused of bringing in this programme of family allowances as election bait, and I should like to say just a word on that point. As I have said already, I believe the principle is sound. The Prime Minister stated definitely that the measure would not come into operation until July 1, 1945, and therefore he concluded that no one could accuse him of attempting to buy votes. Just let us analyse the position. I say that the most honourable thing the Prime Minister could have done was to1 bring that legislation into effect right now and give the people their family allowances. As it is, what is he doing? He is holding a club over the heads of the people of Canada, and saying, in effect at least, " If you do not vote Liberal-"


Ian Alistair Mackenzie: Why did you not bring in your measure with regard to paying national dividends?


Charles Edward Johnston: I quite
anticipated a question like that, and I shall deal with it later on. In effect the Prime Minister is saying, "If you do not vote Liberal you will not get family allowances. If you do vote Liberal we will give them to you." I think that is the worst kind of political intrigue. The Minister of Pensions and National Health referred to the $25 dividend which we advocated. I want to remind him that that is a principle; that is the philosophy of social credit.


Ian Alistair Mackenzie: Why did you not do it?


Charles Edward Johnston: If the
Prime Minister had kept one of the other promises he made in 1935, that he was going to keep his hands off Alberta, we would have been able to carry out our programme, but from the very first he tried to choke the life out of my province. If he had left Alberta alone we would have paid the $25. This government have recognized and endorsed that principle, because now they are copying us.
The Budget-Mr. Johnston (Bow River)

But this is not a true family allowance; again the government is deceiving the people. This is nothing more or less than, charity to the poor, and I do not like that kind of administration.


Ian Alistair Mackenzie: Now my hon. friend is discussing the merits or demerits of family allowances, when we have on the order paper a specific resolution dealing with that subject. I say that he is absolutely and definitely out of order.
that they had better go into beef, or something of that kind. So that they are continually going from one thing to another. I do not wish necessarily to give my opinion of * that, because someone may question it. Rather, I should like to refer to what the president of the Saskatchewan wheat pool had to say, when he made a statement on May 10, 1944. I shall read a portion of it:
The farmers are now in the middle of


Charles Edward Johnston: Well, I
shall not say anything more about it, Mr. Speaker. When the Minister of Pensions and National Health refers to the $25 a month, however, I say that is part of our philosophy. We believe everybody should be given the $25, or at least a basic standard of living.
^ Mr. MACKENZIE (Vancouver Centre): You have been pretty slow in Alberta.


Charles Edward Johnston: In this
case you are giving grants only to those people who are so poor that they do not come within the income tax brackets, and you are taking the money away from those with children who do come within those brackets. This is not a family allowance; this is charity. You cannot class it as anything else; and from that point of view I condemn it.


Ian Alistair Mackenzie: I repeat my point of order, Mr. Speaker.


Thomas Vien: The hon. gentleman has
been told already that this discussion is out of order, and he must not continue it further.


Charles Edward Johnston: Thank you, Mr. Speaker; I shall abide by your ruling. I know this is a touchy spot with the government, and I shall not continue. I do not want to embarrass them any more than they are being embarrassed. I am just trying to help them, if they want to save their political heads, although I am afraid it is pretty late for that.
Now, for a few moments, I should like to refer to that part of the budget dealing with agriculture. I am very much afraid that agriculture has been overlooked once more. As yet I have been unable to discover any definite policy laid down for agriculture. I know that on several occasions the Minister of Agriculture (Mr. Gardiner) has made much ado about how he was directing agriculture. One year he says that the farmers should raise large quantities of wheat. Another year he says not to raise so much wheat but to go into hogs. The next year he tells the farmers IMr. C. E. Johnston.]
And I have called attention to the date as being May 10.
-and we believe they should have the latest information regarding the wheat situation We also believe they should be frankly advised of the necessity of substantially increased wheat acreage this spring before it is too late. We had hoped that before this eleventh hour a definite statement with final advice would have been made either by the dominion Minister of Agriculture or the Minister of Trade and Com-(TV5'e' The last statement on production for 1944 was made from Ottawa following the production conference held in Ottawa last December, and the farmer was advised not to increase wheat acreage The wheat situation has changed from one of large available supplies pressing heavily upon limited demand into a position where the wheat problem next year will be largely in terms of receiving and transporting enough wheat to supply the market.
Then he goes on to give the carryover in each of the years. I wish, however, to read a little more of the statement. And remember, this is the president of the wheat pool, a man who speaks with some authority. He declares, in regard to our production of wheat:
,	wheat glut is gone-our concern now
should be a possible shortage in supply in the event of a short crop or crop failure". He recommended^ to farmers as a sound policy for 1944 production:
1.	Make provision for necessary feed grain requirements with some surplus.
2.	Get back to normal summer-fallow acreage to fat sound farming practice on each farm.
In other words, he is repudiating entirely what the Minister of Agriculture has advocated, when he has been jumping from here to there. He is advising the farmers to go back to a regular method of farming, because they are the best judges. All we have to do is to indicate to them the amount we want, and they will arrange their plans so as to produce it. Then it continues:
3.	Sow every available acre to wheat with
assurance that every bushel of wheat produced is going to be needed.
When you have things like that coming up year after year, is there any wonder that the farmers of this country-not only those in the west, but throughout the whole of Canada- find themselves in a great state of confusion?

The Budget-Mr. Johnston (Bow River)
I am not going to say that the government has not done something for agriculture, but what it has done has come rather late. One of the great mistakes that has been made in the past has been that prices of agricultural commodities have not been fixed so that the farmer would get his cost of production, plus a fair profit. I am not one who advocates that any industry or any individual should work for nothing. I think the individual is entitled to a profit. If he happens to be an industrialist, then I say that he is entitled to his cost of production, plus a fair profit. If that is true of one industry, then necessarily it is true of another.
When the war began, agriculture suffered particularly. They started out with low prices for their commodities, but the wages they had to pay and the prices they had to pay for machinery jumped immediately-as is always the case. Therefore I say that agriculture has suffered, from the beginning of the war.
What was the excuse given then? I remember a speech that was printed in the newspapers, reporting what had been said by the Minister of Finance when speaking in Toronto. On that occasion he objected to the increase in prices of farm commodities, for fear that it would cause inflation. Well, wheat was only ninety cents a bushel at that time; since then it has been increased to $1.25-somewhere near where it should be-and there is no inflation. But despite the fact that the farmers are now receiving a fair price-and most people think it is a really good price whereas, as a matter of fact, it is not a good price, when one considers the high cost of wages and machinery and of living, and all those other things the farmer has to buy-they are not making much money. I shall prove that, in a moment or two.
I have before me a return affecting Alberta, and published by the agricultural extension service of the Department of Agriculture in that province. This was issued in January, 1944, and was published at the direction of the Hon. D. B. Macmillan, Minister of Agriculture of that province. I have looked through this statement, with considerable concern, because I had in mind a statement put on Hansard by the Minister of Agriculture showing how agriculture throughout the whole of Canada was so prosperous. On this sheet, under the heading of grain crops, including wheat, oats, barley, rye, peas, beans, mixed grains and flax seed, we End that the total value of those crops for 1942 was $214,753,000, whereas in 1943 it was *only $176,309,000, showing a decided drop. In the west, gram crops have always constituted
the greater part of the farmers' cash income.
In this instance, however, we find a drop of approximately $40,000,000.
I know the Minister of Agriculture would reply immediately, " Oh, well; they made up the difference in what they gained from their sale of live stock, including bacon and beef." Let us see what they did gain. Live stock, including horses, cattle, calves, sheep and lambs and hogs, were produced in 1942 to a value of $75,729,300, whereas in 1943 the value was $92,838,800, showing an increase of roughly $17,000,000. So that they did make a small increase there. But it will be noticed that they lost over $38,000,000 on their grain.
Let us see what the grand total is-and this is where we find out whether or not agriculture has prospered. The value of production of grain, root and fodder crops, animals slaughtered and sold, dairy produce, poultry produce, honey and wool in 1942 was $362,411,700, and in 1943 it had decreased to $347,280,900, showing a drop of $15,130,800.
Therefore it is certainly clear that agriculture is not making very much out of this war.
I am not saying that the farmers should make money out of the war; I do not think anybody should make anything out of it. But some people have the idea that agriculture is making tremendous money at $125 a bushel for wheat. Of coure that idea is exploded entirely. And, as I am reminded by the hon. member for Battle River (Mr. Fair), the price of $1.25 has been operative only since last September. These figures will prove definitely that agriculture is not, in my estimation, getting what it should.
If we are to have agriculture as a basic industry in Canada-and I do not think we shall ever get away from that-then we must fix our future agricultural prices so that our farmers will be guaranteed, from the sale of their crops, a fair share of the national income. This may be difficult to figure out, but I think we can start on the basis accepted to-day. We can pay $1.25 for wheat, for example, along with the participation certificates. We could do the same in connection with cattle and hogs. Then, at the end of the year, after estimating the total revenue in that year, certificates could be issued to the farmers in amounts sufficient to make up their fair share of the national income.
Taking the average price during the period between 1915 and 1919, we find that that was the only period in which the fanner received his fair share of national income. I think that what I have suggested must be done. The only way that can be done is as we have expressed in a resolution which stands on the
The Budget-Mr. Johnston (Bow River)

order paper in my name. I am going to read this so that all may see just what we mean. It was presented on February 7 and it reads:
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 year;
Therefore be it resolved,-That, in the opinion of this house and in the interest of the nation as a whole, the government he 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.
That, in effect, is exactly the stand we thint-should be taken. Agriculture would then have no complaint because it would be getting its fair share of the national income.
There is another problem facing not only agriculture but other industries. I refer to man-power. This has a bearing upon agriculture, industry and the active army, and the problem is becoming more acute every day. It did not result overnight; it resulted in the first instance from lack of a sound policy on the part of the present government. The fact of the matter is that the government used neither skill nor foresight in the formation of its policy, but was guided almost entirely by political expediency and consideration.
Now that the invasion has started and our casualty lists grow, replacements become more urgent. The difficulty will certainly not be lessened. The government must accept their responsibility; they cannot side-step the issue. It must be faced. As time goes on, it will become more serious. I am not going to say anything more about the man-power policy, but a lot of difficulty lies ahead for agriculture,' industry and especially for the armed forces! I have spoken on the question before and I am not going to labour it to any great extent. However, for a minute I wish to refer to the labour problem and then I am through. I spoke on this on the speech from the throne and I do not want to cover ground covered already. I do not think the speech of the Minister of Finance delivered the other day is sound m logic, and I should like to quote briefly from his remarks as quoted in Hansard I quote first from page 4177 as follows:
I have been forced to the conclusion-
Forced, mind you!
that it would be a desirable change in o income tax law to discontinue the refundat feature of the income tax leaving as the fi rates of taxation, the rates of pure, no refundable tax as they now stand, and depen mg on voluntary savings to replace the pro?ee or the compulsory saving provision.

I cannot understand the logic of that. He wants to give relief by withdrawing the compulsory portion of the tax, and at the same time he wants the people to turn around and invest in bonds. Where will be the relief if they follow that advice? They will be short of money in any event. I believe the Minister of Finance was on sound ground when he had the compulsory savings. It was fair, and he so stated. To expect that that money will be put into victory bonds is not going to accomplish what he desires to accomplish. As he has pointed out, the people are continually cashing them in, which defeats his purpose. He goes on to say:
The refundable feature of our income tax law piovided simply a method of borrowing and of borrowing for progressively shorter terms as the war goes on. With the provision of allowances for contractual savings, it embodied a principle of fairness which I regret to relinquish.
Then why did he relinquish it?


James Lorimer Ilsley: For the reasons stated in the speech.


Charles Edward Johnston: There again I think the minister was unsound in his conclusion. As I read this over, I begin to think he did that against his better judgment. I may be wrong, but certainly I think he was wrong.


James Lorimer Ilsley: I gave the reasons in my speech.


Charles Edward Johnston: The minister said, "I have been forced to the conclusion". What that means is a matter of interpretation; nevertheless it is there. It seems to me that in that statement the minister was admitting that this was another thing which had been done because of political expediency. I hesitate to make a statement of that kind, but I am almost forced to do it. The minister continued:
Nevertheless, .if this particular method of borrowing, despite its virtues, has the one fault ot discouraging production at this critical period of the war, or if by its rigidity it creates hardship among those, income groups whose incomes leave little room for adjustment, then another method of borrowing must be found.
It is recommended, therefore, that no further deductions -for the refundable or savings portion be made after June 30, 1944.
He says that it discourages production; yet he is going to give back the refundable portion and ask the people to invest in bonds. They will be short just the same. That is not going to increase the amount of money they have. It will help them for the time being, but it will not relieve them of any burden of taxation. If the minister were sincere I think he

The Budget-Mr. Johnston (Bow River)
should have left in the compulsory saving and freed from taxation all overtime which would provide the required increased production.


James Lorimer Ilsley: I will speak about that later on. Has the hon. member really thought more than three minutes about it?


Charles Edward Johnston: I am just taking what the minister said. I do not think he has given a great deal of consideration to it himself because it is so confusing. I will not say anything further on that because he is going to add to the confusion at a later time, he says.
I wish to conclude my remarks by quoting a short paragraph which appeared in the Ottawa Citizen of Saturday, February 26, as a reprint from the Western Producer. I quote:
Whether we like it or not we shall be compelled to cross the boundaries erected by orthodox economists and politicians and to find and establish a method of distributing our products to our own people-a method which will not be affected by the volume of world trade. The problem is simply stated. We can produce food and other goods and services in abundance in Canada. There is no material reason why a single Canadian should go hungry or homeless or unclad because of the condition of world trade. We must, no matter how it may shock our conservative mentalities, set about finding a third method of building prosperity in Canada. We must devise and proceed to put into operation a system of distribution amongst our own people which will permit them to enjoy the full fruits that will flow from total use of all our resources.
In brief, that is exactly what Social Credit says is the solution.



BUSINESS OF THE HOUSE

Thomas Alexander Crerar: Mr. Speaker, I desire to move, seconded by Mr. Ralston, that the house shall meet at four o'clock to-morrow afternoon.


[Stage Direction]
Motion agreed to.
It being ten minutes past eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Friday, June 30, 1944