1944-07-06

SIXTH VICTORY LOAN


[Stage Direction]
On the order for motions:
Hon. J. L. ILSLEY (Minister of Finance):: I should like to make a brief statement with regard to the results of the sixth victory loan campaign.
Total sales of bonds amounted to $1,407,576,650. This represented 3,077,123 applications. These sales were made for payment in cash. The sixth victory loan did not involve the issue of any new bonds against the surrender of maturing securities.
It will be recalled that the total objective for the sixth victory loan was set at $1,200,000,000, and that this objective was split $525,000,000 for individuals covered by the general canvass and payroll savings canvass, and $675,000,000 for large investors, mostly business firms and corporations, covered by the special names canvass. Each of these objectives was exceeded by a wide margin.
Combined sales by the general canvass and payroll savings canvass amounted to $643,690,700, representing 3,070,601 applications. Sales in the special names canvass were $763,885,950.
The sixth victory loan attained new record levels in the total amount of bonds sold, in the total number of applications received, and in the dollar amount of sales to individuals covered in the general and payroll savings canvasses.
I should like to point out that applications by members of the armed forces form part of the figures I have given on sales to individuals. On the sixth loan, armed forces applications numbered 461,688 for $47,826,250 of bonds. Applications from overseas personnel of the armed forces, included in these totals, numbered 141,510 for $13,383,550 of bonds. All of these figures show a considerable increase over the results of the fifth victory loan. The record of support of victory loans by members of the armed forces, particularly from the men in the navy, army and air force overseas, is one of the most stimulating features of our victory loan campaigns. In supporting victory loans, the armed forces are showing their appreciation of the value of a reserve of savings for use
after the war. This evidence of their firm confidence in victory, and of their faith in the future of Canada, is an inspiration and an example to all of us on the home front.
These data have been compiled by the national war finance committee from information obtained at the time of public offering of the loans, and from other sources. The results of the sixth loan should be regarded as subject to revision when final figures with respect to this loan become available.
Costs of issue of the sixth victory loan, while incomplete at the present time, are expected not to exceed 88 cents for each $100 of bonds sold. Costs of issue on the first victory loan, in June 1941, were just over one per cent, but costs on all issues since that time have been less than one per cent.
With the consent of the house, I should like to place on Hansard for convenient reference a statement showing the estimated derivation of subscriptions to the sixth victory loan and preceding victory loans. All figures in regard to the sixth victory loan are subject to final verification on the receipt of reports of actual bond deliveries by banks, trust, and loan companies. The figures which I have used, and which appear in the statement I am placing on Hansard, are based on the final reports received in Ottawa from the provincial offices of the national war finance committee.
The following table shows the estimated derivation of applications for victory bonds at the time of issue of each loan.
The applications for each loan are divided into two broad classes, designated "Individuals" and "Non-Individuals".
The class designated "Individuals" includes two sub-divisions, described as "Special Names" and "General and Payroll Canvasses." The amounts shown for special names represent applications received in the special names canvass from individuals believed to be capable of buying $25,000 or more of bonds at the time of each loan. The amounts shown for general and payroll canvasses represent the combined total of applications received in these canvasses. General canvass applications include some sales to small commercial and small non-profit bodies. Total applications from these non-individuals would be a relatively small part of the total amount shown opposite the designation "General and Payroll Canvasses".
IMr. Ilsley.]
ESTIMATED DERIVATION OF APPLICATIONS, AT TIME OF ISSUE (Dollar figures in millions)
Item	First Loan	Second Loan	Third Loan	Fourth Loan	Fifth Loan	(Preli- minary) Sixth LoanCash	Conv.	Total	Cash	Conv.	Total	Cash	Cash	Cash	Conv.	Total	Cash%	$	%	*	s	$	s	s	$	;	t	%730-4	106-4	836-8	843-1	153-6	996-7	991-4	1,308-7-	1,375-0	195-6	1,570-6	1,407-6316-0	35-3	351-3	364-6	1-0	365-6	400-9	566-7	626-6	44-7	671-3	668-1(b) Non-Individuals	414-4	71-1	485-5	478-5	152-6	631-1	590-5	742-0	748-4	150-9	899-3	739-5Applications from Individuals-	30-0	26-3	37-2	26-9	29-4	24-436-5	0-8	37-3	29-0	1-0	2-5	(b) General and Payroll Canvasses1	279-5	34-5	314-0	335-6	nil	335-6	374-6	529-5	599-7	42-2	641-9	643-7Applications from Non-Individuals-	6-7	42-5	49-2	nil	117-5	117-5	0-5	0-5	nil	139-7	139-7	nilnil	7-0	7-0	nil	1-7	1-7	nil	nil	nil	72-0	72-0	nil(ii) Chartered banks	6-7	35-5	42-2	nil	115-8	115-8	0-5	0-5	nil	67-7	67-7	nil31-6	nil	31-6	47-1	nil	47-1	54-5	85-2	78-8	2-4	81-2	80-69-9	nil	9-9	19-6	nil	19-6	22-7	30-8	22-4	2-2	24-6	25-710-7	nil	10-7	15-6	nil	15-6	18-6	34-1	32-6	0-1	32-7	36-1(iii) Municipal and school	11-0	nil	11-0	11-9	nil	11-9	13-2	20-3	23-8	0-1	23-9	18-8(c) Insurance Companies, pension funds, etc., and savings	23-9	157-8	179-0	201-3	197-7	4-7	202-4	200-097-4	22-1	119-5	133-9	86-5	20-4	106-9	115-5	23-4	138-9	155-1	165-1	168-7	3-4	172-1	167-9(ii) All other insurance companies	6-7	1-7	8-4	10-9	0-5	11-4	12-4	15-5	13-3	0-6	13-9	130(iii) Associations, unions, pension and benevolent funds.	2-7	nil	2-7	5-6	nil	5-6	9-0	16-1	10-8	0-7	11-5	13-8(iv) Quebec Savings banks	1-5	nil	1-5	1-9	nil	1-9	2-5	4-6	4-9	nil	4-9	5-3278-7	6-5	285-2	297-5	11-2	308-7	356-5	455-0	471-9	4-1	476-0	458-9(i) Mining companies	39-1	nil	39-1	29-4	8-5	37-9	43-6	54-7	48-3	nil	48-3	46-4(ii) Trust companies, investment trusts, mortgages and loan companies, and real estate companies	8-4	nil	8-4	9-2	nil	9-2	11-3	17-5	19-2	0-1	19-3	18-7(iii) Colleges, churches, hospitals, and charitable organi-	2-4	0-2	2-6	2-6	nil	2-6	3-3	3-3	3-8	0-4	4-2	5-1(iv) All others, being practically all subscriptions from business firms and corporations	228-8	6-3	235-1	256-3	2-7	259-0	298-3	379-5	400-6	3-6	404-2	388-7
1 General Canvass which forms part of this total includes small commercial and small non-profit bodies. Aggregate subscriptions from these bodies would be relatively a small part of
total.
4546	COMMONS
Sixth Victory Loan

Tax Convention Act
The non-individuals class represents all applications received in the special names canvass with the exception of applications from individuals covered in the special names canvass, referred to above. The non-individuals class has been subdivided to show applications from banks for their own account; government accounts; insurance companies, pension funds, etc., and savings banks; and miscellaneous, this general group reflecting, with minor exception, applications from business firms and corporations.



RADIO BROADCASTING


[Stage Direction]
Hon. L. R. LaFLECHE (Minister of National War Services):	Mr. Speaker, may I
table copies of orders in council P.C. 5060 and 5061 of the 4th of this month. With regret may I say the first accepts the resignation of Mr. Rene Morin as chairman of the board of governors of the Canadian Broadcasting Corporation, and the second appoints Mr. Howard
B.	Chase to replace Mr. Morin.
May I explain that Mr. Morin has been connected with the board of governors of the Canadian Broadcasting Corporation since September 10, 1936. He consented to his appointment as chairman being renewed in November, 1942, but at that time he told me he could not give any guarantee that he would serve for the full period. Some time ago he intimated that his other duties had increased to the extent that he should tender his resignation as chairman. In doing so, he expressed appreciation of the staff of the Canadian Broadcasting Corporation and of his colleagues, and he was kind enough to say a word about the minister as well.
I am particularly pleased to be able to announce the appointment of Mr. Chase, which marks, I believe, some special recognition of labour. He has merited well of Canada and I know he will do so in his new appointment.
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, may I ask the
Minister of National War Services, on motions rather than on the orders of the day, a question arising out of the statement which he has just made. Is Mr. Morin still serving on the board of governors?
Mr. LaFLECHE:	Oh, yes. He has been
good enough to remain as governor.


Gordon Graydon: May I ask when we may expect the order in council appointing a general manager of the corporation?
Mr. LaFLECHE:	It cannot be before I
receive a recommendation from the board of governors, which recommendation I have not yet had.


Gordon Graydon: There never was such a deday as that.
Mr. LaFLECHE: They are doing very well, indeed.


Gordon Graydon: You do not have much
support for that in the house.
Mr. LaFLECHE: Not from you, no. PRIVILEGE



MR. MCCANN-REFERENCE TO PRESS DISPATCH IN &quot;GLOBE AND MAH.&quot; OF JULY 6

Mr. J. J. McCANN (Renfrew South):: Mr. Speaker, on a matter of privilege and as chairman of the parliamentary committee on radio broadcasting, I wish to make a brief observation based upon a press dispatch appearing in the Globe and Mail of July 6. The dispatch reads as follows:
Ottawa, July 5.-The parliamentary committee on radio broadcasting likely will recommend removal of the $2.50 licence fee, Douglas G. Ross, P.C., Toronto, St. Paul's, said to-day. The committee is currently in final session to draft recommendations to parliament.
This statement has been given wide publicity, and will no doubt receive further publicity. Let me say that the last two meetings of the radio broadcasting committee were held in camera; the statement issued did not emanate from the radio broadcasting committee and must be regarded as the personal opinion of the hon. member for St. Paul's.


Mr. REID:: I hope there is some truth in it.



TAX CONVENTION ACT, 1944 CANADA-UNITED STATES OF AMERICA-RATIFICATION OF CONVENTION SIGNED AT OTTAWA, JUNE 8, 1944

[Stage Direction]
Hon. C. W. G. GIBSON (Minister of National Revenue) moved for leave to introduce bill No. 159, respecting a certain tax convention between Canada and the United
Questions
[Stage Direction]
States of America, signed at Ottawa, in the Dominion of Canada, on the eighth day of June, 1944.
Gordon Graydon: May I ask the minister to explain?


Mr. GIBSON:: I gave a full outline of the provisions of the convention for the avoidance of double taxation in regard to succession duties on June 16 in this house. The bill is to ratify the convention with the United States.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. BERTRAND (Terrebonne):: 1.	Is Mr. T. Panos in the employ of Wartime Housing, distinct of Montreal?
2.	If so, what is his position?
3.	When was he appointed?
4.	Was his appointment protested? If so, by whom?


Mr. CHEVRIER:: 1.	Yes.
2.	District supervisor.
3.	February 1, 1944.
4.	Yes. Mr. Charles David.


SIXTH VICTORY LOAN
Mr. HATFIELD:: _ 1. What was the total cost of the sixth victory loan?
2.	What was the total cost in the province of New Brunswick?
3.	Wihat was the cost in (i) Canada; (ii) New Brunswick, for (a) commissions; (b) salaries;
(c)	radio programmes; (d) advertising; (e) living and travelling expenses; (f) rentals; (g) other expenses?
4.	What was the total amount subscribed in (i) Canada; (ii) New Brunswick?


Mr. ILSLEY:: 1.	The total cost of the sixth victory loan will not be known until all accounts have been received. As at May 31, 1944, expenses charged to sixth victory loan aggregate $3,829,927.83.
2.	The total cost of the sixth victory loan in the province of New Brunswick will not be known until all accounts have been received. As at May 31, 1944, expenses charged to sixth victory loan in relation to the province of New Brunswick aggregate $30,389.43.

3.	The amounts disbursed down to May 31, 1944, and charged to sixth victory loan are as follows, those under (ii) New Brunswick being the items paid from the New Brunswick office of the committee:
(i) (ii) New Canada Brunswick
(a)	Commissions	$ 286,090 75	(b)	Salaries	
522,524 13 $9,553 16(c)	Radio programmes. 15,975 70	(d)	Advertising	
501,565	86	3,060	12(e)	Living and travelling expenses....	351,230	01	9,942	20(f)	Rentals	
72,333	78	1,495	16(g)	Other expenses....	2,096,183	30	6,338	794.	The total amount subscribed to sixth victory loan has not yet been determined, but the published figures as at May 19, were as follows: (i) Canada, $1,388,524,900; (ii) New Brunswick, $30,536,800.


TRAINING FOR SERVICE IN AMGOT
Mr. DIEFENBAKER:: 1.	Are officers in the army, navy and air forces in Canada being given an opportunity to take courses preparatory to service in
"AMGOT"?
2.	If so, how many have actually been given the course ?
3.	How many Canadians is it anticipated will be utilized or absorbed in "AMGOT"?


Mr. MACDONALD (Halifax):: 1.	Navy, army and air force officers from units in Canada have been trained at staff courses for civil affairs.
2.	1 naval officer, 108 army officers and 19 air force officers from units in Canada have been given the Canadian civil affairs staff course at Royal Military College. 11 army officers were despatched overseas in December, 1943, for a course in civil affairs, and in addition 28 army officers will shortly be despatched for a course commencing in August, 1944.
3.	It is expected that all officers now trained or being trained in civil affairs work will eventually be utilized. It is not possible to say whether this will be the ultimate number as this depends on conditions in Europe.


WARTIME HOUSING-UNITS BUILT AND PROJECTED
Mr. BRUCE:: 1.	How many separate housing units have been built in Canada by Wartime Housing?
2.	How many more are under construction or to be built?
3.	Where are these situated?

Questions


Mr. CHEVRIER:: 1, 2 and 3.
Location	Houses	Staff houses	Men's hostels	Women's hostels	Bunk houses	Houses under construc- tion
	150	1				
	500					
	100					
	200	2		1		150
Brownsburg, Que		100					
	100					
	400	3				
Chicoutimi, Que		100					
Collingwood, Ont		150					
	50					
	250					
	93					
	203					147
	275	1				
	242			1		
	326	2		1		
	100	1				
	50					
Halifax, Dartmouth and Eastern Passage,						
N.S	1,472	15	5	R453	1	1	2001	Hull, Que	150	50100	325	1	10	75	100	1	50	200	1	200	1	1	92	50	200	50	136	3	250	220	75	50	10040	130	559	1	600	400	5	50	522	9	2	200	69	50	683	3	1	150	3	2	5037	1	1	100	250	200	303	350	2	7	Valley field, Que	10	759	2	150	50	1	25	757	6	1	2,050	25035	250
Total		17,176	59	4	10	18	1,197
Questions



VENEER LOG SUPPLY, LTD.-BIRCH AND MAPLE VENEER LOGS


Mr. DIEFENBAKER:: 1.	Has any purchase of land been made for airport purposes since the 1st of January, 1943, at the following centres, Vancouver, Edmonton, Regina, Winnipeg, and Malton?
2.	If so, what are particulars of each purchase, including number of acres and price per acre?


Mr. CHEVRIER:: 1.	Yes, at Vancouver, Edmonton and Regina, but not at Winnipeg or Malton.
2.	See statement below.
Acquisition of Land since January 1, 1943
Name		Area	Amount	Remarks
Edmonton-				
Crown Paving Co Ltd	11 sub lots..	.$ 5,400 00	Release of leasehold interests.F.W. Lobb	1 sub lot..,	. 2,000 00	Includes removal of buildings.J. M. Duncan	1 sub lot..,	. 200 00	Release of leasehold interest.E. E. King	1 sub lot..	. 1,500 00	Includes removal of buildings.M. A. Mitchell	1 sub lot..	. 1,700 00	Includes removal of buildings.S. A. Mills	1 sub lot..	. 800 00	Includes removal of buildings.L. McVeigh	1 sub lot..,	. 1,200 00	Includes removal of buildings.A. L. Young	1 sub lot..	. 2,000 00	Includes removal of buildings.M. E. Tull	1 sub lot..	. 1,050 00	Includes removal of buildings.LI. J. Marks	1 sub lot..	. 1,200 00	Includes removal of buildings.E. A. Burgett	1 sub lot..	. 925 00	Includes removal of buildings.L. & M. L. Lachman	2 sub lots.	. 1,500 00	Includes removal of buildings.E. E. George	2 sub lots.	. 300 00	Includes removal of buildings.A. & R. Wilkie	1 sub lot..	. 650 00	Includes removal of buildings.Vancouver-	E. Cooney	0-71 acs.	. 449 90	Includes loss of crop.B.C. Bridge & Dredging Co.	0-46 acs.	. 23 00	J. J. Grauer & Sons, Ltd....	1-01 acs.	. 800 00	Includes loss of crop-severance.J. Williamson	65-34 acs.	. 26,986 00	Includes loss of rental and damages -rate S400 per acre.W. A. Hayward	45 acs.	. 40,000 00	Includes buildings.J. & A. G. Boyd	0-6461 acs.	. 2,270 00	Includes loss of crop and severance.E. G. Sherwood	0-182 acs.	. 91 00	E. G. Donegani	0-3162 acs.	. 1,960 00	Includes damages and depreciation.Regina-	Rural Municipality of Sherwood..	16 sub lots.	. 81 05	J. Simpson	3 sub lots.	. 75 00	W. C. Faulkner et al	14 sub lots.	. 200 00	A. Leinweber	5 sub lots.	. 125 00	A. MacBeth	. Appr.	158 acs.	. 6,500 00	Exchequer court award.FREQUENCY OF CREAM	COLLECTIONS,	Mr. ILSLEY:	QUEBEC AND ONTARIO	1. Three	times weekly during months of


Mr. FRASER (Peterborough West):: 1. How often are the Quebec creameries allowed to collect cream from the Quebec farmers?
2. How often are the Ontario creameries allowed to collect cream from the Ontario farmers?
3.	Is there a difference 'between the collection by Quebec and Ontario creameries? If so, why is there this difference?
4.	Do any Quebec creameries collect cream in Ontario?
5.	If so, how often do they collect cream in Ontario?
June, July and August, twice weekly during May and September, and once weekly from October 1 to April 30, both inclusive. (Due to road conditions, collections in many Quebec areas are suspended, or made only intermittently, during most of the period last mentioned).
2.	With minor exceptions, twice weekly from July 3 to August 26, three times every two weeks from May 1 to July 2 and from August 27 to September 30, and once weekly from
Questions as Orders jor Returns

October 1 to April 30. Exceptions are collections made on behalf of creameries serving two sparsely settled communities in northern Ontario and one in northwestern Ontario. In these, collections are permitted as often as twice weekly from May 1 to September 30 (once weekly during the balance of the year) for reasons indicated in the reply to question No. 3.
3.	Yes. The maximum frequencies authorized for the collection by truck of churning cream at different seasons in Ontario and in Quebec (under the provisions of Administrator's Order No. A-533 of the Wartime Prices and Trade Board) have been governed by the frequencies found to be required in order to prevent deterioration of the product and, in turn, largely by the extent and effectiveness of farm cooling facilities available generally in the respective provinces. Experience has shown that on. this basis the more frequent collections permissible in Quebec than in Ontario during the months of May to September, both inclusive, are necessary, and that currently authorized maximum collection frequencies in Ontario are adequate. Recently as a result of weather conditions, an increase was authorized in the maximum frequency of collections of churning cream in Ontario generally during the period July 3, 1944, to August 26, 1944, from three collections every two weeks (as in 1943) to two collections weekly.
4.	A very small number of Quebec creameries situated near the interprovincial boundary have been authorized to collect cream in nearby Ontario areas, but only over routes served by them before the controlling order became effective (January 1, 1943). The volume of such collections is relatively insignificant.
5.	Such Quebec creameries are permitted to 3ollect cream in Ontario. No more often than Ontario creameries operating in the same areas may collect in that province, as set out in the reply to question No. 2.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. PURDY:: By provinces, what has been the cost to the federal government (including unpaid balances outstanding) for seed grain during the past twenty years?


TERRACE, B.C., AIRPORT
Mr. BRYCE:: 1.	Has a hardware store operated by E. T. Kenney, at Terrace, B.C., supplied stores to the airport at Terrace?

2.	If so, what amounts have been involved in the supply of such stores?
3.	Were such stores supplied on a commission basis and, if so, what amounts were involved in commissions?
4.	If such stores were not supplied on a commission basis, on what basis were they supplied?


HEMLOCK AUTOMOTIVE CRATING
Mr. COLDWELL:: 1.	How many carloads of hemlock automotive crating were shipped from British Columbia into Ontario for the automotive crating trade in the first five months of 1944?
2.	How many carloads of hemlock, from what mills, and what quantity from each of the mills was supplied in the above period?
3.	What are the names and numbers of cars of hemlock and fir received by each motor company or box factory in Ontario in the above period?
4.	Is it on record in any government department that the Coast Sawmills Limited is affiliated in any way with H. R. MacMillan, or the H. R. MacMillan Export Company?
5.	Is Mr. K. M. Brown, the present deputy timber controller, on loan from Coast Sawmills Limited at $1 per year, or is he paid by the government? If so, what is his salary?
6.	Is Mr. A. G. Wilmot, automotive crating director, paid by his own company, Canfield-Wilmot, or paid by the government? If he is paid by the government, what is his salary?
7.	Are there any government records showing that Canfield-Wilmot or Coast Sawmills Limited received any commissions or remuneration on any of the hemlock automotive crating shipped in the first five months of 1944? If so, on how many cars did each company receive commission or earnings?
8.	Is a complete record of all lumber shipped in Canada kept by the timber control office so that the above information must be 'a matter of record and not difficult to produce?
9.	How many cars of merchantable spruce lumber were shipped from Quebec, New Brunswick and Nova Scotia to the United States in the first five months of 1943?
10.	Are hemlock boards 11/i6" thick still being shipped to the automotive trade in Ontario from British Columbia? If not, why was shipment stopped ?
11.	Were UA6" hemlock boards costing the box and motor companies approximately $50 or more per thousand delivered in the above period? Was this approved by the controller?
12.	Were a large quantity of these boards green and wet, and about how much of the $50 cost was allowed by the controller for extra freight?
13.	If $50 was not the delivered cost, what was the approximate delivered cost?
14.	Was the ceiling price of eastern spruce uA6" boards delivered Toronto, Ontario, in above period, $41.50 plus overweights of about $1.50 per thousand feet, making the delivered cost not more than about $43 per thousand on a Toronto freight rate?
15.	Were there any protests registered to the Department of Munitions and Supply or the timber controller by the .box companies or the government inspectors, or any one else against

Questions as Orders for Returns
the use of hemlock hoards in automotive crates in the last five months? If so, give details and names of -those -protesting.
16.	Are automotive boxes made from this hemlock causing trouble and have they deteriorated? Are hemlock boards still being shipped as automotive crating?
17.	Is some of this replacement and repair work being done by ordnance at Longue Pointe, Quebec? Is it being done at any other depots?
18.	Has the transport controller or any other controller protested to the Department of Munitions and Supply or any other department of the government about the unsatisfactory condition of these hemlock -boxes? If so, give particulars.
19.	If these hemlock boxes are already giving trouble, what does the department anticipate their condition will be if they are exposed to sun and rain for another ninety days?
20.	What will be the cost of re-crating or repairing these hemlock boxes; how much has been spent to date, and what expenditure is anticipated this year to re-crate this material so that it can be shipped to the war theatres?
21.	Has Mr. A. G. Wilmot, automotive crating controller, resigned? If so, who has been appointed in his place, and what are his qualifications, or why was he appointed?
22.	Have any of the automobile companies asked the government or the timber controller to allow them to nominate a man from the lumber purchasing department of one of their automobile companies to act as automotive crating director to replace Mr. A. G. Wilmot?
23.	Have any of the lumber companies interested in supplying automotive crating made any recommendations to the Department of Munitions and Supply or the timber controller in the -past year and a half with regard to the selection of -the automotive crating controller? What was this recommendation, and was it considered?
24.	Was any suggestion made to the timber controller or the Minister of Munitions and Supply in writing by any company in the lumber business with regard to the resignation of the deputy timber controller, K. M. Brown, or the appointment of his successor?


WHEAT-PARTICIPATION CERTIFICATES
Mr. HANSELL:: 1.	Have the participation certificates -been paid for the wheat crop years 1940-41, and 1941-42, and 1942-43?
2.	If not, would the government give the reason for the delay?
3.	For the purpose of income tax, is money received by farmers by reason of participation certificates, considered to be part of the income for the year in which the payment is made?
4.	If so, has the government considered it advisable to -make suitable adjustments to have these payments considered to be income -for the crop years to which they apply, and, when does the government expect to announce their decision in respect to this?


FLAX PROCESSING-PRAIRIE VEGETABLE OILS LIMITED
Mr. BENCE:: 1.	What assistance, if any, was given by the dominion government to Prairie \ egetable Oils Limited of Moose J-aw, Saskatchewan, with respect to the construction of a flax processing plant at Moose Jaw, Saskatchewan?
2.	From what source did the said Prairie
Vegetable Oils Limited obtain the machinery now being used at its plant in Moose Jaw, Saskatchewan?	.
3.	What permission, if any, was given -by the dominion government, with respect to the importation of such machinery?
4.	Who is the president and/or managing director of the said company?


FLAX PROCESSING-W. R. CARPENTER (CANADA) LIMITED
[Stage Direction]
. Mr. BENCE;
1.	What assistance, if any, was given by the dominion government to W. B. Carpenter (Canada) Limited, with respect to the construction of a flax processing plant at Hamilton,
Ontario?	, ,,	., w
2 From what source did the said W. K. Carpenter (Canada) Limited obtain tile machinery now being used at its plant in Hamilton, Ontario?	.
3.	What permission, if any, was given by
the dominion government, with respect to the importation' of such machinery?	.
4.	Who is the president and/or managing director of the said company?
PROCESSING OF VEGETABLE OIL BEARING MINERAL/

Mr. BENCE:: 1.	What assistance, if any, was given -by the dominion government to Victory Mills Limited, Toronto, in connection with the construction at Toronto, Ontario, of a plant for the processing of vegetable oil -bearing materials? _
2.	From what source did the said Victory Mills Limited obtain t-he machinery now being used at its plant in Toronto, Ontario?
3.	What permission, if any, was given by the
dominion government, with respect to the importation of such machinery?	.
4.	Who is the president and/or managing director of the -said company?


IMPORTATION OF POTATOES FOR STARCH MANUFACTURE
Mr. HANSON (York-Sunbury):: 1.	What quantity of potatoes were imported from the state of Maine through the port of St. Leonard, New Brunswick, during the months of March, April and May, 1944?
2.	Were any of these potatoes manufactured into starch, and were they imported for that purpose?
3.	If so, and to the extent that such potatoes were manufactured into starch, who manufactured them and at what plant?
4.	Was the approval of the Minister of
Agriculture secured before such importation took place?	'
5.	Did the Minister of Agriculture -for New Brunswick request or seek such importation?
Brandon Training Centre


CANADIAN ARMY
[Stage Direction]
On the orders of the day:
Hon. J. L. RALSTON (Minister of National Defence):: On June 26 the hon. member for Brandon (Mr. Matthews) stated, as appears in Hansard, page 4145, that it had been brought to his notice that on the closing of the A-4 training centre in the city of Brandon a large amount of surplus supplies were destroyed instead of being sold for salvage or turned over to citizens who could use them. I advised the house at the time that inquiries in the matter would be made forthwith.
I now want to say that a very full investi-[DOT] gation has been made. Statements have been received from officers concerned with the disposal of the supplies. Colonel W. G. B. Dailley, the chairman of the army salvage and disposal board, proceeded to Winnipeg and to Brandon, where he interviewed not only officers concerned but also a number of civilians who were mentioned as being critical of the manner in which the surplus supplies were dealt with.
The supplies disposed of were barrack stores consisting for the most part of earthenware, enamelware, and retinned mess-hall and kitchen utensils. All serviceable and nonserviceable stores which could be repaired or had salvage value were first gathered together and turned over to a central point for storage and shipment to ordnance. All stores considered to have no salvage value, such as plates, cups, saucers, enamelware, garbage pails, brooms, brushes, et cetera, were then gathered together in central locations throughout the camp for final inspection and disposal. They were then examined piece by piece by an officer and non-commissioned officers and a decision reached as to whether they were fit for further use or worth the cost of their return to ordnance in Winnipeg.
A total of 3,343 articles, having an original value of $2,169, were condemned and destroyed out of a total of 34,712 articles returned to ordnance by the units concerned, having a total original value of $45,338. This represented 9-6 per cent by number and less than five per cent by value. Approximately eighty per cent of the stores condemned and destroyed were enamelware articles, which had been condemned by the medical authorities.
The articles destroyed were put on the city dump and not sold as salvage because their value as scrap in the location where they were was considerably less than the cost would

be of the handling of them and the freight for their transportation to any place where they could be sold. The army authorities examined the articles carefully and took every precaution to save any which were reparable.
I should point out that articles which might appear suitable for civilian use on a cursory examination might nevertheless be properly condemned for military use under army regulations in the interests of the health of the troops, and of the health of civilians as well for that matter.
lam satisfied there was no breach of regulations or any waste of army property in the action taken at Brandon.


CLOTHING ALLOWANCE TO DISCHARGED PERSONNEL
[Stage Direction]
On the orders of the day:
Mr. T. L. CHURCH (Broadview):: I wish to ask the Minister of National Defence a question arising out of a return filed on May 18 as to the sufficiency of the $65 clothing allowance. Has anything been done since then? Returned heroes are going around in winter clothing.


James Layton Ralston: As I stated before, the matter is having consideration along with a number of rehabilitation measures, and I think an announcement will be made with reference to it, along with these other matters.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: I desire to direct a question to the Minister of Munitions and Supply, based on a telegram received from the board member of the United Mine Workers of America, at New Glasgow, Nova Scotia, to the effect that miners at the Allan shaft, Acadia Coal company, have been notified by the management that working conditions have been changed, without consultation with union officials. This constitutes a violation of contract on the company's part. Miners are idle, protesting against this action by management. Is the department aware of this situation? If so, what steps are being taken to avoid serious loss of production?


Honr C. D. HOWE (Minister of Munitions and Supply):: Mr. Speaker, this would seem to be a labour matter, as the question refers to an agreement between a union and a private firm. I suggest that my hon. friend direct his question to the Minister of Labour.

Housing Evictions


Clarence Gillis: Yesterday when I received this telegram I took the matter up with the Department of Labour. So far as that department is authorized to do so they are handling that end, but they advise me that the matter of production is one which comes within the province of the Department of Munitions and Supply and that I should raise it there.


Hon. HUMPHREY MITCHELL (Minister of Labour):: I think it should be said1 that
this is a normal industrial dispute. I say on my responsibility as Minister of Labour that immediately we had the notice of this dispute one of our senior conciliators got in touch with the parties concerned. That is the normal proceeding; it happens almost every day of the week, although people do not always go on strike; sometimes we can get in before they walk off the job. Hon. members can rest assured that everything that can be done is being done by the conciliation branch of the Department of Labour to get the men to go back to work and resume normal operations.

ISSUE OF CHEQUES FOR PARTICIPATION CERTIFICATES	-
On the orders of the day:


Hon. T. A. CRERAR (Minister of Mines and Resources):: A few days ago the hon. member for Lake Centre addressed a question regarding what he stated was delay in the issuance of participation certificates covering the balances coming to farmers in western Canada. I told him that I would get some information upon it.
I find that the matter was under consideration in the committee of agriculture when the chairman of the wheat board appeared before that committee on June 28, and Mr. Mclvor gave a full statement about it. Any supplemental information I have simply indicates that the cheques are going out as rapidly as possible. Something over 100,000 cheques have been issued, and the rest are going as quickly as an office force, which I understand comprises 200, can get them ready to be sent out.



HOUSING


[Stage Direction]
On the orders of the day:
Lionel Chevrier: On the orders of the day of June 30 the leader of the opposition (Mr. Graydon) asked a question based upon a press clipping which he was good enough to send me. The question was whether or not in a particular
industry families of war workers who had enlisted for overseas service had been evicted by Wartime Housing Limited. The answer to the question is no. It is not the policy of Wartime Housing to evict families of war workers who have enlisted for overseas service or who have been called up for military training. In fact, the officials of wartime housing with whom I have been in communication inform me that they know of no case in which war workers enlisting for overseas service under these circumstances have been evicted from any of their units. The policy in fact h-as been quite the contrary. At Welland, which was mentioned in the press clipping, there are at the moment twenty-eight soldier families now being housed, who are living in those units.


Gordon Graydon: May I point out to the parliamentary assistant that this particular matter was raised, I believe, by the mayor of the municipality of Welland. He was the person who made the statement. Will the department consider communicating with the mayor to clear this matter up? He is an important and responsible official, and the statement having come from him at a convention of municipalities, it seems to me that the matter should not be allowed to drop just there.


Mr. LOCKHART:: Arising out of the
statement made by the parliamentary assistant, may I ask whether the policy of notifying soldiers' wives to vacate has been discontinued? If the parliamentary assistant wishes to know of cases where they have been notified to get out and where pressure has been brought to bear upon them, I can give him information. There must have been a change of policy.


Lionel Chevrier: I know of no case where notices have been given by Wartime Housing Limited to families of soldiers who have enlisted for overseas service or have been called up under the regulations.


Norman James Macdonald Lockhart: At any time?


Lionel Chevrier: I am informed by the
officers that there are no cases where notices of eviction have been given. If my hon. friend knows of some I shall be glad to take them up.


Norman James Macdonald Lockhart: I am not speaking of
eviction, but of definite notices to vacate. I did not say they were evicted, but I want to know whether the policy has been changed in regard to notifying them that they are expected to move out.


Thomas Langton Church: The Minister of Munitions and Supply will have on his hands a serious situation in housing next fall all over Canada unless something is done right away..
The Budget-Mr. Castleden



THE BUDGET


[Stage Direction]
The house resumed from Wednesday, July 5, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Mr. Rowe.
Mr. G. H. CASTLEDEN (Yorkton):: I wish to refer briefly to certain clauses in the budget which to our group are objectionable, and in a general way to point out wherein the 1944 Canadian budget has failed to meet the needs of 1944 Canada, which is looking to the future.
It is just a month ago to-day that the allied forces swarmed across the English channel to the Cherbourg peninsula and there established themselves on what appears at the present time to be the prelude to victory. The price is being paid to-day, as it has been paid by Canada for a number of years. The constantly increasing lists of casualties which reach our desks daily keep Canada informed of the price she is paying-the price which the common people of this country are forced to pay in order to establish and maintain peace and a hope for the common man in the future of the world.
There are evident now some very broad shapes of things to come. Some of them are these. Among the victorious allies there is a determination that a return to some of the old things of the world as we knew it must never be permitted. The dead past cannot return. To-day the common man is on the march to a better world. It is only natural that this war should bring about some great changes in the thinking and demands of the people throughout the world. In the first place, we have to remember what the world has suffered in the past fifteen years-first, ten years of a devastating depression, and then five years of a devastating war. The impact of these two events upon humanity throughout the world, and the constantly improving conditions and facilities for communication between different parts of the world, must of necessity bring about some change in the thinking of people everywhere. We do not condemn the budget as a war-time measure in support of the war; we are all solidly behind it; but we do condemn its failure to look forward to the needs of the people of Canada who are and have been suffering for the past two decades.
The common man as he looks over Canada's budget in 1944 is impressed by one or two things. Number one is that he sees his pay envelope with fewer deductions from it, but

he knows that this means greater victory loans. One thing that does alarm him, however, is the constantly increasing national debt. We are not paying for the war. It will have to be paid for in the period that follows the war. Therefore we believe that this budget should have given some vision and some hope to the people that plans are being made now to make it possible for Canada to carry the load.
Prior to this war the national debt of approximately three billion dollars taxed the capacity of Canada's national income to carry it. Year after year we were borrowing money to pay interest on that debt. The debt was constantly increasing. I had hoped that the Minister of Finance, before he completed his discussion of the budget, would outline to the Canadian people what plans he has under the economy which he supports to take care of post-war financing the war and paying for it. Or are the Canadian people to expect a return to the excuses handed out to them following the last war? We are told that there is no money for social reform. "If you must enjoy the luxury of war, you have to pay for it." As one member of a delegation appearing before the reconstruction committee said, referring to paying for war, "If you are going on a spree, you must expect a headache to follow." We were told that we could not have security because of the great debt we had incurred. We feel that the budget of 1944 has failed because it has failed to meet that particular demand. The Canadian people are looking forward to something better than they had in the pre-war days.
What is the story of Canada? Seventy-seven years ago on July 1 last Canada was formed into a confederation. It was the richest land for its population, in the world. The comparatively few people in it have nearly half of the north American, continent with all its vast resources. The governments of this countiy were entrusted with the job of developing those resources-for what purpose? Surely the first purpose should be to supply the needs of the people in this land, to provide our people with the things that they require for decent living. Can anybody in this house maintain that they have succeeded in that? They have given away the resources of this country, largely to private industry, in many cases to monopolistic industry. All the Canadian people have asked is that they be given the opportunity to work in the factories and plants of industry to develop the resources, and in return for that labour be provided with an income with which they can supply themselves and their families with a decent living. In spite of the fact that these industries have our resources, large deposits of coal, nickel

The Budget-Mr. Castleden
and other minerals, the vast resources of waterpower, vast forest resources, the wealth of Canada from one end to the other, the economic organization of this country has failed to provide the Canadian- people with the bare requirements essential to enable them to attain a decent living standard.


Thomas Reid: It is on a much higher level than that of any other country.


George Hugh Castleden: Tell that to the millions of people who were on relief in Canada in 1937.


An hon. MEMBER:: Take some other period.


Mr. COLD WELL:: Take it for ten years before the war.


Mr. SPEAKER:: Order.


Thomas Reid: Stand up and say it.


George Hugh Castleden: How about doing that yourself?


Thomas Reid: I will.


Mr. CLEAVER:: Will the hon. member permit a question?


George Hugh Castleden: I am making my speech now. I listened to you making yours and I did not interrupt. If I have time before my forty minutes are up I will permit questions from the hon. member.
Let us look at the 1944 budget and find out what has been done with regard to certain concessions to industry which operated in this country prior to the war. I refer hon. members to page 4181 of Hansard of June 26. I should like to read to the house a portion of the first paragraph on that page. It is as follows:
The proposal is that one-half the expenditure on maintenance and repairs, incurred in a period to be fixed by the governor -in council, may be charged against the income of a previous fiscal period but not farther back than the fiscal periods ending in 1943.
The next sentence is particularly significant:
In the case of the mining industry, maintenance and repairs will be held to include also underground development work.
With regard to income tax, that means the mining industry of Canada are going to be permitted to charge one-half of the expenditure of underground development against their income. Notice that the governor in council is given the power to determine the particular period. Order in council government has certainly reached dangerous limits in this land when the budget turns over to the governor in council the right to determine the period, and later on what particular areas, shall be affected with regard to oil development. This is the kind of thing which Canadians would do well to watch and curb.
The next paragraph affects practically all industries in Canada. This is what the budget says when referring to research work:
The classes of expenditure for research are not allowed as an expense of doing business: capital expenditures such as for laboratories, pilot plants, et cetera, and current expenses for research which are not directly related to the firm's immediate production activities. It is recommended that these limitations be removed and that all expenditures on research be -allowed in the year of expenditure and that research expenditures of a capital nature be written off as an expense over a period of three years.
In effect, that means that industry can carry on research and charge the cost of it back as a part of the expense of doing business, and thus reduce their taxable surplus. In other words, it means that to a large extent, the Canadian taxpayer is to pay for the research, but will get nothing out of it. Industry will gain all the benefits of the research. It will not be available to the people of Canada except that they have to pay through industry for the price of the commodity. It means that the benefit of scientific and technological development will go only to those who have the power to continue their exploitation of the- people.


Mr. HOMUTH:: No; that is not fair.


George Hugh Castleden: The results of scientific research in Canada will become the property of that particular industry. They will put the cost of it in the price of the commodity, and if the people can afford to buy it they will pay for it. If they cannot afford to buy it, they will not get it.


Karl Kenneth Homuth: That is a most unfair argument.


George Hugh Castleden: The costs of research are now charged as a part of the operation of business, thereby reducing the taxable income of the companies.


Karl Kenneth Homuth: No.


George Hugh Castleden: That is according to the budget. You may read it yourself.
I should now like to refer particularly to what is said about the oil industry. I refer hon. members to page 4183 of Hansard where the following appears:
The budget resolutions therefore include a recommendation to provide a tax credit of fifty per cent of the cost of any well drilled in the selected areas and spudded in between June 26, 1944, and March 31, 1945, if such well proves to be unproductive. This tax credit will be allowed only with respect to projects recommended by the Minister of Mines and Resources and approved by the governor in council.
Again special consideration is to be given to those particular cases which are recommended by the Minister of Mines and Resources and approved by the governor in

The Budget-Mr. Castleden
council, and the special prospecting grants with regard to which a tax credit has been given are being extended for another year to the prospecting syndicate.


Karl Kenneth Homuth: Whose money goes into it?


George Hugh Castleden: The tax exemptions are there, but the company makes the profit. It really means in the end, so far as such concessions are concerned, that private and in many cases monopolistic industry in Canada, dying of its own selfishness, now bleeds the public treasury to prolong its life and increase its power to exploit both Canada and Canadians.


Colin William George Gibson: Do you object to the encouragement of oil production?


George Hugh Castleden: I do not think that the big oil monopolies of the world require any special concessions such as they have had in the past, particularly through orders in council of this government. Most of the oil companies are well able to take care of themselves. I do not see why special concessions should be granted to them. So far as this budget is concerned there is no indication as to whom the concessions are to go, to the small man or to the big man.


Karl Kenneth Homuth: Well, you have reduced wages in Saskatchewan already.


George Hugh Castleden: There are indications
that we have need of a budget which will provide for the economic and social welfare of the people before consideration is given to these rewards to capital. The health, education and well-being of the Canadian people should take precedence over the dividends paid to shareholders. Surely the Canadian economy can be so organized that our people will not be forced to stagnate under a system of private enterprise which recognizes no social responsibility and operates only to the extent to which it can extract profits.
The Canadian people were looking for something more than this in the budget of 1944. They were looking for something that would curb the powers of those people who in the past have done so well at the expense of the worker and the common man. The great Canadians of to-day should receive first consideration in any budget, and by great Canadians I mean those who have laid down their lives in this world conflict; I mean the wounded who are returning to us in increasing numbers; I mean the soldiers who have done their bit and are being brought back to this country; I mean the men and women in khaki, the fathers and mothers, the wives and sweethearts of our soldiers, some of whom have lost their dearest
'Mr. Castleden.]
and best in this war. I refer to the workers in the factories and fields, to the toilers who produce the wealth of the nation. What do those people want? What do they ask for to-day? Were the wants, the hopes and aspirations of these people in the minds of those who framed Canada's budget? I do not think so. Surely the sacrifices they have made deserve more than the hopelessness of the past, the low wage standards, the want, the slum conditions, the low educational standards, the denial to our young people of the right to live, the right which was denied them in the era to which hon. gentlemen to my right refer. Shall the Canadian people beg of industry the right to toil at low wages? Shall the farmer and producer continue to beg for a decent return for his products from monopolistic processors and those who purchase the products of their toil? Shall the consumer be compelled to continue to pay toll to those who control the very necessities of life?
The economy of Canada should be so arranged that there would be no scarcity in this land. Leisure could be used for recreational and cultural development.
Let me outline a typical project which might be undertaken at a time like this if there was any assurance that the necessary money would be forthcoming, that the economy of this land would be so changed that we could afford it. We have now something like 32,000 women in the armed forces of this country. When the war is over a large number of these women will be looking for a place in our economy. From that group of women we could develop a force of trained, experienced social service workers who could go into all parts of Canada and assist in instituting a health programme, in educating our people in the standards of nutrition; in carrying on cultural activities in various community centres; in bringing the story of our great Canadian national life to all parts of the country;, promoting national unity and giving people all over Canada an opportunity to give expression to themselves in the work they do. But if the 1944 budget is any indication, I am afraid Canada will not be able to afford that.
In this very city we have an example of what can be done in a democratic way by a group of enterprising people. I refer to a voluntary organization known as the Civil Service Recreational Association. Hon. members would be well repaid if they would take the trouble to look into what these people have done in order to enlarge the lives of those people who otherwise would be limited to humdrum office work. Now they have

The Budget-Mr. Caslleden
recreation; they have cultural activities; they have choirs and music; they have drama; they have sports and recreational activities of all kinds, almost one hundred in all. Many of them have discovered within themselves talents they never knew they possessed.
The Canadian people live to a great extent in frustration because of a lack of opportunity; throughout their lives they are forced to conform to a particular design, sitting behind a desk with no other means of expression.


Thomas Reid: They should take up the
bagpipes.


George Hugh Castleden: I was speaking of
music.
There are signs that the Canadian people will no. longer tolerate what has gone on in the past. The other day the hon. member for York-Sunbury (Mr. Hanson) said that the leader and members of this group had started something they could not control. I should like to take a few minutes to outline just what we have started. I think perhaps the hon. gentleman's remarks arose from his regret that we had started something that he and his party could not control.
In 1932 and 1933 this party started a truly democratic people's movement in this country. The Cooperative Commonwealth Federation is an example of the real, democratic operation of a party. In any small poll or community in Canada a group of people may meet to discuss the problems of the country, and they join the Cooperative Commonwealth Federation. They send their delegates to the provincial convention., which is held every year. To this convention come representative workers, farmers, business men, doctors, teachers, lawyers and people from every walk of life. There they draft the programme, the policy and the philosophy of the C.C.F. party. At the annual convention these people chose their leaders democratically, and these leaders-


Hughes Cleaver: How is that different from any other party?


Thomas Vien: Order. I must remind
hon. members that these interruptions are not permissible except with the consent of the hon. gentleman who is speaking.


Thomas Reid: I was interrupted all the time I was making my speech.


George Hugh Castleden: These interruptions do not bother me, Mr. Speaker.


Thomas Vien: Hon. members must not interrupt the hon. gentleman without his permission. He is entitled to proceed with his remarks unless he indicates his willingness to answer any questions.


Hughes Cleaver: The hon. gentleman has said he does not mind interruptions.


Mr. COLDWELL:: The other evening, Mr. Speaker, you named an hon. member for continually interrupting.


Thomas Reid: I rise to a point of order. I am mot to be referred to in the same manner as the hon. member who was named the other night.


George Hugh Castleden: The point of order
having been settled, I shall continue. This movement, which hon. members are afraid we cannot control, holds also its biennial national convention. Executive leaders are chosen at each convention. There are executives and councils in the various provincial parts of this movement across Canada. I say there is no more democratic political party in existence in Canada. There are those who would like to control democracy. We want to see democracy controlling governments, and government by the people of Canada.
The common man in Canada to-day is aroused. He is determined that social wellbeing shall come first. Health, education and human welfare are to be the first aims and objects of the industrial, life and political organization of this country. If private profit prevents well-being,, then I say it should be replaced by a democratic and cooperative organization in society where service shall replace selfishness, as an expression of life.
May I say in closing that there are indications that the march of the common man is not confined alone to Canada, nor is it confined to the British empire. There is to-day the sound of the feet of the "common man" on the march, in his demand for a true recognition of the rights and importance of those who toil. It will not be denied. I condemn this budget as being reactionary. It may be Canada's last reactionary budget.


Mr. RALPH MAYBANK (Winnipeg South Centre):: Mr. Speaker, the remarks I wish to make this afternoon are suggested to me by three other speeches made in the house. I refer first to the speech of the Minister of Finance (Mr. Ilsley) in introducing the budget, and next to the criticism of the budget by the nominated critic of the Progressive Conservative party. I should like also to make some observations upon the speech delivered a few days ago by the hon. member for Vancouver-Burrard (Mr. McGeer).
The Budget-Mr. Maybcmk

I would say in the first place that, all things considered, in such times as these the budget is a good one. Pretty nearly everything possible by way of ameliorating conditions has been done-perhaps not everything, but the adjustments are many, and they are welcome. We cannot have, nor do I think we have any right to expect, a general lowering of taxation in war time.
Despite this truth it seems to me there is running through the speeches of members of this party sitting immediately to my left, the Conservative party, a longing, a sort of homesickness for the halcyon days of the last war, when wealthy men made large profits and did not pay much in taxes. Well, that sort of thing may be desired by some; but I am convinced that it is not desired by the rank and file of the people of Canada. We do not think that belts should be loosened at this time. With men bleeding and dying on the battlefields, in the air and on the seas we all know that the Canadian people cannot let up at this time; nor do they wish to do so.
Even in war time, however, there are some adjustments in taxation which can be made. Undoubtedly there has been pressure upon some people beyond what was just and equitable. An example will suffice to show what I mean. We had girl wage earners getting as low as $55 a month. If an increase were granted making $60 a month, taxation immediately stepped in and cut down that $5 to $1.50. In a year a $60 increase would be reduced to between $18 and $20. Absenteeism and damage to production were bound to result from that sort of thing. So that for practical reasons, as well as for the sake of justice, changes which should command approval have been made.
I say at once that I prefer to have an absolute exemption with respect to taxation, not an exemption such as we have at the present time which lasts only as long as a person does not have earnings above a certain stated amount. When we have a dividing line of that kind we are bound to get too great a spread between people on either side of the taxation exemption line.
Among the sixty odd changes which have been outlined in the budget speech, I think the one respecting alimony is worthy of attention. It is more important than would appear at first sight. Some of the injustices in the law as it stood were indeed simply outrageous. I know of a man who married a woman who had two illegitimate children. It was not very long before they added to the family, called "hers", some more children called "theirs." Then they were divorced, and he was ordered to pay alimony. Later he remarried, and there was more family.

Then came the taxes. Well, you can well imagine what happened. He was like the old woman who lived in the shoe, who had so many children she didn't know what to do. In his case it was that of having so many wives that he didn't know what to do; and also of having so many children that he didn't know what to do. On top of all, there were so many tax gatherers and so much taxes he was frantic. Everybody suffered. The budgetary proposal of to-day will remove such injustice, but it illustrates the nature of the change.
I now come to the criticisms of the budget offered by the Conservative party. I am bound to say that that criticism was well delivered. I remember hearing an old golfer speaking to another golfer who was looking for some praise in respect of his game. The old one said that the other fellow's stance was good That was as far as he would go. And so in this case I think we have to say that the critic of the Conservative party delivered his words of criticism in a very acceptable manner. So far, however, as the subject matter of the speech is concerned, the offering is entirely negligible. The speech was inconsistent, evasive and uncertain. Any positive suggestions are of decidedy small calibre.
So far as being evasive is concerned, let us take the position of that party on the subject of social security. In that respect they clearly evade the issue. The critic did pay some lip service to the general idea of social security. But all he offers, after opposing family allowances, is to set up a debating society to consider social security, to discuss it and to commune over it.
Their uncertainty of policy arises particularly in respect of their policy on manpower. The hon. member wants the men taken out of the army and put to work. Mr. McTague says that they should be kept in the army and sent to war.


Karl Kenneth Homuth: No, he did not. He would put them one place or another.


Ralph Maybank: The static has started
again.


Karl Kenneth Homuth: Static is all right in the
hon. member's speech.


Ralph Maybank: I can understand the
hon. member saying that static is all right. I can easily understand that he has some love for static. However, he does not like it so much when it comes into his own speech.


Karl Kenneth Homuth: It went over very well,
though, didn't it?

The Budget-Mr. Mnybank


Ralph Maybank: No person can talk
against the rumble of a truck. Mr. McTague, as I say, desires to have the men kept in the army, and sent to war. Mr. Bracken, who is the personification of uncertainty, says nothing at all. There is a well-known series of cartoons going around just now, in which the hon. member is pictured under the caption "Don't Ask Me."


Mr. ROWE:: On a question of privilege, I
believe I have the right to suggest to the hon. member that he is misinterpreting my statement. I did not suggest that they should be taken out of the army and sent back to the farms. I said they should be marshalled for the purposes for which they were conscripted. Therefore I say he is misrepresenting what I said. I would ask the hon. member himself whether, if the army needs men, and we have only three per cent of the allied forces, he would not agree to what I proposed that these men be sent overseas.


Thomas Vien: Order. There is no question of privilege.


Ralph Maybank: I felt quite certain when the hon. member began, Mr. Speaker, that your ruling would be that there is no question of privilege. I am quite certain that I did not misrepresent what the hon. gentleman said, I listened to him with great care when he was speaking the other day and read his remarks afterwards. Perhaps he may not have had as much to do with the preparation of his speech as is sometimes the case with persons who deliver speeches, and he may have forgotten WThat its contents were.
Then with respect to the inconsistency of the hon. gentleman, first he placed his party squarely against the abolition of compulsory savings on the ground that he was opposed to inflation, but shortly afterwards he advocated a different form of tax reduction in the nature of exemptions. Obviously if there is inflation in the one there is inflation in the other. You cannot very well say that there is anything consistent about an hon. gentleman who at one moment says that you must keep spending power out of the hands of the people and keep this impost of compulsory savings upon them, and in the next breath say that you must put more money into their hands to spend by way of granting them a tax exemption.
I have said that his speech was well delivered, and I certainly stand by that; I do not want to go back on that-not one W'ord. But when you come to consider the matter which the speech contains, it is not any wonder that Mr. Bracken hid himself
away. Last year Mr. Bracken sat opposite his chosen financial critic and watched him and heard him perform. But this year, having doubtless had something to do with the preparation of the speech, it seems that he felt that he could not stick it. Consequently we had the spectacle of him avoiding his usual observation post across from his nominated chief critic and sitting away back in the farthest gallery almost hidden by a post. At that distance, far away from the eyes of the pitying people, he probably felt that his duty to his party could be made supportable.
So much for the criticisms of the financial critic of the Conservative party. At that, I have probably spent too much time upon it.
The exceptional oratory of the member for Vancouver-Burrard (Mr. McGeer) holds every person, and it is not until one shakes himself free of the thrall of that oratory that some questions and doubts begin to arise in one's mind. I thoroughly enjoyed his speech the other day, but to-day I want to ask some questions and express some doubts.
The hon. member spoke of the national debt probably growing to $20,000 million and asserted that it would be unpayable and that the interest charges would crush us. The figure of $20,000 million is his guess, his estimate only. I consider the assumption a gratuitous one. Our experience in these very heavy war years hardly warrants the statement of such a figure. True, we are piling up debt, although we pay for a big share of our expenses as we go. Our total debt rose between 1939 and 1943 from $4,700 million to $11,300 million. It seems to me that recent events on the fighting fronts justify the belief that the end is not too far away, although certainly we have no justification for softening in our attitude towards the war. The figures I have mentioned, however, show that we have a long way to go to reach $20,000 million even if we keep up the rate of debt increase of the last few years. But the burden of debt is the interest that has to be paid. The total 1943 costs in interest were $304 million. The lower level of 1939 resulted in a cost of $169 million. In the interval-and indeed for some period before 1939-we were reducing the rate of interest. The rate was reduced between 1939 and 1943 from 3-61 per cent to 2-69 per cent. In other words, interest has not risen in proportion to the total of the principal of the debt.
We have no reason for fearing that such a load cannot be carried by the Canadian people. It is all wrong to try to make people frightened about their future. As a matter of
The Budget-Mr. May bank

fact, with practically all of this interest payable within Canada, the income of Canadians themselves is increased to the extent of $304 million. All this yields taxes. The actual interest load is not as great as at first sight appears.
The hon. member read a quotation from the report of the governor of the Bank of Canada, but he read only one sentence. I wish to read the whole paragraph, because it strongly supports what I have already said. That paragraph reads as follows:
In making these comments I do not wish to suggest that public debt could be increased at the present rate for an indefinite period without placing intolerable strain on our economy.
That is as far as the hon. gentleman read. Now I will read the remainder of the paragraph:
I do feel, however, that the war debt, and the increases which will inevitably take place for a time after the war ends, can be handled without serious embarrassment, The key to this problem, as to many others, lies chiefly in the maintenance of a high level of employment and income.
In saying that we probably would have $20,000 million of debt, the hon. member directed our attention to the fact that, immediately following the last war, expenditures were equally as high as or higher than they had been during the war years. It will help us to keep cool by recalling that expenditures right after the last war were expenditures made under conditions of a very serious inflation. The whole price structure was high, and naturally this was reflected in government expenses. High interest rates for war loans had the same effect. All this is different now, and there are many other different favourable factors.
The two things we have to guard against to protect our future are runaway inflation and a decrease in income through unemployment. Government policies have certainly been effective thus far with respect to inflation, and-this is something about which we cannot afford to take a chance. Our next duty is to make sure of the maintenance of a high income after the war. The Canadian people have no need to be timorous about this. With the great backlog of purchasing desire, with the millions of things to be done in this country, with the needs of the world outside this country, and with the strength of the postwar policies of this government, we can view the future of our country not merely with hope but with confidence.
I am not at the moment seeking to rule out the ideas of the hon. member for Vancouver-Burrard. I could not do so until these ideas

are -clarified. I approach them, however, with caution particularly induced when I notice the use he makes of quotations. For example, the hon. member quoted a splendid and stirring passage from a speech of Field Marshal Jan Christian Smuts. I do not suppose that there is a man or woman in Canada who will disagree with what Smuts says are the needs of our situation with respect to social security and other matters. The field marshal is speaking upon an economic matter and the hon. member seems to approve the field marshal. Well, I find that his government, the government of South Africa, is financing along the same so-called orthodox lines as the Canadian government is financing, and as the British government is financing, and as most governments of the world are financing. The hon. gentleman must be a little extreme in his denunciation of the policy, in view of the fact that Smuts, of whom he approves does himself in turn approve the present day system.
But in this respect we can come much closer home. Another stirring, eloquent, inspiring passage has been read by the hon. member from an oft-quoted book of the present Prime Minister (Mr. Mackenzie King). This is followed by a quotation from a speech which the Prime Minister made. Its most significant lines are as follows:
Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.
The hon. member considers that to be sound economic doctrine. So do I. He holds the Prime Minister to be one who is deeply and keenly interested in the welfare of humanity; so do I. I think he further exhibits the Prime Minister as one who knows how, when opportunity offers, to effectuate his desires to improve the lot of mankind; so do I. Now this economic mind, the mind of the Prime Minister of Canada to which the hon. member for Vancouver-Burrard pays tribute, is in favour of the present fiscal policy of Canada. The fiscal policy of Canada is his own policy. The taxation plans of this government and the victory loan plans of this government are his. This also was the case before the war.
I have difficulty then in following the hon. member when, in one and the same breath, he extols the Prime Minister with respect to his economic thinking as well as his emotional reactions, and denounces the Prime Minister's chief economic instrument as something which is utterly without health and no good at all. An all-out attack I can understand; and I can

The Budget-Mr. Maybank
understand full-throated complete approval; but kicking and kissing at the same time has never been comprehensible to me.
Not merely is there a need of clearing up such ideas as I have referred to, but I think the hon. member and those who believe with him. have to go farther and. have to clarify a number of points before we can give a proper examination to the supposed new monetary policy. I have listened to and enjoyed a great many of the hon. member's speeches, and yet I do not exactly know what he would have us do. Generally when he finishes a speech I find something in it which is suggestive of his plan, but I have never heard a complete and a precise and a concise disclosure by him. I note his condemnation of what he calls "unpayable debt," and I note that he flays the very idea of paying interest. But negation is not enough. Until he can get down to the point of writing his own idea of a budget speech, indicating what should be done respecting war expenditures and other expenditures, and all other details in connection with government financing, I shall find it impossible to follow him because I cannot tell where he will lead.
The nearest thing to any concrete proposal upon the subject of monetary reform which I have heard was the proposal of the hon. member for Parry Sound (Mr. Slaght). I do not know whether it can be justly termed the joint idea of these two hon. members, though it seemed to me that one did support the other. At any rate, to me that proposition did not look very good. It was, you will remember, a proposal that we print a billion dollars' worth of money-some such figure-or, if not print it, otherwise create it; it does not matter whether it be done with a fountain pen or with a printing press-and use this billion dollars for paying our expenses. I say it need not have been a billion; it could be more or it could be less.
All will admit, I think, that such a plan is not new. Various countries have tried it. It must be admitted, too, that it is not without benefit to some. To me it looks like a scheme which will enhance prices, and enhance them very greatly. This would benefit somebody. It would be a benefit to a man who has something to sell; that is, it would benefit him until he had to replace his goods. It would probably benefit large mine-owners; at any rate the wealthier. But for all people below the rank of the very wealthy it would mean disaster. A sharp upswing of prices would simply result in stark, unrelieved poverty for all except the very wealthy.
If I am wrong in claiming that such a policy means higher and higher prices, I
submit it is up to the advocates to show that I am wrong. This is another thing which has not yet been done.
I know it may be argued that by our controls we keep prices down at the present time and could continue to do so under such a proposed plan. But we do so, now, partly because we keep away from creating money in the manner of that proposal. Moreover, it is only because of the patriotism of our people for the prosecution of the war that controls work at all. If we should have to put up permanently with all the restrictions of to-day, life would not be worth living. There is no hope for all this fascist control in peace-time Canadian life.
Again I repeat that whatever the new budgetary policy is, it should be set forth clearly and, if possible, concisely. There is no hope of frank discussion until that is done. But in the meantime let us take stock calmly of our position and we shall know that we have no cause for fear. The Canadian people have met many complicated and difficult situations in their history, and they have not been worsted by any of them. All our history teaches us that we have a great destiny. We have evoked the admiration of every country in the world by the manner in which we have performed our tasks over the last five years. We have only to go away from home for a little while to find how good a place it is. Let us stop crying these horrendous tales of fear into the ears of people, making them uncertain about the future of the country. If there is a new money system which will make our life easier from now on, let us see it and let us learn all about it. No person is afraid to look. But there is no advantage in merely criticizing the system under which we have done the great deeds which we have done, and crying that it is all outmoded and outworn. In other words, there never was any advantage to any person in merely crying "stinking fish" on his own doorstep.


Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, there are two occasions during the session of parliament on which the private member has a little more latitude than usual. The debate on the budget is one of them. I am going to make a few remarks with respect to the budget, and I hope to keep within the ambit of the subject and not transgress the rules.
First, may I express appreciation of the difficult task which always faces the Minister of Finance (Mr. Usley) when he is preparing a war budget such as this. This is his sixth, and it is one of the largest budgets we have had. I believe however that the Minister of
The Budget-Mr. Perley

Finance is most sincere, and I trust that every other member of this house is equally sincere, in his desire to devise ways and means of raising the funds that are necessary to carry the war to a successful conclusion. And after that has been done we must also find the ways and means necessary for the reconstruction that is to take place in the post-war period so that we may have something worth while to which our gallant fighting men can return. We must win this war, and there is no question about it that we are winning it. I am sure every member was pleased to listen <jn June 29 to the speech delivered in this house by the Prime Minister of New Zealand, who made the definite statement that the war is in process of being won. He went further and referred to the gallant part our Canadian men and women have played in the different theatres of the war, and was gracious enough to express his appreciation of the part the Canadian people have played and will continue to play in supplying reinforcements for our men, munitions, food, and so on.
This budget will furnish those provisions. That is the purpose of it, and the government will no doubt find the necessary funds. I think that we are all agreed that any sacrifice that we on the home front can make, or which we have been called upon to make, is trifling in comparison with the sacrifices that our gallant men and women have been making on the fighting front. There are some outstanding features of this budget. First of all, the overall cash requirements will be $6 billion That is more than ever before by $200 million. Secondly, there are the borrowing requirements which are set out by the minister amounting to $3,200 million. That is $320 million more than last year's, and I have no doubt that in the borrowing process the minister will find the Canadian people as keen as they have been on previous occasions, and will have no difficulty in respect of the next loan. I have no doubt the next loan will go over the top. The compulsory savings feature has been eliminated. That represents $110 million, according to the minister's statement. It will mean, I believe, that the people will have that much more money to spend, and I think it is important that if they spend it they should buy bonds. If they do so, everything will be satisfactory. But if they use the money to buy other things, it may bring about the inflation of which the minister is so fearful, and he may have a little difficulty in that regard.
There is more for mutual aid by several millions. I am heartily in agreement with that, and I think that every member of the house endorses it. We all heard what the Prime Minister of New Zealand said; we

know what is taking place in connection with mutual aid supplies to Greece, and others of the allied countries, and it is all splendid. I am sure that every member of the house will be willing to support that feature of the budget.
There is an amount of $260 million for family allowances. I am going to wait until the resolution is before the house before discussing the question, but I might say in passing that I could produce letters which I have received from people not only in my own constituency but in other places in western Canada. However, I will leave that until we get to the resolution.
There is little change in the income tax; where there is, it will help those in the lower brackets, and we all agree to that. Some members, one to my left especially, have based their whole speeches on the fact that farm implements are to be put on the free list. I am free to say that this may help, and it should be a help with the experience that we have had with our neighbours to the south during the war itself. I support it as far as it goes, but how far will it go? I may say to the minister that unless the import quota restriction on farm equipment is removed it will be of little value. However, there are some features of this m-atter to which I would call the attention of the house. First there is the ten per cent war exchange tax which is to be removed. It is a war measure, and that is all right. Then there is the seven per cent duty which is to be removed, and that is an act of parliament that could be undertaken at any time. Both these are levies at the border where the goods come in on the basis of the retail price, which is nine per cent over the wholesale price, and that should be taken into consideration.
I would point out that the total farm business in implements in Canada, both imports and domestic, shows that tractors form sixty per cent, while the total imports from the United States of implements show fifty-two per cent as tractors, coming in free of duty now. Bear that in mind. The total business, domestic and import, is sixty ' per cent tractors, and fifty-two per cent of the imports come in free now. Take the other forty-eight per cent of the imports of implements into Canada and you find that some of them bear a seven per cent duty, some three per cent, some nothing at all, and the average is 314 per cent duty. What will the farmer pay? Anyone can get the figures from the bureau of statistics. The farmer spends on the purchase of implements only three and three-fifth cents out of every 100 cents he pays out in farm expenses. How much will he pay on

The Budget-Mr. Perley
the forty-eight per cent that comes in from the United States when the duty is three and a half per cent? Let me reduce this matter into the language of the farmer. Take wheat. The farmer averages net $1 a bushel. There is a ceiling of 11.25, but he averages now practically $1.


An hon. MEMBER:: There is no ceiling at all.


Ernest Edward Perley: Yes, $125; that is the set price. Now, on one bushel of wheat how much will the farmer save? The duty being three and a half per cent, if out of every $1 of his expenses the farmer spends 3-6 cents on implements, on a bushel of wheat, that is a dollar's Worth of wheat, the saving, will be one-eighth of a cent. Therefore, if a farmer spent the returns of one thousand bushels of Wheat on implements coming into Canada, what would he save? Under this budget he would save exactly $1.25. Hon. members can figure it out for themselves.
In a few respects I do not think this budget gives enough consideration to the chief industry of. agriculture. True, as the hon. member for Dufferin-Simcoe (Mr. Rowe) said, the three primary industries of agriculture, mining and forestry provide the major portion of our national income. But, Mr. Speaker, I would say that agriculture is the chief one. When it is considered that one-third of our population are either on the farms or are interested in farming, and a review is made of the portion of the national income that they have received over many years, it will be found that they never received more than fifteen per cent, and in many years much less. The reason I am speaking as I am to-day is that no one can properly represent a constituency in Saskatchewan or in western Canada who does not centre his attention on agriculture. It is our chief industry. Relatively speaking a very small percentage of the funds which are to be raised by taxation under this budget will go to agriculture. We are not complaining about the amount required to win the war. Therefore, in many respects I support the amendment proposed by the hon. member for Dufferin-Simcoe. So far as the amendment affects the farmers I think it is very good.
I agree with what the hon. member for Souris (Mr. Ross) said, namely, that the farmer's income should be averaged over 6ix years. Last year the minister said he was agreeable to three. I remember the discussion that took place. On that occasion I suggested it should be longer. I am quite frank in saying that I would go farther than
either the amendment or anything that has been done by the government. I would exempt the farmers from taxation altogether.


Some hon. MEMBERS:: Oh, oh.


Ernest Edward Perley: Hon. members may laugh, but I shall tell them why I make that statement. I say that there is no industry in Canada that has had more years of operation that show a loss. There is no industry in Canada that is operated under more hazardous and difficult conditions than farming. If hon. members will review the income statement they will see that in the year 1942 only 1,488 farmers paid a tax, and it was the paltry sum of $100 apiece. I say, why bother with them at all? Give them some encouragement.
May I quote what I said last year, and which' I wish to repeat to-day? Speaking on the budget on March 15 of last year I said, as appears at page 1239 of Hansard-.
I am going to offer a suggestion with respect to these farm incomes, because the tax collected really does not make it worth while 'bothering 750,000 farmers. I am going .to suggest that the farmer, especially the farmer of western Canada, be allowed to charge as part of his operating cost a fair wage paid to his wife and daughters and young sons who help him on the farm. I am going to ask that every farmer in Canada be given exemption from the payment of income tax unless he can show $2,000 of a net income.
That is what I suggested last year. The proposed amendment of this year goes pretty nearly that far, but not far enough. I would go farther, and as I said in my final suggestion last year, I would exempt the farmer.
I now come to the important question of floor prices. The Minister of Agriculture (Mr. Gardiner) is not in his seat. He sent me a note saying that it was impossible for him to be here. I appreciate that. On Friday last I asked him a question with respect to the introduction of the bill providing for floor prices. He said that it was being prepared and would come down in due course. I say we should have had it when it was first suggested that it would be brought in. We should have had it at least two months ago, and we should be considering it along with the budget. When we get it I hope it will contain a price that is at least parity. I do not know whether hon. members know what parity means, the word has been used so often. We now have a ceiling price on farm products that is out of all reason. So far as wheat, oats and barley are concerned it should be a price comparable to that which is received net by our United States cousins; it should be comparable to that which the

The Budget-Mr. Perley

The third paragraph is:
That no provision 'has been made to encourage greater war-time production by exempting overtime pay from income tax.
I believe there is nothing this government could do which would have a greater effect in stimulating the production of material and equipment for vrar purposes.
The next paragraph states:
That sufficient provision has not been made for the elimination of the inequities presently existing with respect to agricultural taxation.
I believe I have endeavoured to make myself clear on this point. Certainly I agree with that paragraph.
With respect to the simplification of the income tax form, I know that many people are confused beyond all measure. I myself have been confused. AVhen making out my form I had to go down to the Ottawa office, and, I am frank to say, the officials down .there did not know as much about it as did those out in Regina, where I finally got it *straightened out.
I shall not take more time of the house. It has been my purpose only to bring a few matters to the attention of hon. members. I could have said much with respect to soldier settlers' debt, but the house knows where I stand on that point, because I advocated two years ago that the minister would have been .away ahead if he had written it off.
I shall not discuss banking, because that *matter has been discussed to some extent in committee and in due course will be the subject of discussion in the house. I shall reserve for the committee stage anything further I have to say. I hope then to be able to discuss in greater detail one or two points to which on this occasion I have made little more than a passing reference.


Mr. A. J. LAPOINTE (Matapedia-Matane):: 
Mr. D. G. ROSS (St. Paul's):: Mr. Speaker, I would first congratulate the hon. member for Matapedia-Matane (Mr. Lapointe) upon the fine sentiments he has expressed, and his just pride in the members of the armed forces
IMr. A. J. Lapointe]
from his constituency who are serving overseas. I have some knowledge of the part of the country he represents, and it deserves all that he says of it. It is a beautiful country. Before saying much about the budget I wish to take exception to some remarks of the hon. member for Vancouver-Burrard (Mr. McGeer). On several occasions he has said in this chamber that conditions between 1930 and 1935 were the responsibility of the government of the day. I would remind him and the house that if any government were responsible for those conditions it was the Liberal administration which held office between 1926 and 1930. They laid no plans to withstand the results of world-wide depression, stimulated! by intense nationalism and accompanied by falling prices. As a matter of fact they did not even know in the early part of 1930 that there was any unemployment. That same year a Conservative government took office and found that no preparations had been made by its predecessor to meet the terrible situation which then confronted the country. Let me point out that Mr. Bickerton, speaking before the banking and commerce committee, said that Mr. Bennett provided the mechanism Which helped to. take the country out of the chaos it was in at that time. Mr. Bennett and his government were responsible for the establishment of the Bank of Canada; and Mr. Bickerton of the Federated Association of Agriculture gave great credit to that government, remarking that he did not know how this country would function at the present time had it not been for what Mr. Bennett's government did.
Our first responsibility to-day is to win the war, not only against the nazis but against the Japanese. We do not know how long it will take to do that; the time may be short or it may be long. One thing is certain, that all the money which will be required to finish the job will be willingly furnished by the people of this country. Our armed forces will not be let down, if Canadians have anything to do with it, through lack either of supplies or of reinforcements for overseas. As far as our own party and I myself are concerned we shall do our best in spite of everything to see to it that these supplies and reinforcements get overseas to our troops.
There is to-day great fear on the part of our people. They believe that the government is doing no more planning for the future than it did in the past. No wonder there is distrust and unrest. That is what is troubling our armed forces; they do not know what will happen to them when they come back.

The Budget-Mr. Ross (St. Paul's)
The government has always been so full of indecision that there is much distrust in the minds of the people.
The speech from the throne is mere windowdressing; it contains all or nearly all the accumulation of progressive legislation which should have been introduced during the past nine years. The government displays the same old policy of drift and the same reluctance to do anything for fear a vote or two may be lost. So far as my observation goes the government has never done anything unless it has been forced to do so by the official opposition. For us this is a matter of pride. Evidence of its truth was furnished by a former Minister of Public Works, the hon. member for Richelieu-Yercheres (Mr. Cardin). He has not changed his mind, I believe, on that point.
One could not help noting that many of the policies adopted by our party at the Winnipeg convention have been included in the speech from the throne. Provision for some of them will be found in the budget, and I congratulate the ministry upon that fact; it shows good judgment. It requires some outside force to give leadership to a government whose policies ever since 1919 have never indicated any element of leadership. Their pre-election policies appear in the speech from the throne and -now-in the budget. Throughout its wartime administration the government has had one eye on the war and the other eye on the ballot box. It has shown the same old reluctance to deal positively with matters of importance unless forced to do so, the same unwillingness to accept positive, constructive criticism from the opposition or from the public. Now that it is in need of a bait for the election, there are dangled before the people many illusory lures in the hope that they will attract some votes on this political fishing expedition. Also, in the dying days of this government, in this last and most decisive year of the war-or so the minister has told us, and we believe it-they right-about-face on the policy against inflation. This is the year of the largest expenditure in Canadian history, the year when there has been a greater demand for workers than was ever known before. The government have caused all these welts and bruises to the people of Canada by raising the bogey of inflation and committing many other mistakes. They have created dissension by their determination to fight a Liberal war; and, because the welts and bruises have not been laid on impartially, but have always been the result of political expediency, the public is resentful.
Take the enforcement of national selective service. If it had been enforced impartially on all, the people would have stood for it
willingly; but when it is imposed rigidly on the willing horse in some parts, and otherwise on the unwilling, the willing horse of course resents the discrimination. However, in spite of all that, the people of this country have responded magnificently. Our voluntary enlistment has been splendid, but our call-up system has been a farce. It has not been enforced impartially. When one speaks of partiality and impartiality, can anything be more partial than the singling out of certain articles of consumption such as beer, liquor and wines? Is there impartial administration there? Why were these articles singled out to be rationed by the provinces? Why was not gasoline rationed in that way? Why was not sugar or cigars or cigarettes or tobacco singled out to be rationed by the provinces? Why should rationing be under the auspices of the provinces with all the discrepancies that have taken place in the meantime and the disunitj' that has been caused in this matter? I will tell you. When all the other rationing was done under the auspices of the War Measures Act an exception was made in this case, because it was obvious on the face of it that there was too much political dynamite in it, and therefore the buck was passed to the premiers of the provinces. There were too many circular letters from prohibition advocates. The Prime Minister (Mr. Mackenzie King) was afraid to face the issue, and so he escaped responsibility by putting it on the shoulders of the provincial premiers.
Our factory workers have done an admirable job not only in the factories but outside in their spare time, and our white-collar workers have also done very well indeed. Despite hardships and trying circumstances under which they have had to carry on, they have endeavoured to keep the places open for the boys who will be coming back from overseas. Many white-collar workers in my own city have been offered jobs elsewhere at higher salaries, and their salaries have been frozen. They could go over to the government departments, however, and get an increase, but in spite of that they have stuck to their guns because they wanted to help the boys who have gone overseas. Our business men also have done a wonderful job and have given freely of their time. Our farmers, too, deserve a great deal of credit. Their production has been enormous. The people's subscriptions to the victory loan have also been admirable. As the minister pointed out to-day, our effort in this regard has been magnificent. When we consider that $1,407,500,000 vras raised in the last loan, it shows that our people will rise to any occasion for a good cause.

The Budget-Mr. Ross (St. Paul's)
Our armed forces have been magnificent. They have had to sustain hardships and tedious waiting. Many have been away for a long time, and that is something else that I have already spoken about, because I could not see why we should retain here a home army who had nowhere to go while we have had those boys over there all these years. They might have been easily relieved by some of these 70,000 men, who could have given them a chance to get back. It is a little late now, I suppose, to urge this once more. However, our troops overseas have covered Canada as well as themselves with glory. They have made a name for this country in the world, a name which will live forever; we must never forget. But all these things have been done in spite of frustration and lack of full leadership simply because the government has had one eye on the war and the other on the ballot box.
The people have responded to regimentation and regulation. With some of the budget proposals I agree and, while I do not want to go into details, I will mention, in passing, relief from the savings portion of the tax, certain relief in connection with medical expenses, relief in connection with the blind, married persons separated, allowance for fulltime housekeeper, superannuation and pension fund, payments to trade unions, relief for business to help full-time employment so that business can plan, and so on. But many of these things have been advocated before by His Majesty's loyal opposition. All through the war the opposition have advocated many of these and others as well. Take, for instance, the tax deduction for guest children. Repeatedly this government has refused to do anything in this regard, on some technicality or another, except in a few instances. Take the deduction in connection with illegitimate children, in-laws and alimony. Were these suggestions given consideration by the government? No. The public must grin and bear it because they had to be reserved as bait for the electors on the approach of an election.
Has the government policy with regard to anti-inflation been altogether sound, or has it militated against production?. Has it ground down the workers in the lower brackets below the actual decent cost of living standard in many cases? Has it not been very difficult to get any relief under these circumstances? There are many illustrations of the manner in which this policy has militated against the decent standard of living of many of our workers, more especially those who were not in essential war work or who were not in a position to do war work.

Comparisons have been given by the minister to show our taxation and the taxation in various other countries. Comparisons, of course, are odious at any time and more particularly in this case, because a comparison of taxation in other countries with taxation in Canada cannot be made unless we have the full gamut of all the taxes that are to be taken into account, both direct and indirect, provincial and municipal, and more so when we consider the cost of living in Great Britain and Australia, for example. These are compared from time to time, but you cannot make comparisons with Australia, New Zealand and Great Britain. The food may be the same or it may be different; clothing may be the same; but there is one item, more important than others as far as Canada is concerned, and that is fuel to keep Canadians warm in the winter. That has not been taken into consideration. When these cost-of-living indices are given to the people showing that this has gone up so much and the other has gone down so much, you cannot compare the cost of living in Canada with the cost of living in other countries. We have a severe winter in Canada. What family in this country can get by, even in the poorest circumstances, with less than 8100 a year for fuel to keep them warm? And there are other circumstances that must be taken into account in a cold country. There is greater expense in connection with clothing; there must be more food and different kinds of food as well as more expensive food, and then there is the question of sickness. When there is sickness in Canada it takes a person longer to get better. All these things enter into the picture. One could go on at great length enumerating different items that enter into the cost of living.
Now, leaving that for a moment, another proposal of our party which has been conceded by the government is that of relief to business in the form of allowing reserves to be built up for the post-war years. There is no difference in that. The relief is there. That is to say, businesses will have an opportunity of planning for the future so that they will not go broke in the years when business is not good. If this relief were not given and they ran into a bad time they would be forced to put hundreds and perhaps thousands of their workmen out of jobs.
A great deal has been said about compulsory savings being a nest-egg and a hedge against inflation. What effect will the abolition of the compulsory savings portion of the tax have on a family in the low income brackets in so far as post-war security is concerned? The government knows as well as I do that the small

The Budget-Mr. Ross (St. Paul's)
amount they will have saved1 up by that time will be a mere pittance and will not amount to anything. If the government wishes to do something for the low wage-earner and the people who are in poor circumstances, let them come out frankly and forget about this talk of inflation in connection with the low wage-earner. Let them come out frankly and lift up the exemption on the single man to $800 and on the married man to $1,500. After the low wage-earners have fed and clothed their families and paid their rent, the amount they will have to spend would not mean anything. As far as affecting inflation is concerned it is just the same old bogey.
The whole object of the government seems to be to keep these poor people frozen at low levels, people who are unable to make wages that are in any way comparable with those made by others on war-time jobs. If we want to be fair about this thing what we should do is put a proper floor under wages so that every person in the country would have a decent standard of living. The government have been propounding, and rightly so, their anti-inflation policy. In many respects I agree with them, but as far as the low wage-earner is concerned it seems to me that the government have built up a house of cards only to knock it down. I do not think it is necessary in this case to think so much about inflation.
The controls we have had on consumption goods have been good, although I believe they have been fairly strenuous at times. The people of Canada are quite willing to obey the law. They have a great sense of responsibility with regard to these matters, but you cannot tell the man in the low wage brackets that the few extra dollars he is going to get are going to raise blazes in this country as far as inflation is concerned.
With regard' to the compulsory savings portion of the tax, the people had no faith in the fact that it belonged to them. They had nothing to show for it. It was just considered as a tax. I think the people of Canada will supplement a portion of the compulsory savings tax andl buy victory bonds and stamps far in excess of what they did before, and they would do better than that if the exemptions were raised a little.
With regard to anti-inflation the government's policy has, in the main, been sound. Has it militated against production? I say here and now that it certainly has. There has been no leeway in the matter, and when it comes to asking a workman to work overtime in one of those war factories he says, "What is the use; the government gets it nearly all?" Why is this answer so prevalent? Well, I will tell you. He sees hundreds of
workmen idling around in factories with nothing to do. When the veterans of the last war and the great many other men who are past military age see young men in factories being, transferred from non-essenial jobs to essential jobs to get postponement and knows also that the home army is costing the country $150,000,000 a year; when he knows that in the neighbourhood anywhere up to a quarter of the employees in a factory could be utilized in other jobs, why should he work any longer or harder for very little or nothing? There is no patriotic spirit aroused, and I do not blame him. He sees there are lots of people in the factory who would have less to do if he worked longer than a certain length of time each week. Is this an anti-inflation policy, to have a quarter to one-third more employees in a factory earning high wages and more leisure time in which to spend the money? Certainly the greatest caution must be exercised in the prevention of inflation, but the method used in connection with factory workers seems to the people to defeat its own purposes.
In passing, may I say this further word? One of the reasons for the distrust and unrest among so many people in Canada is that the war expenditures committee is sitting in camera behind closed doors. The public well know that many matters which they have been investigating have very little bearing on the question of the war or of giving comfort to the enemy. I know of only two or three matters that have been dealt with by that committee, one of which was the shoe contract. How could that have anything to do with giving comfort to the enemy? Another one was the purchase of the Gimli airport. How could that have anything to do with giving comfort to the enemy? I do not know whether these contracts were right or wrong, but the point is they were investigated in secret. As a matter of fact the public have a right to know how the money has been spent, and if there is anything wrong they have a right to know that. There is no doubt that there has been waste and that it has been unavoidable, but again there have been extravagances which could have been avoided. Nobody blames anybody for justifiable and honest mistakes. They are bound to occur, but no one can say that there have not been many made. An explanation could easily have been given for many of these matters, but these in camera, behind closed doors, star-chamber sittings of the war expenditures committee have cast a veil of suspicion over the minds of the public in general.
May I now say just a word about the best possible man-power policy of the Minister of Labour (Mr. Mitchell)? The function



The Budget-Mr. Ross (St. Paul's)
of national selective service is to transfer workers to vacant jobs. On June 13 Mr. MacNamara, director of national selective service, announced that there were 202,323 job vacancies other than in logging or farming for 134,000 men and 67,323 women. Now, just think of the incongruity of the statement issued by the Dominion Bureau of Statistics when they announced that 14,095 men and women-and I might say that this is three times the number for last year-had unemployment benefits during the month of May I Not only that, but they averaged seventeen compensating, unemployed days apiece. Think of that, plus nine waiting days' time which must elapse before the benefits can be paid! This makes a total of 366,470 man and woman days not only lost to the production of the country, but paid for in unemployment insurance.
Another matter with which I wish to deal is the question of housing. Ever since I have been a member of this house I have appealed to the government in connection with conditions in my own city. I have had some success, but very little. Part 2 of the housing act has never been brought into force; that is the part dealing with low-cost housing. It is true that part 1 of the act has been in force and has been of great benefit to home owners, but it has not helped those in the low income brackets, the people for whom some provision must be made. They are the forgotten men. The .home improvement plan has done some good; to a limited extent it has improved the lot of the low wage-earner. Some old houses in the slum sections of my city have been fixed up; but this has not helped the children, for these are still slum areas, and the conditions under which these children have to live has resulted in a great increase in juvenile delinquency. Perhaps on another occasion I shall have more time to deal with this question of low-cost housing, -but another lure has been dangled in the political fish-pond by the government, which purports to intend to do something about low-cost housing. We shall have to wait and see what happens. All these years have gone by and the people of my city have had to grin and bear it. I have in my hand to-day's issue of the Globe and Mail, containing an article dealing with this matter, which reads in part as follows:
Eviction orders were refused, or stays of execution of such orders were granted, thus leaving many families in the premises they occupied

and thus, -also, tying up an indeterminate series of moves -by other families who were automatically frozen when one in the link of moves was -una-ble to provide vacancy of the premises.
Since that d-ate all of the months of May and June have -passed and July is on its way to antiquity-and the situation is becoming more
EMr, Douglas G. Ross.]
serious because of this factor, according to Miss Dorothy Dennison, director of the housing registry. People were able to take temporary refuge in summer cottages, tents and hastily erected shacks. When -fall conies, however, they have to seek -permanent quarters, and Miss Dennison estimates that there are hundreds of families in this plight.
At the present time some 1,900 families are on the Toronto housing registry. The situation is very serious. The home conditions of workers in certain sections of my own riding, as well as in other sections of the city, are very bad; they were slums before the war, and certainly they are worse now. I have brought up this matter on the floor of the house time after time; I even read one of the many telegrams I have received. I was almost ashamed to read it, to show the terrible conditions that existed in my own riding: vermin-infested; overrun with rats; families of four, five and six living in one or two rooms, not from choice but because they have no other place to go; overcrowded parts of the city still more overcrowded. Conditions were bad before the war, but with the influx of people to the city the situation has become intolerable. The only answer we have -been given is, "Why should the federal government look after Toronto?" I suppose it is on the same old basis as the famous speech made years ago by the Prime Minister, when he did not know there was any unemployment in the early part of the depression, and when he said he would not give one five cent piece to Tory Toronto. I brought the matter of the eviction of soldiers' wives and families to the attention of the Minister of National Defence (Mr. Ralston), but his answer was that he did not see what he could do about it. The mayor and board of control of my city have come to Ottawa in an attempt to get some action, and I give them great credit for what they have done. We interviewed many of the ministers, but were given t.he same old answer; Toronto was turned down.
After all, Mr. Speaker, whose responsibility is it? What brought about this situation? The people employed in plants ten or fifteen miles from the centre of Toronto had no place to live but the city. Some fifty or sixty- thousand workers in the surrounding district were overlooked and forgotten by wartime housing; no provision was made to enable them to live near their plants. It is a strange anomaly when we have the government on the one hand asking the workers to live near their plants, for the sake of efficiency, and at the same time saying that the city of Toronto must take care of them. Very little has been done in the Toronto vicinity by wartime housing. I believe some six or seven hundred houses were

The Budget-Mr. McNevin
put up near Long Branch, which is fifteen or sixteen miles from Toronto, and some others were built at Pickering, which is twenty-five miles away. Other cities, such as Hamilton and Montreal, have been treated differently; wartime housing saw to it that accommodation was provided near the factories, in order to relieve the congestion in those cities, but not so Toronto. Think of the time it takes these people to travel back and forth every day. At a rough estimate they lose upwards of two hours a day to get to and from their work. I know of cases where people have to get up around four o'clock in the morning in order to get to their work at these plants. The transportation commission has done a wonderful job in trying to take care of them, but when we have such a scarcity of gasoline why should we have to waste thousands of gallons in order to transport workers ten or fifteen miles each way every day, instead of building these houses near the factories? On July 4 the parliamentary assistant to the Minister of Munitions and Supply (Mr. Chevrier) dangled some more political bait before the electors, when he said the government had consented to build a few wartime houses in Toronto, but they are not to be for workers; they are to meet the requirements of soldiers' wives and children. Of course that is vitally necessary. I could read letters I have received from Mrs. N. Hall Humpherson, president of the Soldiers' Wives Association, in which she points out that the housing registry has received some 1,700 applications for accommodation for wives of men serving overseas. The situation as far as they are concerned is appalling, and I hope some relief will be given.
In conclusion, Mr. Speaker, in order that the record may be complete, I should like to read the amendment moved by the hon. member for Dufferin-Simcoe (Mr. Rowe). It was as follows:
(a)	that no adequate steps have been taken to simplify the forms and modernize the methods of taxation;
(b)	that no effective action lias 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 noil-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 $150,000,000 per annum, at a time when the need for men for army reinforcements, for farming and for industry is so urgent.
I am heartily in favour of all those paragraphs in the amendment. Time will not permit my saying much about them at the present time, but when the resolutions are in committee I shall have an opportunity to do so.
There is no doubt about this being primarily a pre-election budget, When it is fitted into all the rest of the jigsaw puzzle of the government's proposed legislation, it will show that the bait is being set in the political fishpond to catch the many and various classes of voters.
My chief criticism is that all this proposed legislation should and could have been enacted years ago. The government has been callous in' letting the people bear unnecessary suffering in the past, in order that it can now take the position of solicitously administering to their relief-and this just before an election. But by this time the people of Canada have had enough experience to say, "Once bitten, twice shy." They will look before, they leap. My warning is: Beware of the Grits, when they come bearing gifts.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. BRUCE McNEVIN (Victoria, Ont.):: Mr. Speaker, the budget debate is an occasion which offers a wider scope for discussion of public questions than is afforded by ordinary items in committee. I should like first to make a suggestion of an expenditure which might be considered for the post-war period and which has a bearing on the riding I represent. I suggest that assistance be granted in establishing at least the smaller type of airfields. The constituency I represent is one of our great tourist areas, a magnificent playground, but the resources of our people are not sufficient to provide landing facilities for the smaller or civilian type of aeroplane. There is ample water for landing seaplanes, but of course the seaplane is a plane that is too large for the average citizen. I believe that if assistance were given not only in this area but in other areas to establish such landing facilities, it would pay ample dividends in the years to come.

The Budget-Mr. McNevin

Coming more directly to the budget I wish to congratulate the Minister of Finance (Mr. Usley) upon the removal of the ten per cent income war tax on farm implements and upon placing these implements of production on the free list. I think it was the hon. member for Qu'Appelle (Mr. Perley) who suggested this afternoon that this item was of very little importance. Well, Mr. Speaker, I have been associated for a substantial period of my life with farm organizations, and I do not recall a single instance when representatives of these organizations were presenting their views to succeeding governments when they did not press for farm implements being put on the free list. Our farmers for more than a decade past have continually pressed to have the implements of production put on the free list and now their objective has finally been realized.
I think it was the same hon. member who *suggested that the amount involved in this item would be very small indeed. I turn to the appendix to the budget to demonstrate that all the implements put on the free list are of substantial importance. I shall refer to a few of them.
First, there are cream separators and complete parts therefor, including steel bowls. They are now free under the British preferential tariff and under the intermediate and general tariffs. Previously the intermediate and general tariffs on the goods covered by this item carried a duty of ten per cent, so that here there is a ten per cent reduction.
Then take item 409a: milking machines and attachments therefor; centrifugal machines for testing butterfat, milk or cream: complete parts of all the foregoing. These are now free under all tariffs. Previously this item carried a ten per cent duty.
I now come to the more general list of farm implements found in 409b: cultivators, harrows, seed-drills, horse-rakes, horse-hoes, scufHers, manure spreaders, garden seeders, weeders, and complete parts of all the foregoing. They are now free under all tariffs. The intermediate tariff on goods covered by this item was formerly 7i per cent. The general tariff was twenty-five per cent.
Then item 409c: ploughs, farm, field, lawn *or garden rollers: soil packers, complete parts of all the foregoing. They are now free under all tariffs. The intermediate tariff on goods covered by this item was 7\ per cent and the general tariff twenty-five per cent.
Then item 409d: mowing machines, harvesters, either self-binding or without binders, binding attachments, reapers, harvesters in combination with threshing machine separators including the motive power incorporated
IMr. McNevin.]
therein, and complete parts of all the foregoing. They are free under all tariffs. The intermediate tariff on goods covered by this item was 7^ per cent and the general tariff twenty-five per cent.
Then take the next item, 409e: spraying and dusting machines and attachments therefor used by fruit growers. These all now come in free.
Then take item 409f: hay loaders, hay tedders, potato planters, potato diggers, fodder or feed cutters, ensilage cutters, grain crushers and grain or hay grinders for farm purposes only, and many other articles. These come in free under all tariffs. This means a reduction of at least 71 per cent.
Then take item 409j: fanning mills; corn husking machines and many other items. These come in free under all tariffs whereas the duty was 71 per cent under the intermediate tariff and twenty-five per cent under the general tariff.
I shall not mention any more items. These examples are sufficient to show that the reduction which has been made in this budget amounts to a reduction on the general line of farm implements running anywhere from 71 to 10 per cent.
Just at the present time when there is such a strong demand for metal products of all kinds for war purposes, placing these implements on the free list may not be of any great immediate benefit to the farmers; but in the years to come, and particularly in the post-war years when there will be a great backlog of demand for farm machinery, and when the farmers will have money with which to buy machinery, I am sure that they will reap substantial benefit from this budget provision for which they have been striving for such a long period of years.
Another matter mentioned by the hon. member for Qu'Appelle was with regard to farmers being placed in a privileged class so far as the payment of income tax was concerned. The suggestion was that they be exempted entirely from, payment of income tax. I am a farmer like the hon. member for Qu'Appelle and personally that would be very fine for me. I do not think any administration could take any action that would do more to promote a back to the land movement than to place all agriculturists in a privileged position so far as payment of income tax is concerned. I do not know of any action that could be taken that W'ould do more to promote larger farming units. Thousands of people who had made their pile would retire _to the country, if agriculturists were exempted from income tax, and would set up a little farm to escape payment of the tax. That proposal might

The Budget-Mr. McNevin
sound well on the election platform, but I am sure that it would not be a sound provision in a budget of the Dominion of Canada.
I wish to make a few remarks upon the magnificent production of agricultural products by the farmers of Canada during this war and to compliment the Minister of Agriculture (Mr. Gardiner) upon the splendid direction and leadership he has given in promoting this remarkable production. I am sure that there have been times when the Canadian people have had misgivings regarding possible food shortages, when they feared that there might be a shortage of food, not only to ship across the seas to feed our armies abroad and the British, but even a shortage of food in Canada to meet the demands of the Canadian people at home. But from year to year we have had an increased production of food products until now everyone in this country seems to be satisfied as to the food situation. I believe that in food production we have established a record that is outstanding in the history of Canadian agriculture.
That brings me to the point of giving some thought to the post-war problems of agriculture. Such thinking and planning must not stand in the way of winning the war as decisively and quickly as possible, because that, of course, represents the major responsibility of the Canadian people.
What will some of these post-war agricultural problems be? The longer the war goes on, the more I am convinced that we are likely to face many of the very same problems faced after the last war, particularly if we fail to support and maintain the price control policy. In my opinion, finding markets for the surplus farm products which the farmer can and will want to produce will be the biggest one. I think the house will agree with me that farmers want to produce all they can. They are never so happy as when they are working at full capacity. Our farmers have surprised Hitler, Tojo, our own people and, in fact, the people of the whole world by showing how much they can produce with a war-time incentive and fair prices. The year 1943 shows the greatest production of food on record in Canada, and 1944, with favourable maturing and harvesting weather conditions, will exceed the record of 1943. This has been accomplished under the handicap of labour shortages and an insufficient supply of machinery and equipment. When we return to peace-time conditions, with the experience we have gained, with the ordinary supply of farm labour and sufficient machinery and equipment, and with fair demand and adequate prices, we can produce, I think hon. members will agree with me, double our pre-war volume of farm products. We have found out in war time how much good, nutritious food the people of this country will consume when they have a sufficiently high income to purchase it in ample supply. But what kind of incomes will our people have in, say 1948? Will our industrial activity be as high as now? Shall we exhibit the same degree of knowledge and determination to conquer unemployment as we have displayed in assisting our allies to conquer the common enemy? The problem must be attacked in that spirit.
But suppose we do have an increase of from fifteen to twenty per cent in our domestic consumption of food-allowing for the normal increase in our population, that is about the best we can hope for-there will still remain a huge surplus to be disposed of in the markets of the world. In facing this great problem let us be honest with ourselves. Even if credits are extended to peoples more unfortunate than we, to buy some of these products, if we are going to sell these surpluses in world markets we must accept the surplus goods of other countries in payment for our exports. This is a hard, indisputable fact. It is not so unpleasant if we remember that we can export our surpluses if we accept the surpluses of other countries-products which they may be able to produce more efficiently than we can- in exchange for our products. Are we ready to advocate lower rather than higher tariffs? Are we ready to agree to fewer trade barriers rather than more? Are we ready to accept and adopt the principle that world trade is a two-way highway, not a single track?
But even if we do succeed in finding an outlet for all our farmers can produce, still we must have a fair price for it before our economic problem is solved. What is satisfactory? Some farm organizations say that parity is a fair price. I prefer to speak in terms of parity of income for farmers rather than parity prices, because parity prices may not result in parity of income. Others say, whatever the law of supply and demand dictates should be the price, even though they know that farmers seem to be the only class subject to this law in its crude, unvarnished form. Too often in the past agriculturists1 have realized that the greater the supply, the less the demand, and consequently the lower the price.
This brings me to the question of bonuses' and fixed prices. Frankly I think these instruments should be retained for a considerable time to come as a protection for
The Budget-Mr. McNevin

both producer and consumer. However, in making this suggestion I am not unmindful of some difficulties which may arise.
First, you can set a price for a commodity but you cannot force the public to purchase it at that price. If the public will not buy as much as the farmers produce, you are in trouble. If the product is perishable, you have not long to wait; if not, it can be stored but the evil day is only delayed.
Then in the matter of prices, what we in Canada think is a fair price may be a high price to some other countries. In fact, if world prices were as high as ours, world production would probably be much higher, causing a curtailment of demand for our surpluses.
Let us also review past experiences with bonused or subsidized products which were exported. The experiences were not too happy. It can drive down world prices still farther, because in a buyers' market everyone tries to meet the low price and the price frequently falls. If our price is substantially higher than the world price it is an inducement for other countries to sell in our markets. The suggestion that tariff or trade barriers will set things right is not a sound one. As a solution, I suggest that these problems are worldwide and must be attacked from that point ;of view. Nations cannot longer live unto themselves alone. In Canada measures have been taken during war time which should be very helpful in the post-war period.
First and foremost of these is the price control policy so ably devised and administered by the Minister of Finance (Mr. Ilsley). This policy has won the admiration of financial leaders and critics throughout the world. It should be more appreciated and better understood by the Canadian people. So far it has beaten inflation. Given support to carry this policy through, we have overcome post-war's most formidable enemy.
We must approach the problems of reconstruction determined that unemployment must be licked. I think we have learned that the greatest single example of waste in the world is permitting human hands to be idle when food and goods which people need could be produced. We surely can agree that increasing consumption to support prices is cheaper and more effective than restricting production to support prices. This should go for industry, labour and agriculture. The bill which will soon be before the house to provide for family allowances is an example of a move to increase consumption and support production in the manner I have just indicated. We have learned much out of the experience of the
(Mr. McNevin.]
past, and if we intelligently apply that knowledge we should go forward with courage and confidence. We have found the money to do our share in winning the war; we must do likewise to win the peace. In the broader field of world affairs, particularly as applied to the war, Churchill, Chiang Kai-shek, Stalin, Roosevelt and Mackenzie King have found a common foundation upon which to unite their efforts to win this, the most titanic war in history. I am not going to suggest what should be done in other countries, but I would suggest, as far as the Canadian people are concerned, that we should maintain at the helm of our ship of state the Right Hon. W. L. Mackenzie King to meet with these world leaders and to find a common foundation upon which they can unite to win the peace as they have united to win the war.


Mr. A. R. ADAMSON (York West):: The budget this year is indicative of a tremendous gamble. The underlying principles of the entire speech are based on the possibility of an early collapse of Germany. There may be some justification in taking this gamble, and gamble it is, for this is the only excuse for the inflationary measures proposed by the government's policy. The government has entirely reversed its previous policy, and instead of endeavouring to provide a high level of employment, it has adopted the specious and entirely unacceptable policy of paternalism. Paternalism never has been and never will be a substitute for independence through individual effort. If the gamble taken is successful and the shell of fortress Europe, once broken, detonates an internal collapse, then the government will be immediately faced with the problem of rehabilitating our armed forces; for once the now overwhelming weight of allied power is concentrated against the ferine and barbaric island of Japan, her utter destruction will not take long to accomplish. Without in any way minimizing the task ahead, I wish at this time to discuss one of the major problems of the reconstruction period and one which I believe will do more than any other to preserve our present bountiful economy on a high level of employment.
I wish to speak of the mining industry and in particular of the question of mining taxation. As is generally known, we have been blessed with a larger potential area for mining development than any other country in the world. Climatically, the Canadian shield may be considered to be rigorous, but when compared with the extreme temperature of Siberia, reaching as low as ninety degrees below zero, and the other extreme of Africa, India, and South America, where the

The Budget-Mr. Adamson
rock temperatures underground may reach as high as 120 to 140 degrees Fahrenheit, it will be seen that we are indeed very fortunate. In the period of depression Canadian mines, particularly the precious metal mines, provided one of the greatest sources of permanent employment. It is said by the Wallace committee that 107,000 people were directly employed by the industry, giving employment indirectly to 1,200,000 or over one-tenth of our total population. At no time during the depression did our relief roll approach this figure, and I suggest to the house that had our mining industry been fifty per cent larger than it was, there would have been virtually no men on relief in this dominion during those years.
The mining industry is unlike all other industries. To be continuous it must be constantly replenishing itself. New mines must be found; the ground must be prepared; capital, particularly risk capital, must be encouraged and the prospector must at all times find a ready market for his services; for he holds the key which will unlock the golden treasury. Our present taxation policy has brought about the very opposite of this, until to-day we find our mining industry in the following shocking condition. Of Canada's 1942 metal production, fifty-six per cent was derived from mineral areas discovered prior to 1910, over a third of a century ago; twenty-eight per cent was derived from the mineral areas discovered between 1910 and 1920; that is, eighty-four per cent from areas discovered over a quarter of a century ago; eleven per cent was derived from mineral areas discovered between 1920 and 1930, and only five per cent came from mineral areas discovered since 1930. This is one of the most serious indictments against the federal government.
Mining, Mr. Speaker, is essentially a risk business. When success is found the rewards are great, but the ratio of success to failure will, I think, surprise hon. members of this house. It is a fact that less than one per cent of the companies incorporated for the purpose of metal mine development during the thirty-five year period from 1907 to 1941 inclusive could be classified as having attained economic success. The average actual taxpaying or profitable productive life of a precious metals mine in the central provinces is indicated to be less than eight years. Furthermore, during the thirty-five year period from 1907 to 1941 inclusive only one-third of the productive metal mines in Ontario had reached the stage of taxable profits recorded earnings, which enabled them to return invested capital to their shareholders. It therefore follows that the remaining two-thirds of these mines were actually taxed on capital.
As an example of the amount of capital required to develop a mine, it is authoritatively stated that the Hudson Bay Mining company at Flin Flon, Manitoba, required an expenditure of $30 million before any return was made to the shareholders. The Noranda mine-I think the minister will support me in this because he has made this very statement himself-required $25 million to enable it to produce and refine the metals of copper and gold. Furthermore, the average straight gold mines required from $2 million to $5 million to bring them into profitable production and to begin to return capital invested. These are very large sums and they must be considered as being risk capital.
This is one of the most valuable of all types of capital because it directly develops a primary industry of the nation. It is easily discouraged, and because of the hazardous natural and physical obstacles which it has to surmount, the addition of tax burdens will rapidly kill it at its source.
One of the fundamental errors made by the government is the method of assessing mine profits. In this connection I should like to quote from the brief on mining taxation by the Ontario and Quebec governments, submitted jointly by the Canadian Institute of Mining and Metallurgy in February of this year. I quote two paragraphs:
(a)	Taxing authorities do not appreciate sufficiently the fundamental difference betw'een mining and other industries.
(b)	Insufficient provision is made in the allowance for depletion to ensure return of invested capital. Anyone investing in mines recognizes that he has no profit until his capital is returned. The government should likewise recognize this fact. Taxes on real profits can begin only after provision has been made for the return of invested capital.
Before 1934, depletion allowance for gold mines was fifty per cent of the net earnings on both mine profits and dividends. Base metal mines were allowed depletion of twenty-five per cent. In 1934, depletion allowance for all mines was set at 334- per cent and on dividends paid to Canadians was reduced to a minimum rate of twenty per cent. These rates are still in effect, and I should like to quote again from the brief on taxation:
This unexplainable reduction in depletion allowance has been one of the most serious factors contributing to the decline in prospecting and new mine development. The federal tax is applicable to income and not to capital return. The present 33J per cent depletion allowance is presumed to be the proportion of annual earnings earmarked for this return; but when actual distribution of this capital is made in the form of dividends the federal taxing authorities rule that only twenty per cent of each capital shall be tax free. Surely this is at least illogical. It should be noted that the
The Budget-Mr. Adamson

increased revenue derived by the government through this reduction in depletion allowance was not for war purposes. The change became effective five years prior to the outbreak of the present war.
Analysis of the application of the present depletion allowance of 33J per cent of company earnings, and twenty per cent for dividend, clearly demonstrates that, while the intention may have been to make provision for 33J per cent of earnings as tax-free capital return, the actual return to the shareholders falls far short of that proportion.
I have two short tables which I think would be interesting to members of the house and I shall read the first and second. I wish to show how this works out in actual practice. The tables are as follows:
Assume operating profits of a gold
mine are	 $300
Deduct depletion of 331 per cent.... 100
Taxable profit is, therefore	 $200
Dominion tax at 40 per cent	 80
Total income remaining	 $120
Add depletion allowance	 100
Total available to shareholders.... $220 Depletion allowed shareholders at
twenty per cent	 44
Actual per cent of earnings allowed shareholders as depletion 44

= 14-6 per cent
If the government will agree to the fifty per cent depletion allowance which has been advocated by both the Ontario and Quebec governments in their submissions we shall
have this:
Earnings before taxes	 $300
Depletion at 50 per cent	 150
Taxable profit	 $150
Dominion tax at 40 per cent	 60
Net profit after taxes	 $ 90
Add depletion allowed	 150
Amount available for distribution.. $240
Shareholder's depletion at 50 per cent. 120
Shareholder gets as a return on capital free of income tax 120

 = 40 per cent
It is generally agreed that a gold mining stock should pay ten per cent or sell at ten times the dividend paid. If this be true, let us suppose a mining company pays SI a year in dividends, and that its stock sells for ten times $1 or $10.
Under the allowances of 33J per cent and 20 per cent it will take a shareholder 1009i4-6, or nearly seventy years to get his capital back free of tax.
Under the proposed fifty per cent to company and shareholder alike, it would take the same company 100%o, or twenty-five years to do the same thing.

In the tax brief that I have quoted previously, it is shown that, taking all gold mining companies that have paid the so-called profits tax in Ontario, the average taxpaying life of such companies is about eight years.
The experience of our mining history has shown that to be true. Under such circumstances, asking that the period be not over twenty-five years, when the average chance is limited to eight years, cannot surely be considered as unreasonable. By the same token, seventy years must be unreasonable.
As a further concrete example of what mine taxes are doing I wish to quote three specific instances of companies. The first is Noranda Mines, the great copper-gold operation in
Quebec, and it is as follows:
1932	1941
Total tax cost per ton of ore
hoisted	 $0.60	$2.29
Total tax cost per cent of
annual sales value	
6-1%	25-3%Total tax cost per cent of estimated assessable profits	24-0%	60-0%
Per cent of total taxes accruing
to dominion	 03-2%	89-9%
That is the factual situation with regard to Noranda. I should like now to tell briefly the story with regard to the major asbestos mine of Quebec. The taxation of asbestos mines in the province of Quebec shows similar main effects on operations as those for gold and
base-metal mines as follows:	1932	1941Total tax cost per ton milled..	$0.14	$0.54Total tax cost per ton fibre shipped 	1.17	7.21Total tax cost per cent of dividends (1937) 	46-4%	64-6%Total tax cost per cent production value 	4-9%	16-4%Total tax cost per cent assessable profits (1936) 	29-7%	53-6%Per cent total taxes accruing to dominion (1936) 	52-6%	82-6%
If we take the profits of a straight gold mine we find this picture. The McIntyre Porcupine operation, which is a successful operation in every way, paid the following taxes during the last fiscal year. The total taxes were $1,214,437, representing an amount of $1,029 for every man employed, or $6.42 for every ounce of gold recovered, or $1.52 for every share of stock outstanding. In addition there are the municipal taxes and the taxes paid by individual shareholders. The over-all picture in Ontario from 1915 to 1941 is as follows: Dominion taxes increased from $130,000 to $11,324,000. The total tax per ton of ore milled increased from 24 cents to $1.15. The cost per ounce of gold increased from 56 cents to $4.51. The total tax on operations of the Ontario gold mining indus-

The Budget-Mr. Adamson
try, plus estimated dominion income tax on all dividends, increased from 9-4 per cent in 1917 to 48-5 per cent in 1941; or, expressed in another way, it increased to 48J cents for every dollar of dividends, or 52-2 per cent on established gold mines not subject to section 89 of the income tax act. It is estimated that the taxation at present is approximately 60 per cent of the total returns made to the shareholders in Ontario mines. This compares with 18-5 per cent in 1928 which unfortunately was the last year of intensive mining development.
The situation in Quebec is possibly more serious because of the generally lower grade mines in that province. No province in this dominion has a deeper interest in this question of low grade ores than Quebec. Of that province's twenty-four gold producing mines no less than thirteen have a grade of S5 a ton or less. These thirteen produce sixty per cent of Quebec's gold. To-day $5 a ton is considered pretty close to the line; with numerous mines in Canada the costs are well above this figure. It is only by dint of the fact that Quebec's ore bodies are large and lend themselves to large scale mining, and because of good management and the helpful interest which the province of Quebec takes in its mines, that these low grade propositions are able to run at all. The people of Quebec are closely watching this government to see whether it follows a policy which encourages mining endeavour, or pursues 'a policy of discouragement. I say this because the people of Quebec have utilized the disclosures of gold and other mining resources in their northwestern areas as the foundation of a very important plan of agricultural settlement. The frontier farms upon which numerous people work skilfully and prosperously lose all the market outlets for their labour when the gold mines fail. Hence the very deep concern when the operation of any Quebec gold mine appears to be endangered by shortage of labour. Fortunately for Quebec, no important Quebec gold mine has had to close down by reason of labour shortage, although in the rest of Canada many gold mines have had to quit completely and leave their communities in a very difficult state, in some places on the edge of bankruptcy. I mention Quebec because, as every one in the mining business knows, its mines, while very important, are often on the low grade side. Taxation of a character which cripples the use of low grade ores and which checks the enterprise of mine-makers is of very special interest to the province of Quebec.
Of the forty pure gold mines operating in Ontario-those that rely solely upon goldonly five have a grade of $5 a ton or less. I do not know whether this means that Ontario is more blessed with higher grade gold mines than the other provinces of Canada. Probably it means that conditions in Ontario have not been such as to encourage the development of low grade propositions. Undoubtedly Ontario would have more such mines if the taxation set-up was more favourable to people taking chances on mines in the low grade category.
In order to make my point clear as to the value of low grade ore-


Humphrey Mitchell: If I may ask my hon. friend a question, which does he think is most important, nickel or gold, in the prosecution of the war?


Agar Rodney Adamson: I am coming to that, if the minister will contain himself. If he had listened to the beginning of my speech his question would have been answered. Perhaps he will read it to-morrow in Hansard.
In order to make my point clear about the value of low grade ore some brief discussion of the way the ore bearing solutions were injected might overcome some misconception which I believe to be common. This is a dangerous subject to tackle, because it is difficult to generalize and the science of geology is vast and complicated. However, with your indulgence, Mr. Speaker, let the house imagine a drum of boiling white paraffin. Now into the bottom of this drum is injected, under great pressure, a number of cupfuls of boiling red paraffin. The drum is then allowed to cool. When the wax has solidified, if we cut into it we shall possibly find the red paraffin in a pillar-shaped or lenticular-shaped mass, depending on the method of injection. However, we will find it not in one even mass but mixed with the white paraffin, and while the centre of the mass may still be quite red in colour it will soon become pink; then only slightly coloured as we proceed from the centre of the mass until there is no trace of colour whatsoever.
This is something of the same way the ore bearing solutions were absorbed into the native pre-Cambrian rock of the Canadian shield. The solutions rich in the centre soon were dissolved in the country rock into which they were forced by volcanic action. Of course it was not as simple as this; many different volcanic eruptions took place and great earthquakes subsequently caused ground movement, breaking up the original ore mass and moving parts of it great distances from the main body. However, the principle of the ore bearing solutions flowing into, and being absorbed and diluted by the country rock,
The Budget-Mr. Adamson

just as the red paraffin flowed into the white, holds good. So that as we get variation in colour of the paraffin we get the variation in value of the resultant mass of rock which we now find in situ. The problem of the miner is to get every pound of the rich solution just as it would be to get every cupful of the red paraffin vrax, assuming it to have great value. The miner would fail to do this if he merely took out the rich centre section of the ore body, just as he would fail if he only took the bright red paraffin which had not become diluted by the white.
This rather fanciful allegory has considerable importance and is one of the fundamental conditions of mining which is not understood by the tax gatherer; for just as the greater quantity of the red paraffin wdll be found in dilute solution with the white, so is the vast majority of the original metal bearing deposit in dilute solution in the native rock. Estimates vary, but for every ton of $10 ore in place in the majority of our precious metal mines, there will be many tons of $5 ore and many, many more tons of $4 and $3 ore.
An empirical theory of ore valuations in a simple arithmetical progression has been suggested, and while this does not of course work exactly in any one mine, or cannot be applied to all mines, it approximates conditions in several of our major gold producers. The theory is that for every ton of $10 ore there are two tons of $9 ore, four tons of $8 ore and sixteen tons of $7 ore and so on. Carrying the progression down to $3 we get the following results:
Value
1	ton at $10	
$ 102	"	"	9	
184	"	"	8	
328	"	7	
5616	"	"	G	
9632	"	"	5	
16064	"	"	4	
256128	"	"	3	
384255 "	$912
It will be seen that an ore body of this kind -always assuming that we take out all the rock to $3, which is approximately the minimum that any mine to-day can take out- will contain 255 tons of ore each containing more than $3 worth of metal and it will have a total value of $912. The average value per ton of such a body will be only $3.58. If we discard all rock containing $5 or less in metal, the value of the remainder will be $5.90 per ton. Thus, as our costs of mining increase from $3 to $5, we find that we lose $640 or 70 per cent of the dollar value of the whole ore body. It will be seen, therefore, how tremendously destructive taxation is which increases the cost of ore milled, and when we

see that at Noranda the total tax per ton of ore hoisted has increased from sixty cents in 1932 to $2.29 in 1941, some idea of this tremendous destruction of ore may be gathered.
An ore body which has once been mined and has had the rich centre core removed, can never be worked again, because the low grade remaining in the side walls will not pay for extraction. This is of fundamental importance. The process is known as high-grading the mine and it is as harmful to the people of Canada as is high-grading the mine by individuals, because it definitely steals from the people of the country one of their assets. It is tragic to think that the government of the people tolerates this criminal practice.
Lest anybody think our supplies of nickel are inexhaustible I should like to quote from the report of its president, Mr. E. C. Stanley. This is what he said:
Deliveries of nickel in all forms derived from our own mine production amounted in 1943 to
265.000.	009 pounds, representing an increase of
55.000.	000 pounds over 1939. In order to provide this enlarged supply, the tonnage of our ore mined was forced from 7,273,000 tons in 1939 to 12,105,000 tons in 1943.
This means that Canada's largest mining organization has suffered a very considerable decline in the grade of its ore. The recovered content in 1939 was thirty pounds per ton. By 1943 it had dropped to twenty-two pounds per ton. The margin is getting thin. It was necessary to increase the tonnage created by sixty-five per cent to gain a production of nickel only twenty-five per cent greater. The high grade deposits of the Sudbury district are fading. This is the greatest nickel camp in the world and the reason for Canada producing eighty-five per cent of the world's nickel. The world has many low grade nickel ore deposits;-they are to be found in numerous countries. If the high grade nickel ores of Canada are ever exhausted, then all our boasted supremacy in nickel fades away.
It is a serious situation for Canada, or could be if cognizance is not taken of it. During the war we have encouraged our nickel mines to produce to the utmost of their ability, and their achievements in that line demand the warmest of praise. But they have paid a heavy cost in the exhaustion of their better ores. It is our good fortune that these companies still have 250,000,000 tons of ore in reserve, or about twenty years normal supply, and though the average grade is lower we can hope that the skill of our nickel miners will put this lower grade to good account. But they will be handicapped, if not badly crippled, unless we ease the burden of taxation.

The Budget-Mr. Adamson
Some 15,000 or 16,000 men in Canada are engaged in the mining and refining of nickel, and we owe consideration to them, and the 150,000 persons who are supported one way and another by the nickel industry, as well as consideration to Canada's prestige as the world's chief producer of nickel.
I should like to say something about copper. We must think in terms of big tonnage for the future of our copper production. On the Arctic coasts of Canada there are believed to be large masses of low grade copper ore, and it is probably true that elsewhere in Canada other large deposits of low grade copper ore exist. It may well be that we shall be forced to consider the mining of these, and eventually we shall see in this dominion, operations as large as Kennecott's famous Utah Copper Mine where last year 59J million tons of ore were mined and forty-nine million tons of earth were stripped. Operations of this order, and indeed any large-tonnage proposition, require great sums of capital. It is impossible to attract such huge investment on a small margin of profit, unless the investors know that taxation will not rob them of a chance to get their money back, plus a return commensurate with the risks.
The seriousness of the situation is well recognized by the Wallace committee in a report to- this house. I shall quote three paragraphs from that report as follows:
1.	Intensified search for and discovery of new sources of supply is indispensable if the Canadian mineral industry is to survive.
2.	Ores of metals vary greatly in the percentage of metal contained and in the percentage recovered. The lower the cost of recovery the greater will be tile tonnage of ore available for treatment. Taxation charged as a cost against alining reduces the amount of metal that can profitably be recovered from a given mine. The higher the tax, the greater the loss of metal that might otherwise have been recovered.
There is a wide field for extending employment provided new sources of mineral wealth are found and new methods of utilizing those rocks and minerals, which occur in great abundance, are developed.
The essential requirements are intensive stimulation of prospecting, the provision of maps, topographical and geological, the provision of transportation facilities (roads, et cetera) into mining areas, a minimum of restrictive measures so that the prospector may continue to. be stimulated by the possibility of a find that will compensate him for years of disappointment.
3.	That adjustments be made in respect to taxation that would stimulate prospecting and mine development and mineral recovery.
And finally, I recommend to this house the careful study of clause 20, which contains this significant sentence: "An expanding mining industry will be of particular national importance and should be carefully studied." The
whole report of the Wallace committee deserves the most careful attention and, I believe, represents one of the best blueprints for the future that has yet been produced.
The Minister of Finance (Mr. Ilsley) went to great lengths in his statement to this house to compare our taxation with that of Australia. He should have been more thorough, for there are many, many instances where Australian taxation is far more generous than ours; generous let me say from a realistic point of view, because Australia, during a wave of extreme socialistic government, all but destroyed her mining industry, and the present administration has had to enact special encouragement classes of her income tax act in order to save the industry from extinction. I may say that if the present government persists in its policies the mining industry in Canada will also face extinction. I will quote the Australian act. Section 23, in the first line, reads as follows:-
The following income shall be exempt from income tax.
And paragraph (m) reads as follows:
(m) income derived prior to the first day of July, one thousand nine hundred and forty-seven, directly and in the first place from primary production, mining or fisheries in the Northern Territory of Australia by a resident of that territory.
There are three clauses dealing with exemption which I think are of great interest. I have already quoted paragraph (m), and now I will quote paragraph (o):
(o) the income derived by a person from the working of a mining property in Australia or in the territory of New Guinea principally for the purpose of obtaining gold, or gold and copper, provided that in this case the value of the output of gold is not less than forty per centum of the total value of the output of the mine.
Paragraph (p) provides that income derived by a bona fide prospector shall be exempt from income tax, and bona fide prospector is defined, and is a very broad definition.
If we applied paragraph (m) to Canada it would mean that all the present development in the Northwest Territories, including the Yellowknife field, would be exempt from taxation. I suggest to the house that if we did this in the immediate post-war years there would be a gold rush, the like of which has not been seen in history.
In connection with the Northwest Territories and the much publicized Yellowknife discoveries, it should be pointed out that this is not a new thing. For many years past, prospectors have been in this country and there have been a number of actually producing mines, one the Conn mine, a subsidiary of Consolidated Smelters, and another the Negus
The Budget-Mr. Adamson

mine, which has actually reached the dividend paying state, having returned its shareholders five cents a share during 1943.


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


Agar Rodney Adamson: May I conclude this paragraph, Mr. Speaker? I should like to go on record as supporting the contention of the Ontario and Quebec governments that th$ depletion allowance of fifty per cent on the net earnings of all metal mines be allowed and that this be extended to dividends as declared.
Secondly, that taxes paid to municipalities and provincial authorities be allowed as a deduction.
Thirdly, that all exploration expenditures made outside the property of the mine be allowed as a deduction from earnings.
If we went as far as Australia we would exempt from taxation both corporation, income and excess profit taxes on all metal mines. I believe if we did this the treasury of the dominion government and the rate of employment would both benefit. However, certain precautions would have to be taken. We would have to see that every profitable mining operation did its fair share of exploration and prospecting; secondly, we would have to see that once a percentage of capital had been returned to the company, the net earnings or a considerable proportion of them would be paid to the individual shareholders. We must safeguard our country from operators who would build up large surpluses and then take them out of Canada.
I realize that in this life and death struggle any taxation, no matter how unsound, or how discriminatory, will be paid and paid gladly; but when I see the Minister of Finance bringing down clauses which are obviously peacetime clauses, I feel that some statement of policy should be made with regard to the future of the mining industry, upon which more than all others the future of Canada depends.


Mr. W. G. WEIR (Macdonald):: Mr. Speaker, the Minister of Finance (Mr. Ilsley) on June 26 introduced into this house his sixth wartime budget of world war two. It is a budget of very large proportions calling for an expenditure of almost six billion dollars. This in itself is a huge amount of money for a population of eleven million people to contemplate. It is a budget that arrests our attention when we realize that it is about eleven times our ordinary peace-time expenditure. However, I am sure that the people of this country recognize the importance of an expenditure of this kind and are prepared to

shoulder the load and carry the taxation responsibility that goes with the prosecution of an all-out war.
It was, of course, gratifying for the minister to be able to say that approximately one-half of the revenue required for the huge expenditure last year had been raised through the general revenues and that the remainder had been largely borrowed from our own people through the sale of victory bonds and war savings certificates, and the minister hopes that the same creditable record will be achieved in the year to come. Here is one place where I think we as members of parliament can lend to the minister and to the government and to the country generally a degree of cooperation, regardless of the political differences that may exist between us. We have called upon the people of this country to come forward and lend their money and to pay taxes. I think we owe to the national war finance committee and to the thousands of volunteers who have acted with them in putting across our various victory loan campaigns a debt of gratitude which we shall be a long time in repaying. I feel that we owe to these workers a deep debt of gratitude and should lend them every assistance possible when the opportunity comes to promote another victory loan.
While taxation is high and while some of the regulations that we have during war time may be irritating, nevertheless they are a small amount of insurance for what Canada has been able to do. We are here a nation that has been at war; yet we have never had a city bombed nor has a foreign soldier set foot upon our soil, so that I think it is small insurance for us to pay when the chief obligations that are required of us are to pay out a little money to meet the taxation requirements of the country.
We have at the same time enjoyed a degree of prosperity which we have never enjoyed before in the history of this dominion, nor has that prosperity ever before been as equitably distributed as it is at the present time. The contribution, therefore, that we are called upon as civiliains to pay in this war in the way of taxation and in the way of putting up with regulations and little inconveniences is small compared with the hardships which the men on the actual fighting fronts have to bear at this time.
While the minister has seen fit to discontinue the refundable portion of the income tax, I must say that I felt right along that this feature of our taxation had much to commend it. It provided a means for creating a savings, a nest-egg for the future; and when it is realized that the refundable portion of the-

The Budget-Mr. Weir
income tax oould be offset by the payment of insurance premiums and the payment of principal on farm mortgages and on mortgages on homes, I cannot see that the burden was so very great for the vast majority of people, particularly those who are in a position to make such payments. For those who are not in that position, the refundable savings feature provided a means whereby they could accumulate a sum for the period when the war is over. After all, the majority of the people whom the minister hopes to benefit most in this regard, those in the low income tax brackets, will only secure, I imagine, the advantage of perhaps two or three dollars a week, which may easily be expended for non-essentials, instead of being set aside as a savings for the post-war period.
As was to be expected, the other political groups in this house have offered counterproposals. In other words, they would do things differently from the way the minister proposes. They believe that their proposals will appeal more strongly to the people at this particular time.
While the minister has done away with the refundable portion of the income tax, our Progressive Conservative friends opposite would raise the income tax exemption to S800 a year for single persons and $1,600 for married people, and at the same time create a fund equal to the contribution that we make to UNRRA as an amount of money available for the post-war period. Our Cooperative Commonwealth Federation friends would go one better and raise the exemption respectively to $1,000 and to fifteen or sixteen hundred dollars, and also provide $5,000 million for a two-year period after the war. It is easy for them to bring forward such proposals at this time; indeed it is their privilege that they should do so. On the other hand, the Minister of Finance is in a responsible position and must carry into effect anything that he proposes to the house. The opposition groups are able to offer proposals which they do not hope to implement, certainly at the present time; but he is obliged to face up to his proposals now and lay his plans for the whole government programme. These people present their proposals as a different method of doing things. I believe that the objective of all of us is the same. We want to prosecute this war to the end as effectively as possible. The opposition group propose to do so by a different method.
This reminds me of a traveller who was sent out from his head office to a country town. Arriving there in the early hours of the morning, he found that the railway station was a
mile or two from the business and hotel section. He looked around and could find neither street-car nor taxicab to carry him to the hotel. Finally he spoke to the station agent, who mentioned that probably the mail carrier would be down and he might get a ride to the city with him later on. At last the mail carrier arrived and the traveller secured a ride with him. He began to complain bitterly of the railway station being two or three miles away from the business section of the town, when it should have been put in the middle of the town, near the hotels, as a convenience to the travelling public. The old gentleman who drove the mails, and who had been in the town for some time, finally said, "Young man, you may be right in what you say, but there are a lot of people around here who think it is much better to have the station down beside the railway track." He had a practical approach to the problem at hand, which is the approach the Minister of Finance is up against at the present time.
May I say to the minister that, while he has affected in a direct way more people than any other minister of this government, he still holds their confidence and admiration. There is no minister who has gone into the people's pockets and collected taxes, made regulations and fixed wages and price ceilings- things of that kind-to the same extent as the Minister of Finance has done; yet he enjoys the admiration of the Canadian people for what he has achieved. Moreover, he has had the satisfaction of receiving commendation from people outside our country who have watched with keen interest the success he has made of the financing of this country during this period of war. More than that, many of the policies which were established by this government during the early stages of the war have been copied in large measure by other countries.
May I here read a little tribute to him which was carried in Saturday Night a few days ago;
Common Sense
Mr. 1 Lsley's conduct as Minister of Finance has been characterized by a degree of common sense so uncommon as to be astounding. It is pure common sense to abandon the compulsory saving device, which in principle has every argument in its favour except that it works badly. It is pure common sense to extend the tax allowance to illegitimate children and to relatives-in-law. It is pure common sense not to stick on any more taxes at this moment. It is excellent common sense to make the refundable portion of the excess profits tax a valid collateral for borrowing. We still believe that common sense will, some day, when he gets around to it, lead him to distinguish between capital payments and the interest or profit element in annuities. Meanwhile we can assure
The Budget-Mr. Weir

that the country loves him for his common sense almost as much as for his courage and his honesty.
There are three features of the government's war-time policy which to me have been fundamental from the beginning, and are now, and will be more so in the post-war period. It is unfortunate that they have not been more loudly proclaimed to the people of this country so that they may be better understood. Our price control policy has held prices stable. The result has been that it has maintained in this country a price structure which will be of inestimable value when the war is over. Some time ago I met some friends who had been to the United States, and who told me some of the experiences they had in visiting a home in that country. They pointed out that people over there were loud in their praise of Canadian policies particularly with respect to price control and its enforcement. The lady of the house remarked that since the beginning of the war the cost of running her house had risen from $20 a week to $35 a week and she did not know where the money had gone. Her little boy, eight years old, came in with a haircut which cost $1. That is some indication of what can happen, and some evidence of the advantage which we have under our price control system.
The other matter to which I wish to refer is the policy of borrowing from ourselves. This has had a far-reaching and fundamental effect. It has created a sense of thrift in the accumulation of savings and the paying off of debt. I believe the country will be gratified to know from the statement of the Minister of Finance that our debt, so far as the financing of this war is concerned, is owned to the extent of ninety-five per cent by ourselves.
I come to the income tax and excess profits system. Here, to me, is a great over-all experiment in the application of state socialism. It is applied on the basis of ability to pay, upon a graduated basis whereby those who have shall pay most. Our socialist friends, so far as I have heard or observed their various proposals, have never proposed anything as sweeping and far-reaching of a socialistic nature as our income tax system. It is a great social experiment which is working well and doing a job of equalizing opportunity and incomes. It is a social experiment with far-reaching effect. I often wonder why our hon. friends on the other side of the house cannot once in a while give us some little credit for the steps which have been taken in this particular regard.
There were three features of the budget proposals which I was particularly glad to see. It is a source of satisfaction to me that

the foreign exchange control tax and the tariff have been lifted from farm implements. The provision will include all classes of farm implements, from dairy utensils and the smallest type of implements right up to power machinery. My feeling has always been that there was little if any justification for the foreign exchange control tax ever to have been applied to tractors and power equipment of that kind. We do not manufacture tractors in this country, so that I think we were imposing a burden of cost on our farmers which w'as unnecessary. May I pause, however, to point out one thing which to me does not work out with that degree of equity and fairness which I think matters of this kind should. When the foreign exchange control tax was applied, the implement companies and others naturally added the amount of that tax to their inventory. Some of them even showed it as- an added tax. Now it is presumed, and I think they would admit it immediately, that once *that tax is removed they will be expected to reduce their prices on imported implements to an extent equal to the amount of the tax. But the point I would call to the attention of the Minister of National Revenue (Mr. Gibson) is that the same people had large inventories when this tax was applied and to-day they have little or no equipment in their warehouses, so that to me there was a class of people there who were called upon to pay a tax which they were not justified in paying.
With respect to the application of the income tax on farmers, I am glad to note the improvement that has been suggested. However, I do not think it goes far enough, and I believe our taxation authorities would be well advised to give a good deal more study to the application of the income tax so far as the farm business of the country is concerned. We hear a good deal of complaint and some good-natured gibes at the type of income tax forms which farmers are obliged to fill out. That is not the point. When we have farmers in nine different provinces, from one end of the country to the other, it is recognized that an income tax form must be all-embracing in order to provide for the various types of farming operations that are carried on. My contention has always been and still is that the income tax, so far as our farmers are concerned, should be applied on an average of a five-year basis. At the present time some $60 million is being paid out on participation certificates on wheat which was marketed in the years 1940, 1941 and 1942. If that money becomes taxable in the current yrear, then I think it is unfair, and I hope the minister will see to it that

The Budget-Mr. Weir
at least that money can be applied on the income tax year for which it was earned or in which the crop was marketed.
The other matter I should like to urge continued consideration of is that which applies to a farmer who sells out or liquidates his chattels. It seems to me to be grossly unfair, where a man has accumulated a certain amount of live stock and other products over a period of years, that when he is obliged to sell out for one reason or another, that is taken as income. If the minister has evolved regulations which will solve this very important problem I hope he will take an opportunity of making an announcement with regard to it.
Another matter regarding which I wish to make an observation or two is that of the taxation of cooperatives. I am not going to refer to this because I understand it is improper to do so, except to say that I think it is unfortunate and regrettable that this matter has not been settled. We have hundreds of these cooperative organizations small in size serving the people of western Canada, and to have them in a state of uncertainty with regard to their taxation status is most unfortunate. It is something that should be remedied at as early a date as possible.
May I for a moment say a word or two about the post-war period. One would think, listening to the observations of hon. gentlemen in various parts of the house, that nothing had been done by this government or by anyone else looking toward the post-war period. As illustrative of that point of view, I refer again to the one group proposing to spend some $75 or $80 million immediately on the close of the war, and the other, $5 billion over a two-year period. I submit that the whole programme of this government has been designed from the beginning to meet both the war period and the post-war period as well. The wide distribution of victory bonds and war savings certificates will be one of the most important instruments we have in meeting the post-war period. Millions of Canadians will have their own resources to assist them in tiding over from the period of war into the period of peace. There is a backlog of work to be done and supplies to be provided which will, in my judgment, tax the resources of the people of this country for a considerable period. It is the period later than that immediate postwar period that I fear more.
In my approach particularly to the post-war period, may I say that if I am anything at all I hope I am a ruralist. While I appreciate your big cities and what they can contribute to the betterment of mankind, nevertheless I do not think they would last very long or be
able to maintain their splendid services, the high educational facilities and other things of that kind, if it were not for the production received from the primary producers and other rural people. Rural Canada needs repairs and needs them badly. It needs new buildings; it needs actually trainloads of paint and of lumber; it needs literally thousands of carpenters. If given an opportunity, I believe it will provide a degree of employment equal to any other branch of industry in this country. Rural Canada in my judgment needs hydro electric power, particularly lighting facilities. Compared with other countries in this regard we are very much behind. I have checked up some figures and I repeat them for the benefit of the house. Hydro electric service is supplied in Sweden to seventy-five per cent of the farms; in Denmark, eighty-five per cent; in Holland, ninety-eight per cent; in France, ninety per cent; in New Zealand, seventy-five per cent; in the United States, forty-two per cent; and in Ontario, which so far as our country is concerned has much the largest amount of hydro, it is only forty per cent, while in Manitoba it is down to two per cent.
The development of hydro and its extension throughout Manitoba will be, I think, one of the large over-all post-war projects in that province. It in turn will provide a great deal of employment both in the establishment of the lines and in the production of equipment that is necessary to go with the extension of a large development of hydro facilities. This will require capital at a low rate of interest. If that capital can be secured for extension purposes at a low rate of interest, those acquiring it can make their capital investment self-liquidating through their earnings from rentals on the Winnipeg river. This to me would be an overall plan for post-war development of a self-liquidating nature. At the present time meetings are being held all over the province laying out plans, interesting local bodies, municipalities and boards of trade with a view to providing for the best possible utilization and expansion of hydro facilities. Nothing will do more to remove the drudgery and brighten up farm life than will paint and hydro electric power. Hand in hand with a development of that kind I would hope to see in our western provinces a further industrial development, particularly in the processing of agricultural products of a perishable or semi-perishable nature.
I have been through certain parts of this fine province of Ontario and have seen some of the developments that have gone on there with respect to cold storage facilities, quick-freeze plants, and things of that kind. May I say that so far as. Manitoba is concerned it is capable of producing practically any type of farm product that is produced in Ontario and
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in most of the other parts of eastern Canada, with the possible exception of special lines on a commercial scale. Nearly all small fruits and vegetables can be produced in that province. Therefore, anything that we can do toward making them more available for general use is something that I am sure should be undertaken. The farm people in the west are entitled to encouragement along this line and I hope that steps will be taken to that end.
As I said earlier, I believe that it will provide a great deal of employment. Speaking again as a ruralist, I should like to see as a post-war over-all development something in the way of assistance toward the development of community life. It might be the establishment of community halls or recreational centres and things of that kind, whereby people could take advantage of their local talents and develop them into more useful purposes, with a view to taking part on any occasion when they may be called on. A policy of that kind could do much toward *developing a community spirit and a unity of purpose, particularly in some of our more or less non-English speaking districts. There we could bring those people together and do much toward developing in them a Canadianism. After all, they have much to contribute to our everyday life, and anything that we can *do to encourage them is to our advantage.
I wanted to make a reference to housing. I do not come from an industrial constituency and therefore I have not quite the same appreciation of this matter as members from large cities have; but I say to you, Mr. Speaker, without hesitation, that the need for housing is very great in large areas of rural western Canada. The people who appear to be most in need at the present time are those who live in the smaller towns. Our approved lending institutions have not given them the same attention as they have to larger areas. I hope that the smaller towns will be kept in mind in any programme that may be worked out in the new proposals which are to be introduced.
I hope that the Minister of Agriculture (Mr. Gardiner) can be assisted in further expanding and developing the Prairie Farm Rehabilitation Act. Water conservation and development and reclamation schemes are all part and parcel of a post-war programme. I wonder if people realize just what prairie farm rehabilitation has meant to the production of live stock, so badly needed during this particular war period. There were put down in western Canada some eighteen thousand dugouts to supply water for farmers to produce live stock who in a large measure were previously unable to do so. Therefore I hope
 '
that steps will be taken to see that the minister has an opportunity to develop further the prairie farm rehabilitation! programme.
I had intended to refer to some of the other matters that the government is undertaking looking toward the post-war period. But as my time has nearly expired I shall refer to them only briefly. Some people would attempt to lead the country to believe that the government has done nothing toward post-war planning. Earlier I made reference to what I thought was part and parcel of the government's programme with respect to the war and the post-war period. The plans made at the beginning had in mind not only the war period, but also the post-war period as well. Since that time the government has instituted several far-reaching inquiries and investigations, and called in the most capable people who could be gathered around it to give advice. I recall that in 1941 a committee of reconstruction was set up under Doctor Cyril James of McGill university to study post-war problems and make recommendations to the government. That committee has submitted a report, and those hon. members who have taken occassion to read it must have recognized that it is a comprehensive report. Later a committee was appointed on economic policy under the chairmanship of the deputy minister of finance. Then a committee of this House of Commons has been studying reconstruction and rehabilitation matters for the past few years. People and officials from all walks of life have appeared before this committee. In fact, reading the evidence and recognizing the witnesses who have appeared one finds it hard to conceive of any branch of the post-war problem that has not been given attention by this committee. It is still carrying on its activities. Then we have the committee on social security which has been carrying on for two years.
I had intended to speak particularly on some of the matters outside Canada and in which Canada is playing a leading part. I refer to international conferences looking toward the post-war period, looking to the time when the war will be over and when-


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


William Gilbert Weir: No, thank you. My time is just about up. When plans can be made for the period of peace, HNRRA, in which Canada plays an important part, is one of those. The conference on food and nutrition, attended by forty different nations is a study of post-war nutritional matters. Then there were certain proposals put forward by the governments of the United States and Great Britain with respect to post-war monetary

The Budget-Mr. Noseworthy
policy, particularly the establishment of a unified system of exchange. Here again Canada submitted a proposal which met with a very large measure of approval. At the present time, I am informed, this matter is being dealt with at a conference of representatives of forty-seven of the united nations, who are. seeking an agreement in regard to the establishment of an international monetary policy for the post-war period.
So that, Mr. Speaker, I submit that plans are well advanced; that the groundwork has been laid for proposals which may be easily whipped into shape in preparation for the time when the war will be over. The meeting of dominion prime ministers in England only a few months ago was another conference which I think might be regarded as one more step to prepare for the post-war period. Therefore we have all this groundwork, both in our own country and abroad, with which we have been actively associated. In addition, every municipality, every city, every town and every hamlet have carried on studies and made plans for the period following the war. So that I believe we can say with some confidence that at least we know where we are going in this connection.
We are indeed a fortunate country. We enjoy a high standard of living, which was never so equitably distributed as at the present time. We have made and will continue to make progress, but in doing so we must help others. Some may fear that as we help others we may adversely affect our own standard of living. To those having this fear I commend the words uttered by President Roosevelt some time ago, when he said that as we help raise the standard of living of other people we help raise our own standard of living as well. When one views the international post-war plans now being developed one cannot help feeling that a realistic approach is being made. Let us hope that nothing will occur to offset the plans already so well advanced' in the direction of carrying out the ideals of the Atlantic charter. Looking to this post-war period; approaching it with all the sincerity at my command, to me there is only one man in the public life of Canada possessing the experience, the capacity, the understanding, the contacts and the approach which will be required of the person representing this country at the peace conference when that time arrives. That man is none other than our own Prime Minister (Mr. Mackenzie King). Therefore I say that Canada will do well to bear in mind the period following this war, because whatever is done at the peace conference will have a lasting effect upon the world, and upon Canada.


Mr. J. W. NOSEWORTHY (York South):: First of all, Mr. Speaker, I wish to congratulate the hon. member for Macdonald (Mr. Weir), who has just taken his seat, on his eloquent confession of faith in his party and his government. I am quite sure his belief that the public still have confidence in that party, in the light of what has been taking place during the last two years, must be very reassuring to his colleagues on the other side of the house. I shall not say anything to shake that confidence.
The point of view of the Cooperative Commonwealth Federation party has already been set forth in this debate by the hon. member for Rosetown-Biggar (Mr. Coldwell) and other members of this group. By way of general observation I want to say that it is quite evident from the budget that this government still pins its faith upon our present monopoly, capitalist system, and that where the government has entered the field of public ownership it has done so reluctantly and as a war measure. Quite evidently it is the intention of the government to withdraw from this field, once the war is over, just as quickly as conditions permit. When you accept and recognize that position the budget becomes intelligible and is probably as progressive as could be expected, having those objectives in view. This much is certain, that if we are to fall back upon private enterprise to maintain production and keep up our national income, to provide employment and mass purchasing power after the war, we must give this enterprise whatever concessions are necessary to-enable it to do that job with adequate profit to capital.
I regret that the budget contains no reference to the broad field of education. I should like to urge upon the members of the cabinet that when the dominion-provincial conference, to which reference is made in the budget, is convened, educationists and education officials be given a place at that conference and that an arrangement be made under which the government may take some steps to deal with; the general subject of education in this country.
I should like to confine myr remarks to-night to two subjects mentioned in the budget, mining and oil. At page 4183 of Hansard the minister points out:
The government has very much in mind the need of a comprehensive and many-sided programme to encourage the efficient development of our natural resources and to assure that these-industries will make the maximum contribution to the expansion of employment, national income and national wealth after the war.
It is quite evident that private enterprise, as evidenced in the field of mining, and in the oil fields, has failed to meet the needs of the-
The Budget-Mr. Noseworthy

nation, in war time. It is quite apparent that, by various measures, the government has had to come to the assistance of those enterprises, by tax relief and other concessions. All are agreed, I think, that some important changes are needed, if those industries are to function in the future.
The minister also indicates that this subject will be reviewed at the coming dominion-provincial conference. In the budget certain concessions are made to the mining interests. Already new companies enjoy a three-year exemption from excess profits tax. Last year's budget made a provision whereby mining companies may write off exploration and prospecting expenses incurred while prospecting anywhere in Canada for base or strategic minerals. This is extended for another year by the present budget.
Undoubtedly the changes in income and excess profits tax will also benefit the mining companies. Then, one-half the expenditures on maintenance and repairs now to be charged back to the income of previous fiscal periods, may also be used to assist the mining companies, since they may include underground development work as part of their maintenance costs. I presume also that the concessions in the budget with respect to research will benefit the mining industry.
Even these concessions do not meet the requests of those interested in mining, and particularly those interested in the purchase and sale of mining stock. They are asking for much more than these concessions indicate. They ask that the depletion allowance be raised from 33J per cent to 50 per cent of the net earnings of metal and industrial mineral mines. They want the taxes paid annually to provincial and municipal governments to be allowed as a deduction from the earnings of all mining companies, before assessment for dominion income or excess profits tax purposes. They want also that all annual expenditures made by mining companies on outside explorations in any part of Canada, except cost of options or the purchase of property, be allowed as deductions from earnings before assessment for dominion income and/or excess profits tax.
The hon. member for York West (Mr. Adamson) has ably set forth the case for the mining companies, and the claims which have been put forth in various briefs by organizations interested in mining. I think all hon. members recognize the importance of mining in the national economy. We are all anxious that in the post-war period the mining industry, and other natural resources of this country, should be developed in the interests of the people of Canada. Doubtless drastic changes are needed.

There are, however, other factors which have to be taken into consideration, and which should be considered by the dominion provincial conference, when it sets forth the new conditions under which mining is to be conducted. Let it not be forgotten that it is not the prospector of whom we have heard so much in the house, who usually profits from his discovery of mining claims or minerals. Usually he is the one who profits least from the discoveries he makes. Let us also remember that in many instances those who derive the most profit from the mining industry are those who manipulate the mining stock market, and who make little if any contribution to the actual development of our natural resources.
Again I think we should keep in mind the fact that we have no assurance, when the government has come to the assistance of mining companies, by way of tax concessions and various other means, that when those mining companies reach a profitable stage of development the profits accruing therefrom may not revert to a very few individuals, and the general public profit but very little.
There is another point which should be considered. Even to-day, with all our drastic tax regulations, it is still possible for those who are interested in mining to secure properties from prospectors, organize stock companies, unload the stock on the public and make profit therefrom, while their profits from that field go untaxed, since they are considered as capital increase, and not profit. That is a very broad field which has not yet been touched by our tax collectors. I think it would be well to consider what has happened in respect of one very successful mining company which in its 1943 report has complained of high taxes, shortage of manpower, the high cost of labour and decrease in profits. Let us review its history, briefly.
I refer particularly to the Lake Shore mines. This mine was incorporated in 1914, and began milling operations in 1918. The property is in the Kirkland lake area. In 1933 it obtained control over Kirkland, Hudson bay claims, Minnaker, and Kirkland claims. Its operations have been extremely profitable, as I shall show from figures taken from the Financial Corporation Analysis for October 11, 1943. This company when incorporated was authorized to issue and did issue 2,000,000 shares of stock at a par value of $1 a share. On this 82,000,000 capitalization the company has paid dividends and bonuses totalling 890,420,000 or $45.21 a share of a par value of SI. Since 1918, that is to say, every dollar

The Budget-Mr. Noseworthy
[DOT]originally invested has earned $45.21 a share, or an average yearly return of $1.80, or 180 per cent, on the original investment.
Dividends and bonuses reached their peak in the depression years. Dividends reached $6 per share, or 600 per cent on the original investment in 1937, and $5 per share, or 500 per cent in 1938. In the banking and commerce committee we have been giving the bankers a Tather rough ride for having paid dividends amounting at one time to sixteen per cent, but in the light of this 600 per cent the bankers are novices compared with these men as financiers.


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


Joseph William Noseworthy: Surely.


George Ernest Wood: In view of what the hon.
member has just stated, the great profits of one particular mining company, would it not be fair for him to mention some other mines in which there have been great losses, because if the government went into it they would have to absorb those large private enterprises and stand the losses. I would like the hon. member to give us an answer to that.


Joseph William Noseworthy: The point I am
making here is that when the government has made tax concessions, when it has come to the assistance of the mines in order to bring them to the stage of development, there is no evidence that the public is going to profit by reason of the government's investment. On the contrary, the likelihood is that the government will bear the expenses of those mines that are unprofitable, while those that are profitable will pass their profits on to a very few individuals.
Even if we base those dividends on the book value rather than on the par value of the stock the payments are still exorbitant. In terms of book value they range from 149 per cent in 1939 to 35 per cent in 1943. The tremendous dividends paid on the stock have raised and maintained its market value at fantastic levels. This stock which sold originally at $1 par value reached a high of $62 in 1936. It was never lower than $16. It was $16 in 1926 and is back again near that price at the present time. Despite the tremendous aggregate of $90,420,000, the capitalization remained unchanged at $2,000,000, and the concern has remained relatively small. Its total assets in 1939 were valued at $8,066,358, and in that year it paid in dividends $8,000,000. In other words, it paid in dividends almost as much as its total assets were valued at. The company has unquestionably exploited the natural resources
and has paid out tremendous dividends totalling many times the original investment. Little has been set aside for depreciation. Surpluses above dividends have been valued at considerably more than the total capitalization, and in some years, for instance in 1939, 1940 and 1941, the company paid part of its huge dividends out of its accumulated surplus.
Mining interests are asking the government to raise the ante on depletion exemptions, to exempt depletions up to fifty per cent. Here was a very successful mine which depreciated its own surplus in order to pay out dividends, the depletions being from $1,278,129 in 1939 to $198,682 in 1941. Yet these are the people who come to the government asking that a greater allowance be made for depletion. In other words, instead of the surplus earnings from this company being used to any extent to finance an expansion of operations so as to increase total output, they have been dissipated in the form of large dividends and bonuses to stockholders.
The total value of assets, gross earnings, net income and dividend (payments from Lake Shore Mines has been falling steadily since the war began, and taxes have declined correspondingly. The dividend rate, however, has remained substantial. Even the eighty cents per share rate or $1,600,000 in total dividends and bonuses in 1043 represents a return of thirty-five per cent on the book value of the stock as of that year and more than twemty-two per cent of the total assets of the company.
As I have pointed out, in 1939 the dividends totalled $8,000,000, or almost the equivalent of the entire value of the total assets of that year. Despite this phenomenal record of earnings, perhaps because of their dissipation in huge dividends and bonuses, the company reported difficulty in maintaining operations. In its annual report for 1932 it complained that:
The war has made it necessary to tax the income of mines far beyond the point wdiere they can expand or even long exist.
This statement, in the light of the record of this company, and as made by this company, is simply ridiculous. In 1943 their report points to other difficulties: The labour strike in 1941-42, the growing man-power shortage in wartime, the growing degree of "rockburst" due to greater depth of operations, have all reduced the tonnage of ore processed and thus reduced earnings. But "in the meantime," the report states:
. . . operations continue to show a good profit, ore reserves developed ahead of mill requirements are adequate, results of new deep levels carry considerable promise, and the company's
The Budget-Mr. Noseioorthy

financial position remains strong, with the present dividend rate of 20 cents quarterly fairly well protected with current earnings.
As regards the tax policy of the future, this company's record, at least on the face of it, would justify maintaining the present excess profits tax and maldng no allowances for depreciation and expansion. It has earned enough to finance many times more expansion than it has ever undertaken, even in war years. Tax concessions in this case would merely fatten the net income of the concern and enable it to pay even more fantastic dividends. It raises the question as to what extent can we depend upon the profit motive to provide socially useful expansion in our mining area.
Another industry about which the government has becomq very solicitous, an industry to whose assistance the government has had to come in war time, is the oil industry. In the light of the fact that one company, the Imperial Oil company, controls fifty per cent or more of our supply, and was recognized by the Stevens committee as being the company which fixed the price for other companies, and inasmuch as this company is about seventy per cent owned by Standard Oil, it is well to look into its earnings, as an enterprise to which we have made such concessions in the Northwest Territories, before we begin making too many more government concessions. I have not time to go fully into the history of this company. It is an example of a corporation which has grown tremendously, has financed its own rapidly expanding operations and has built up a large capitalization almost exclusively through ploughing back its surplus profits into its business.
The original number of $100 par shares was doubled in 1915 with a 100 per cent stock dividend, and has been increased sixty-four times since then by three four-to-one splits in the stock. So that for every $100 par share originally held, there now exist 128 shares of no par value whose book value is $5.80 a share and whose present stock value was quoted yesterday at $14.50 a share. In other words'; for every $100 invested in the original company there is now $1,856 in stock. The original capital investment of $10 million has grown to about $40 million by other issues of stock. To-day the total assets are given at $181,250,000. In addition to the splits in stock, shareholders were able to get additional purchases of shares at especially favourable prices. The dividends paid on these shares have been very substantial. The par value of the shares was $25 up to 1924. In 1925 they were split four wa3rs, giving them a nominal value of $6.25 each. On this $6.25 nominal par value

dividends per share were paid as follows: in 1925, $1, or fourteen per cent; in 1926, $1.25, or twenty per cent; in 1927, $1.50, or twenty-five per cent; the same in 1928. In 1929 the stock was again split four ways, giving a nominal par value of about $1.56 a share. On this basis the shares paid dividends as follows:
1929,	87^ cents, or practically fifty per cent;
1930,	$1, or sixty-six per cent; 1931 to 1933, fifty cents, or thirty-three per cent; 1934; 92J cents, or sixty per cent; 1935 to 1938, $1.25, or eighty per cent; 1939, $1, or sixty-six per cent; 1940, 62J cents, or forty per cent; 1941 to 1943, fifty cents, or thirty-three per cent. In other words, there was continual splitting and multiplication of stock during the boom days of the twenties, and on this split and multiplied stock, earnings per share remained the same during the nineteen-thirties. Since the outbreak of the war this has been reduced slightly but still is exorbitant in terms of what the stockholder has put into the concern.
Those are the companies which are to-day crying for government assistance, for remission of taxation, companies to whose assistance the government has had to come in order to meet the war needs of the nation. Certainly a situation of that kind provokes the question raised by the minister in his budget speech, that of the need of some radical change being introduced if those industries are to function in the interests of all the people of Canada, instead of functioning, where successful, in the interests of a comparatively small group of shareholders. Hon. members opposite and to our right may disagree with the policy of the Cooperative Commonwealth Federation in relation to those companies; but disagree as you will, I think we have to face the fact that neither in peace time nor in war has the development of our natural resources, as it has been carried out in the past, met the basic needs of the people of Canada, so that some means whereby that development can be brought into line with the needs of the country must be found by whatever party takes government in Canada.


Mr. A. D. LEGER (Kent, N.B.):: In taking part in this debate I wish first to congratulate the Minister of Finance (Mr. Ilsley) upon the able way in which he delivered the budget. The budget this year is of great magnitude, which I would say was contemplated by all serious thinking Canadians, though those who want to play politics will find faults in it. This would be expected in peace time, but surely not in war time and especially at this crucial moment when our forces, along with those of the allied nations, are in the most desperate struggle the world has ever known.

The Budget-Mr. Leger
We are, one would say, at the cross-roads in the battle of freedom and democracy. The Canadian people in general want this government to supply the armed forces with all the best equipment that money can buy. In these modern times science has developed so many instruments of destruction which are very costly, but they must be supplied in order to beat down the forces of evil who are attacking us.
We are winning the war, but more gruesome days are still to come. Evil has never won over righteousness. The supreme power is on our side, and for this reason we shall win, so that the four freedoms of the Atlantic charter may be obtained. The Canadian people have done a great job so far and will keep on doing so until the war is won. Industry has produced beyond our imagination. Our farmers and fishermen have produced more than at any other time in our history, with much less manpower, which means that they have worked harder and longer hours. They have done so and will do so to the end of hostilities. There are certain regulations which had to be passed in order to stop inflation and they do not suit many of us; but it must be realized that they were passed for the general welfare of our people. Canada was asked, along with the Americans, to feed most of the allied nations, and as the war progresses they are being asked to feed the nations that we are liberating.
Canada has a big job to do and will do it, because all the Canadian people understand and know the hardships, the sacrifices, the torture and the humiliation which the European peoples have had to endure in the last four years. One must also take into consideration the destruction which has occurred and which is taking place at present in England, in North Africa, in Russia and all over Europe. We in Canada have until now been very fortunate, so much so that some Canadians- thank God only a small group-do not realize the seriousness of the war and are prepared to criticize the restrictions which had to be passed.
During this session the government has established a reconstruction department whose duty it will be to provide work, to launch public programmes, to develop more natural resources, to turn every war-time plant into a peace-time industry, and to provide certain facilities to our maritime farmers and fishermen, as well as to meet certain needs of the western provinces. The farmers of New Brunswick, especially in my riding of Kent, are in need of warehouses and cold storage facilities so that the farmers may keep and sell their produce in groups rather than individually. The fishermen of Kent county as well as of the maritimes generally need quick-freezing
plants at certain points in each county so that their fish will be quickly frozen, and as soon as possible after it is caught. In this way the fish will maintain the good flavour which it has when eaten fresh, and the people of the central provinces will then appreciate our different varieties of fish caught in the salt waters of the maritimes, the flavour of which is so superior compared with that of fresh water fish.
Candidly, I believe that the Minister of Finance should carefully consider these suggestions with the new Minister of Reconstruction and have them become realities after the war. A programme of decentralization of industry should be embarked upon as soon as possible. We . should undertake the development of our natural resources in all Canada and not only in the central part of the dominion, and when I say the central part I mean Ontario and Quebec. We have in the maritimes, at Hopewell, New Brunswick, near Moncton, a great hydro possibility through the harnessing of the tidal water at the junction of the Memramcook and the Petit-codiac rivers. Both these rivers meet at one point to flow into the bay of Fundy. It is known that these rivers and the bay of Fundy have a great rise and fall, an average of forty feet twice in twenty-four hours in normal times, and as high as fifty-five feet in the spring at Hopewell.
I am glad to know that both the government of New Brunswick and the dominion are negotiating to have an accurate survey made of these possibilities. If this investigation proves the project feasible, we should embark upon the construction of it as soon as possible after the war, because this development would provide electric power as cheap as any place in Canada, thus inducing manufactures to establish in our province. Doctor Turnbull, a prominent engineer, has made a thorough study of the project and believes it is quite feasible and could produce electricity as cheap, if not cheaper, than any other hydro development in Canada.
We must also see to it that the national revenue is fairly distributed among all classes of the nation-especially the farmers and fishermen of the maritime provinces. Floor and ceiling prices must be established if we want to control the revenue so that it is fairly distributed among all classes. My reason for mentioning this at this time is that we all know that the Department of Finance plays a big role in all these ventures. The people of Canada and the world want these things to become a reality and the government will have to do something. We all know what happened to France with all her different
The Budget-Mr. FulforcL

parties; we are on the verge of the same reaction in Canada unless the Canadian people wake up to the fact that a government is the people of the nation, and the money it spends must come from the people in fhe form of direct or indirect taxes or loans. Let us imagine having some irresponsible or radical government handling Canada's affairs after the war. This would be disastrous for the future progress of Canada. It is a recognized fact that the Prime Minister (Mr. Mackenzie King) is one of the outstanding political economists in the world to-day. Fortunately, the Canadian people are realistic and recognize very well that the future of Canada depends on the present Prime Minister remaining at the helm of the government, so that when the war is finished, he will be at the peace table looking after the interests of Canadians for generations yet to come.


Mr. G. T. FULFORD (Leeds):: Like the hon. members who have preceded me in this debate I wish at the beginning of my remarks to compliment the Minister of Finance (Mr. Ilsley) not only on this budget but on all preceding budgets that it has been his responsibility to introduce im this house. I know it is not a pleasant job to increase taxes year after year as the war progresses. Especially would that be disagreeable when he himself has to pay the very same taxes we and all the rest of Canada are asked to pay. This is total war, and that is our method of financing our share of the war. I believe Canada's contribution will go down in history as one of the most remarkable that any country with a small population has ever made in time of war. Surely the responsibilities and duties of the minister should not be made doubly hard by sniping at him from ambush, especially by members of his own party. It is indeed a load too much for any one man to carry.
The people of Canada have confidence in our minister. I do not believe that there is anybody in the government in whom they have more confidence; yet there are those in this house who condemn him for doing what he knows in his own mind is right, although at times it is the hard road for him to follow. Oh, it would have been a great thing if in this last budget taxes could have been substantially reduced. I am sure that nobody would have enjoyed reducing them more than the minister himself; but may I repeat, this is total war and the war is not yet won. The German army is showing signs of disintegration, but we get very little news of the morale of the country. If Germany does collapse this year, as we all reverently

hope and pray, we still have Japan to defeat and we still have the immediate post-war period which will require tremendous financing.
I believe that certain inequalities have been eliminated in this budget. I was particularly pleased that the tariff and the excise foreign exchange tax have been eliminated from farm machinery. In spite of what the hon. member for Qu'Appelle (Mr. Perley) said this afternoon, there is no doubt that as soon as farm machinery is again available in large quantities farmers will have to renew a great deal of the machinery which is not only worn out but, in many instances, obsolete. During the years of depression many farmers were unable-to buy even repair parts. They had to resort to makeshift repairs by the local blacksmith shop or by themselves in order to keep their machinery together. As soon as the war is over, those machines will be renewed, and there will be a great saving to the farmers-who buy machinery not only in the vast prairies of our west but also in eastern. Canada.
I was also pleased to see the ten per cent, compulsory savings clause of the income tax act abolished. By the abolition of this feature of the act those who are wage-earners in the low income tax brackets will benefit the most and, as incomes increase, the saving will be increasingly smaller until the limit of SI,200 is reached. In many instances this compulsory saving was never paid owing to the offset of insurance policies and other methods of -saving effected by those who could afford to do so.
Representing as I do a riding which is partly agricultural and partly industrial I heartily commend the minister for the two reductions which have been effected in this budget. I am very keen on having a floor maintained after the war under agricultural prices. Never again do I want to see the farmers of my riding, which is one of Canada's greatest dairying: counties, having to accept sixty-five cents a hundredweight for milk. To-day they are receiving roughly $2 a hundredweight, which is a fair return for their labour and capital investment. I believe that by long term agreements with Great Britain and reciprocal agreements with other nations throughout the world, Canadian farm products can be sold at established prices and our surpluses disposed of beyond the shores of this country.
I should like to speak yery briefly of small industries which before the war were working on a shoe-string, industries employing from six to twenty men or women. Some of these industries are engaged on war contracts, and

The Budget-Mr. Fuljord
consequently are allowed special depreciation, but I would say that by far the greater proportion have carried on as in peace time, or have received subcontracts from the larger war industries. Many of these concerns made such small profits before the war that they lived from hand to mouth. While they had the right to appear before a board of arbitration to decide what should be their normal profit, when the 100 per cent excess profits tax is collected, apart from the twenty per cent which is to be refunded after the war they will be left without reserves, and unless they are given special consideration I am afraid many of these industries will not be able to survive the period of readjustment.
It is my sincere belief that the vast majority of hon. members on all sides of this house are conscientiously endeavouring to improve the conditions of the common people. To be conscientious, however, one must be sincere and, above all, consistent. For that reason I was astounded at the remarks of the hon. member for Dufferin-Simcoe (Mr. Rowe) as reported at page 4338 of Hansard:
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. Why? It would seem that they are needed more now; they are needed more at the present time.
Now I turn to page 4346, where I find the amendment moved by the hon. member, and read paragraph (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.
I do not think anything could be more inconsistent, more completely contradictory than those two statements. I also believe that our hon. friends opposite must be pretty hard pressed for arguments when the hon. member for Vancouver South (Mr. Green) should have to devote the greater part of his speech to a criticism of the man-power policy of the government. It is true that our man-power policy is not perfect, but I venture to say that one of the matters most criticized in any democratic countries constituting the united nations is the very point dealt with by the hon. member for Vancouver South. I know you seldom pick up a United States newspaper without reading some article or the report of some speech condemning the United States selective service system, in spite of the fact that the United States has had conscription for overseas service since the outbreak of war. To
me it is a revelation that Canada, a country with a small population, should be able to produce so much. It is true that we have a vast store of natural resources, but if our man-power policy had been completely at fault we never would have been able to attain the position Canada occupies to-day, as the fourth largest producer amongst the united nations.
Since coming to this house I have followed as closely as possible the arguments advanced day after day, week after week and month after month by the Social Credit party, but I am still in the dark as to just what their members propose. If they can solve the problem of distribution after the war, I say, more power to them, but certainly I have not heard anything from that corner of the house to lead me to believe they will be able to do so. If they could do away with the old vicious circle which is characterized by the man planting corn to raise pigs to kill pigs to make fertilizer to grow corn, then they would accomplish a great deal, but I doubt if we shall ever see that vicious circle again.
The policies of the Cooperative Commonwealth Federation should be clear as crystal, but somehow they are not. To me they are a potpourri of socialism and. if I may use a modern slang expression, double talk. I have found it impossible to get anything but evasive answers to pertinent questions. I have yet to hear the leader of the C.C.F. party, the hon. member for Rosetown-Biggar (Mr. Coldwell), definitely state what is meant by the conscription of capital. By that does he mean the conscription of savings accounts, or life insurance policies or war savings stamps or bonds? How much of it or would all be conscripted? Nothing but evasion has ever been given to that question. In fact, I find that asking members of the C.C.F party for a definite answ'er is like trying to nail a piece of jelly to the wall: it just does not nail.
On one hand we hear private monopolies condemned, while on the other hand, according to the logic of the C.C.F., they would create the greatest monopoly of all, namely complete government ownership. They decry the capitalistic system, the system under which Canada has built up one of the highest standards of living in the world. I believe that our standard of living is exceeded only by that in the United States, which, incidentally, is also a capitalistic country.
Actually the whole world was in turmoil before the world war. There was greed and suspicion instead of determination and understanding among members of the League of Nations. Here are but a few factors the C.C.F. omit to mention when referring to the depres-
The Budget-Mr. Fuljord

sion, one of the world's worst depressions, which occurred in the decade preceding this war.
First of all, we must go back to the stock market crash in 1929. From 1926 to 1929, everyone who could scrape up a few dollars plunged into the stock market, in an attempt to get money without working. Stenographers in offices, filing clerks, yes, even office boys would spend their lunch hours in brokerage offices, watching the prices of various shares as they appeared on the ticker tape. This was one of the most glaring examples of inflation that one could imagine. Certain stocks rose to unheard of heights, even after commodity prices had started to break.
Naturally, deflation set in, and overnight, in October, 1929, millions were wiped out. Certain regulations have since been put into effect which, I believe, will eliminate any such wild orgy as we saw on the stock market between 1926 and 1929.
In the early thirties Russia was completing its first five-year plan, and was beginning its second five-year plan; the grain markets of the world were flooded by Russian grain, particularly Russian wheat. I am not condemning Russia for taking this action. I happened to be in Russia in 1931, and I saw people going without the bare necessities of life in order to sell this grain abroad, so that they could acquire the necessary foreign exchange and foreign gold with which to buy the machinery to start their industrial development. Had they not made that sacrifice, I do not believe the Russian people would have been able to throw back the German hordes as they did at the gates of Moscow, and as they did from the very heart of Stalingrad. It was through that sacrifice that Russia came out on top. Nevertheless, the fact remains that Russia undersold the world's grain markets, and farmers in the Canadian west had to suffer.
Then, let us consider the accumulation of gold in the United States at that time. That gold was sent to pay for war debts owed to that country, and it was promptly buried at Fort Knox, Kentucky. No one realizes mistakes to-day more than does the United States.
One of the problems which must be faced and solved at the monetary conference taking place at Bretton Woods, New Hampshire, will be to find methods of using this gold, so as to create credit in those countries that have felt the oppression of the nazis, and those countries which will have to be rebuilt from the ground up, financially and economically, after the war.

We must remember, too, the war of tariffs which began and continued throughout the thirties. Each country thought it could live unto itself. We know that after this war no country can live unto itself; no country can dominate the rest of the world. We must learn to believe each other, to help each other and to develop a league of nations which will really function, a league of nations in which countries will respect and trust one another.
We remember, too, the growth of fascism, which started in Italy. That belief rapidly spread to Japan. We must remember, too, that Japan was the first country to take action in this war, when she marched into Manchuria in 1931. At the same time Japan was flooding the world with cheap goods. All hon. members will remember electric light bulbs made in Japan which burnt out the very first time they were placed in a socket. At the same time Germany undersold the world in heavy machinery and manipulated her foreign exchange in such a way as to get gold to purchase the essentials to manufacture war materials. Germany then took back the Ruhr, and Italy marched into Ethiopia.
All these factors contributed to the world depression-not the capitalistic system. We shall recall, too, the anschluss in Austria, the Munich conference, with the whole world upset. We remember the carving up of Czechoslovakia, with the result that the world was in a maelstrom of uncertainty.
As a final result, war broke out. But war will not always last. Canada can come out on the top, if we hold our heads after the war. We shall come out on top if we retain those sound financial policies set forth by our Minister of Finance, and if we carry along on the road laid by him. We owe it to those who are overseas that the Canada to which they will come back will be on a sound basis financially and economically, not a Canada in which a group of inexperienced experimenters are trying to run the country.
On motion of Mr. Ralston the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, July 7, 1944