1945-12-08

VETERANS AFFAIRS


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs) moved that the house go into committee at the next sitting to consider the following resolution:
' That it is expedient to present >a measure, as recommended and reported by the Special Committee on Veterans Affairs, to provide rehabilitation allowances to temporarily unemployed veterans or their dependents and to veterans undergoing vocational or educational training with provision also for the application of The Unemployment Insurance Act, 1940, for the veterans' benefit by contributing the amount of the combined employer's and employed veteran's contribution into the unemployment insurance fund, from moneys appropriated by parliament. Provision is also made authorizing the governor in council to take such measures as may be necessary to remedy any depletion of the said fund resulting from the payment out of such benefits.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I should like to direct a question to the Minister of Justice on a matter to which he gave an answer some days ago. On November 2, in reply to a question of mine, the minister indicated that the government had under consideration amendments to the criminal code which would help deal with the present outbreak of crime and violence in 47C96-198
many sections of the country, and went on to say that consideration was being given to the passing of a special order in council designed to deal with the situation until legislation could become operative. Would the minister tell the house the result of the consideration which has been given by the government, and what are the present plans?
Hon. L. S. ST. LAURENT (Minister of Justice): Mr. Speaker, a draft recommendation was prepared for study. After very serious consideration of that draft it was not found to be one that it would be advisable to ask his excellency to approve. The matter was again gone over by the law officers, the commissioner of the Royal Canadian Mounted Police and other officials whose opinion on this matter we value, and consultations are being held between representatives of the commissioner and the attorneys general of the provinces in that regard. The stage has not yet been reached where anything definite has been decided upon.



HOLIDAY TRAVEL


[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: I should like to direct a question to the Minister of Transport; I regret I did not have time to give him notice. Have representations been made to the minister in regard to the restoration of holiday rates for students travelling to their homes by rail, bus and steamship during the Christmas holidays? In the representations made to me this seems to be considered very important by returned veteran students.


Hon. LIONEL CHEVRIER (Minister of Transport):: No representations have been made to me so far as I am aware, but I shall ask my officers for a report and give my hon. friend a reply on Monday.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. J. L. ILSLEY (Minister of Finance):: I think this would be a suitable opportunity to make one observation in regard to the course of business of the house, and I am speaking now of the Bretton Woods resolution.
I cannot speak in the debate at this stage unless I conclude the debate, and it is still in progress. I would make an appeal to those who are opposed to the resolution to cooperate with the government in concluding this debate.
I would not say this if there had not been

Bretton Woods Agreements

abundant opportunity for discussion. I am proceeding on the assumption that it is not the wish of those opposed to the resolution to oppose it by the consumption of time; rather I understand they wish to oppose it by argument, and there has been abundant opportunity for that. If this morning we could finish the resolution it would give me an opportunity to introduce the bill, have it given first and second readings and referred to the banking and commerce committee, and I am informed that this committee could begin its sittings on Monday. The committee is the place where the most satisfactory progress can be made in examining the provisions of the bill, rather than by an extended debate in this house.
I am simply making this appeal to hon. gentlemen. I think they have had an opportunity of expressing their views and, while I am not suggesting this, if they wish to make their position known by their vote I would have no objection, so long as the debate is concluded and the measure sent to the banking and commerce committee. As the hon. member for Vancouver East (Mr. Maclnnis) said last night, there will be more than one opportunity for them to argue the case again when it comes back into this house; and if they see fit to vote against the bill then they will have that opportunity. My concern is to get this matter to the stage where we can really make progress.


Mr. M. J. COLDWELL (Rosetown-Biggar):: If I may ask the minister a question, will not an opportunity be given to make known our opinion on the bill through a vote when it comes back from the banking and commerce committee? I think many hon. members are undecided on this measure and will facilitate the sending of this resolution to the committee by voting for it, but without committing themselves to the provisions of the bill when it comes back to the house.


James Lorimer Ilsley: That is correct. The hon. member will recall the course we took here in connection with the revision of the Bank Act. The members of his party are opposed to the principle of our banking system in one sense, but they are not opposed to the principle of a bank bill. When this goes to the banking and commerce committee they can vote against the provisions of the bill; when it comes back to the committee of the whole they can vote against it; when third reading is moved they can vote against it. There is opportunity after opportunity to oppose it, but the important thing is to get it to the
fMr. IW<T.]
banking and commerce committee as soon as possible, where progress really can be made in discussing its provisions.


Major James William Coldwell: That is what I wanted to have clear on the record.
Mr. SOLON E. LOW (Peace River): It should be remembered, however, Mr. Speaker, that when the vote is taken on the second reading of this resolution hon. members will be endorsing or opposing the principle of this whole measure. That is something we must keep in mind, and that is why we have been so anxious that a full dress debate should take place before the matter goes to committee, in order that hon. members may have a chance to decide whether or not the principle of the bill is one they can endorse.


Major James William Coldwell: I disagree with that view.


James Lorimer Ilsley: On behalf of the government I will say that we will regard the principle of the bill as being set out in the objects of the Bretton Woods agreements, with which everyone is agreed, rather than as contained in the provisions of the Bretton Woods agreements.


John Bracken: A day or two ago I asked the Minister of Finance if he would let us have as soon as possible the white paper issued by the United States, and also the joint statement issued by the United Kingdom and the United States at the time the loan arrangement was announced. The minister advised the house that he did not have the complete statement of the two governments, nor did he have the white paper. I think it would help in the consideration of the merits of this proposal if we could have whatever information the minister can give us with respect to these two documents.


James Lorimer Ilsley: After I made the statement in the house I found that the United States ambassador had delivered to the Department of External Affairs a United States publication embodying the trade conference proposals. That is a United States publication, and I am informed that there is doubt as to the propriety of tabling it. But this is being printed by the king's printer, and the other agreements are also being printed, and I was informed yesterday by an official of the Department of External Affairs that they expect to have them in a position for tabling on Monday. That is, everything will be tabled on Monday. The only thing I could do at the moment would be to lay one copy of the United States publication on the table, and I

Bretton Woods Agreements
doubt the propriety of doing that. I could do this to-day: I could get copies of that printed United States document and send them to the leaders of the various parties.


John Bracken: Personally I should like to have that, and as soon as the other information can be laid on the table I am sure it will be appreciated.


James Lorimer Ilsley: Yes.



BRETTON WOODS AGREEMENTS


[Stage Direction]
The house resumed, from Friday, December 7, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that the house go into committee to consider the following resolution:
That it is expedient to present a measure to grant authority to accept on behalf of Canada and to carry out the obligations of Canada under the articles of agreement for an international monetary fund and an international bank for reconstruction and development prepared by the united nations monetary and financial conference held at Bretton Woods in July, 1944; to authorize the payment of the subscriptions required from Canada out of unappropriated moneys in the consolidated revenue fund to an amount not exceeding seven hundred million dollars; and to authorize the borrowing under the provisions of the Consolidated Revenue and Audit Act, 1931, of sums not exceeding seven hundred million dollars.
Mr. SOLON E. LOW (Peace River): Before I resume what I was in the process of saying about this matter last night, I should like to make one comment which I think should be considered by every member of this house. The Minister of Finance has stressed the objectives in the Bretton Woods plan. I quite appreciate that these objectives are worthy, and perhaps every member of the house will share that appreciation, but I want it definitely understood that we are concerned about the means by which the objectives are attained, and properly so. It is all very well to say that the best way to cure a headache is to cut off the patient's head, but we are opposed to cutting off the patient's head, and that is exactly the reason why we are trying to direct the attention of hon. members and of the people of the country to the means involved in bringing about the objectives that have been so admirably set out by the Minister of Finance.
When the debate was adjourned last night I was bringing before hon. members evidence of the industrial and economic unbalance between the United States and the rest of the world. I pointed out some statistical sum-47696-198J
maries that were published in the Fortnightly Review by Mr. R. P. Schwartz, an eminent authority on these matters. He concluded his statistical summary in connection with the matter of unbalances and the terrific economic industrial preponderance of the United States, in a world of smaller economies, by making this statement:
Upon the disappearance of this industrial and economic unbalance as between the United States and the rest of the world depends the economic recovery of the world.
If anyone has any doubts left in his mind concerning this economic unbalance and concerning what my hon. friend the member for Lethbridge (Mr. Blackmore) said the other night, when he referred to the United States as a giant among pygmies, as a Gulliver among the Lilliputians, when he said that this Gulliver, this tremendous giant in the world of economic and industrial affairs, would have to be very careful how he moved his foot lest some of the pygmies be crushed inadvertently, let me refer briefly to some further evidence of this great economic and industrial preponderance of the United States of America.
I have in my hand a treatise "America Conquers Britain", by Ludwell Denny, an eminent authority, and I suggest that the hon. member for Melfort (Mr. Wright), particularly, pay attention to what this author says. The hon. gentleman last night called me crazy when I said that the United Kingdom came cap in hand to the United States last September in her efforts to get assistance for post-war rehabilitation in that country. I suggest therefore that the hon. member read what Mr. Denny has to say and get the evidence which he presents in this book, "America Conquers Britain". If he does he will find out whether I was crazy. I suggest that to the hon. member for Melfort, who apparently is still living in the same fog that clouded his vision and understanding at the time that Britain needed our help in Canada during the early days of this war. I will quote briefly some of the things that Mr. Denny brings out.
I have heard members of the party to which the member for Melfort belongs decry, and rightly so, the grasp which the United States industrialists are securing in other countries. I have heard them mention, and rightly so, International Nickel, and many other things which United States industrial power is doing in our own country, Canada, and of the great control that they exercise over the Canadian economy. I want it definitely understood that the process of industrial conquest has been going on for many years in Britain and other countries until the
Bretton Woods Agreements
[Stage Direction]
United States economic and industrial power has conquered Britain and many other parts of the empire with it.
Mr. Denny points out that in the United States during the boom period prior to 1929 the financiers were busy effecting great company mergers. He records that more than 1,000 public utility company mergers took place in the United States in 1926. In the period from 1927 to 1929 there were fifty bank mergers in New York alone, "creating an ever larger concentration of capital for domestic and foreign use," and he mentions that the National City bank had 98 branches in 26 foreign countries. What does that mean? From 1925 to 1928 United States loans to foreign countries averaged $1,100 million a year. Seventeen American corporations operating in foreign countries floated bond and stock issues in 1928 totalling $147 million. For what purpose? What would they be doing with this huge mobilization of the American public's money.
Mr. Denny supplies innumerable instances of what they are doing with it, of which the following are good examples. In 1929 General Motors of the United States bought the controlling interest in the Opel Motors of Germany. By March, 1929 American General Electric had bought sixty per cent of the stock of British General Electric, a controlling interest. Early in 1929 the leading electrical manufacturing concern in Britain, namely British Thompson Houston, Metropolitan Vicars, Edison, Swan, and Ferguson Pailin, were fused into the Associated Electrical Industries in which the principal shareholder was American General Electric.
I should like the member for Rosthern particularly to hear what I am saying because this should be impressed upon his mind after the demonstration he gave in this house last night.
Mr. MacNICOL:: Exhibition would be a better word, would it not?


Mr. LOW:: I suppose exhibition would be appropriate. In 1928 Electric Bond and Share, subsidiary of American General Electric, more than doubled its investments-from $108 million to $285 million-in Britain through these and other concerns. General Electric is said to control fifty-two per cent of the United States total power production. The Bond and Share Subsidiary controls public utilities of eleven foreign countries and has large holdings in six other foreign countries.
Another point that Mr. Denny brings out forcibly is this. In Italy American General Electric is said to have large holdings in Italian Super Power, which is making that

country independent of British coal and has undoubtedly brought about a deterioration in the coal trade from Britain, which has brought her almost to her knees. American General Electric further interlocks with Radio Corporation of America, which in its turn is a huge trust with world-wide domination over wireless, the greatest means of mass communication in the entire world; and further, British Marconi Company is now tied up with Radio Corporation, of which I have just spoken. In 1929 American Power and Light Corporation brought up the entire common stock of greater London Counties Trust, a trust controlling seven of the chief power companies of Britain and supplying power on a monopoly basis to ninety-five cities in England and Scotland. It also controls Edmundson Electrical Corporation owning a number of electrical supply companies in Britain. A British government inquiry was made into this United States ownership of the motive power of British industry but it lamely reported that the ownership was unimportant. The late Lord Birkenhead was set up as a representative of the United States owners.
I could go on and enumerate hundreds of cases brought to light by Ludwell Denny showing and proving conclusively the almost complete conquest of Britain and the British commonwealth by United States industry.
Just at this point I should like to emphasize for the benefit of the hon. member for Ros-thern and the hon. member for Melfort that when we speak of Britain coming to the United States with cap in hand, when we speak of the tremendous preponderance of United States industry and productive capacity, we are not attacking Mr. Roosevelt, the late revered president of the United States. No one in this group has ever done so. I think the hon. member for Rosthern could have saved himself the wear and tear of his outburst last night in that connection. What we have tried to emphasize is that the preponderance of the United States in world industry and production has made it absolutely necessary that something be done to remove the unbalances, otherwise inadvertently they may cause the destruction of lesser countries of the world, I would remind the hon. member that when he speaks of Mr. Roosevelt as being a friend of Canada, I agree that he was. He was also a revered friend of Great Britain. But I should like to ask the hon. member for Rosthern, or anybody else for that matter, whether he thinks it would have been humanly possible for President Roosevelt, with all the multitudinous affairs of state that he had to look after, to go deeply into the implications of Bretton Woods and know all of them.

_______________Bretton Woods Agreements
I suggest that that would be foolish. President Roosevelt had to depend upon his advisers. I would like to know who those advisers were. I would like to know if Bernard Baruch was one. I know Morgenthau was one and there were several others. I suggest that those men were certainly looking after the welfare of the United States.
In that connection I am going to quote for the benefit of the hon. member for Rosthern what Mr. Morgenthau said at the Bretton M oods conference. I am quoting from the united nations monetary and financial conference Final Act, and related documents where Mr. Baruch is quoted on page 8. I suppose the hon. member for Rosthern was there and he probably heard him say this:
The American delegation, which I have had the honour of leading, has at all times been conscious of its primary obligation-the protection of American interests.
I suggest that the United States delegation have always had foremost in their minds the protection of United States interests. No one denies that they have been mighty hard bargainers in the past and they have not yet got over that mental complex by any means. That is the reason why this thing must be subjected to the most careful scrutiny to see to it that our interests have been carefully looked after. One question which I think ought to be answered in this house is whether the Canadian delegation amply and completely looked after Canadian interests.
I should like to know also whether the Bretton Woods agreements have any provision for reducing the preponderance of the United States in the industrial and productive fields to bearable proportions by ending existing economic inequalities between nations, which in the long run must of necessity produce not only adverse political reactions but adverse economic reactions throughout the world.


Mr. TUCKER:: That is the basic idea underlying the whole agreement. When my hon. friend talks like that it makes me think that he has not studied the agreement at all.


Solon Earl Low: The hon. member for Rosthern will have plenty of opportunity to present his evidence. I make the suggestion right now that he be ready to present that evidence in committee.


Walter Adam Tucker: It is in the agreement itself.


Solon Earl Low: I do not want him to do this from any hidden conception he may have in his own mind, but from the Final Act itself.
Does Bretton Woods provide and ensure that the United States will buy enough and can buy enough from its customers to give them regularly that supply of dollars which they require for their purchases from the United States? Upon a satifsactory answer to that question will depend whether I can support the measure. If the hon. member can show that it does, then fine.
Let me examine for just a moment the United States employment prospects, which reveal some very significant things. Competent authorities in the United States expect a very large unemployment problem by 1946 unless something adequate is done to prevent it. The Falk Foundation and other investigations carried on in the United States indicate that they expect unemployment to reach as high as 20,000,000 unless some very effective means are taken to provide relief. I suggest that if the United States is to avoid mass unemployment a far greater total of goods and services will have to be produced and consumed by Americans than ever before in peace time. Mr. Vinson, the new secretary of the treasury of the United States, recently described this-he shows by his statement that he understands the situation-as "the pleasant predicament of having to learn to live fifty per cent better than ever before." That must mean that he understands at least one great problem that has to be resolved before Bretton Woods can possibly be made to work.
The problem I say is one of matching expenditures to potential production. I suggest that it is not an insoluble problem, but it does require new vision and a new type of thinking. I have been much interested in some of the figures that have been given with respect to the prospects of full employment in the United States and also their great productive capacity. I should like to quote some figures which were recently published by the department of commerce with respect to the gross national product of the United States.
I find that in 1929, this gross national product measured in terms of market prices total $99-4 billion; by 1944 that had risen to $198-7 billion. It had almost doubled. In other words, the United States is producing to-day nearly twice as much goods and services as she did in any time of peace.
The explanation is not far to seek; it simply must be that there were unexpected and unexplained margins of employment where they could have put men to work and where in many instances they could have doubled the capacity of existing factories and industrial concerns. I am convinced that if the United States is to avoid unemployment, far larger
Bretton Woods Agreements

totals of goods and services will have to be produced and consumed in America than ever before in peace time.
What was their consumption in peace time? In 1929 the total consumption of gross national product in the three fields of ordinary consumption, government consumption and capital consumption was only $87-7 biEion. That was at the peak of the pre-war years. The consumption in 1944, which included war consumption, had risen to $171-2 billion. These recent surveys indicate that if the United States is to solve the unemployment problem that will face her as she goes into peace time she will have to keep up her gross national production to approximately $170 billion.
That poses a problem. It means that if the United States is going to keep her people busy, is going to give them what she pleases to call full employment-and I understand she is determined to do that-she will have to train her people to consume at least 50 per cent more goods and services within the country than they have ever consumed in any previous year. It means that the United States of America will have to find means of distributing equitably among its people purchasing power or consumer demand to enable them to consume those vast extra quantities of goods and services. Further, they will have to change a good many of their habits in some parts of the country to be able to do that, and this poses a problem that will have to be tackled before Bretton Woods can even start on the road to success.
In addition, even if the United States of America maintain a yearly gross national production of the S170 billion required to take care of the employment situation, and even if they train their people and make it possible through the distribution of effective consumer demand for their people to consume 50 per cent more than they have done in any year previously, there will still be left a great volume of goods, estimated variously at from four to seven billion dollars, that will have to go into the export market. If they do not make effective demand available to all the people of the United States and thus help to increase their internal consumption, it follows that a far larger total of the gross national production of the United States will be dumped into international trade channels, and when that happens in quantities greater than ever before, I suggest that it will bring about a very difficult problem in world affairs. I say that the solution of that problem cannot be found anywhere in Bretton Woods. I ask you,

Mr. Speaker, and through you the hon. members who are sponsoring this measure, what provision Bretton Woods is making to see to it that the people of the United States will receive internally, sufficient effective consumer demand to enable them to consume 50 per cent more per year than they ever consumed in their lives before. I suggest that there is nothing in Bretton Woods which indicates any attempt to make that possible.
In a lesser degree Canada is in the same position as is the United States. Canada, if it wishes to maintain fuU employment from now on, will have to increase the gross national production and the gross national consumption. The only way that can be done is to find some means of distributing effective consumer demand in this country to the people who need it so that Canadians can consume. Otherwise all this talk of adjusting trade on a multilateral basis is just so much quibble. If I can be assured that Bretton Woods provides some means whereby the United States can consume within that country most of the goods she produces, or if it provides that the great exportable surplus that must be available if they put their men to work, may be given away or put into the hands of the peoples of the more unforunate countries of the world without piling up against them unpayable burdens of debt, I will support it.
Much has been said about gold and the gold standard. I am not certain in my own mind what kind of gold standard this might introduce. But it does seem queer that concurrently with the drive to get Bretton Woods adopted by the house and by the government, there has been a protracted programme of propaganda on the part of K. V. Gamble Company in Toronto to show that a gold standard is necessary. That may be just accident; I do not know. Here are some of the headlines: "Gold is the Balance Wheel of International Trade"-"That Off The Gold Standard Urge"-"A Herculean Task Requires Herculean Methods"-"The Old Lady Goes to Work," and so on. Of course, it may be just accident that these pamphlets appear just at this time; I do not know.
There are five points in connection with the gold standard which I should like hon. members to consider. The five points follow: Whether Bretton Woods means the introduction of a gold standard similar to the one of 1925 or 1914 I do not know, but the fact remains that:

Bretton Woods Agreements
i(l) Under the old gold standard the value of sterling was legally fixed in terms of a given weight of gold. This will be precisely the same under the new gold standard.
(2)	Under the old gold standard our monetary authorities were under the obligation to buy and sell gold freely at a fixed buying and selling price.
This will be the same under the new gold standard, with the difference that gold will not be available for internal hoarding.
(3)	Under the old gold standard sterling was allowed to fluctuate within a range of about one per cent. Under the new gold standard its range of fluctuations has been rigidly fixed at one per cent.
(4)	Under the old gold standard there was no .limit for the fluctuation of the price of sterling for future delivery. In this respect the new gold standard is much more rigid, for under it a limit will be set also to the fluctuations of "forward" sterling.
(5)	Under the old gold standard it was possible for this country to suspend the system or to devalue sterling to any extent by simple government decision, subject .to confirmation by parliament, without having to ask for the permission of any outside body, indeed, without having to consult anybody about it.
Under the new gold standard, on the other hand, it will be necessary to obtain the permission of an international board, on which our trade rivals will control the majority vote for any devaluation in excess of 10 per cent.
These are not my opinions; they are the opinions of an expert. The five points I have just quoted are the opinion of Professor Paul Einzig.
May I assure the minister in conclusion that I am prepared to support what he has asked. No further speakers from this group will take part in the debate at this stage, but I should like the assurance on a matter of such import-* ance as this not only that it will be given ample consideration by the banking and com-eeree committee but that we shall be given the opportunity for full debate also in this house in committee of the whole when the measure comes back from the committee.


James Lorimer Ilsley: Yes.


Mr. IRVINE:: With your permission, Mr. Speaker, and the permission of the hon. gentleman who has just taken his seat (Mr. Low) I should like to ask him a question, not in any spirit of opposition, because I agree with a great deal of the data which he has placed before the house and which I think is not open to question. But I think there is a point of difference between my hon. friend and myself in the matter of philosophy. I think he has come a long way tc.ward my views, and I want to make sure whether I am right. The hon. gentleman made much in his argument of the ownership of industrial control by the United States of America, and made special reference to the ownership by the Americans of a large proportion of the electric power available in Great Britain. My understanding of his philosophy is that he takes the position that in Canada it does not matter who owns anything so long as those who do own it produce, that so long as we get the goods it does not matter who owns anything. If it does not matter who owns anything in Canada, by what reasoning, I would ask, does he arrive at the conclusion that it makes any difference who owns anything in the other nations of the world?


Solon Earl Low: It ought to be obvious to the hon. member that in the international sphere the ownership can create these unfavourable trade balances which Bretton Woods is supposed to be ready to cure. But internally, that is nationally, I would say that the government of this country ought to be in a position to provide the capital to buy out international cartels and combines, and afterwards sell them into the hands of private ownership, to see that they are properly run.


Major James William Coldwell: That is socialism.


Solon Earl Low: No.


Major James William Coldwell: Social ownership.


Mr. JOHNSTON:: You did not get the last part of the sentence: "in the hands of private ownership", he said.


Mr. MACDONNELL (Muskoka-Ontario):: I was paired with the hon. member for Labelle (Mr. Lalonde). Had I voted, I would have voted for the resolution.


Mr. HAOKETT:: I was paired with the Minister of National Defence (Mr. Abbott). Had I voted, I would have voted for the resolution.


Mr. MacNAUGHT:: I was paired with the hon. member for Elgin (Mr. Coyle). Had I voted, I would have voted for the resolution.


Mr. BOUCHER:: I was paired with the hon. member for Simcoe East (Mr. Robinson). I do not know how he would have voted, therefore I did not vote.


Mr. HARRIS (Danforth):: I was paired with the hon. member for Waterloo North (Mr. Breithaupt). Had I voted, I would have voted against the resolution.
Motion agreed to and the house went into committee, Mr. Macdonald, (Brantford City) in the chair.


Mr. QUELCH:: When I spoke on December 6, the Finance Minister asked me the following question at the conclusion of my remarks:
What is the authority for the hon. member's statement that the United States forced a promise from Mr. Winston Churchill that he would lead the United Kingdom back to a gold standard satisfactory to the United States?
I replied:
I explained at the outset what my authority was. I was giving it for what it is worth. The pamphlet was signed by Mr. Eric Troward, president of the liberator council, and it is headed:
This memorandum has been specially prepared for the benefit of new members of parliament, many of whom have not had the opportunity of studying the trend of international financial development during the past two years.
In regard to the liberator council, I would just like to point out that the chief adviser is Sir Charles Morgan-Webb, late chief secretary of the Burma government, who is a world authority on gold and the sterling group. So it is not a pamphlet that can be dismissed lightly. I do not think a man like Sir Charles Morgan-Webb would have anything to do with an organization distributing .a pamphlet making that charge unless there was some proof of it.
Mr. Usley:	My hon. friend is basing its
authenticity upon the alleged standing of the adviser to this liberator council. As to who the gentleman is who made the statement, I do not know. I just want to say that I do not believe the statement.
Mr. Quelch:	The minister will agree that the
fact that Britain has agreed to Bretton Woods is pretty good backing for that statement.
Mr. Ilsley:	No, I do not believe that the
dominions of the British empire are joining in this treachery to themselves. I think that is ridiculous.
I wrant to deal for a few minutes with the two points raised by the minister in this question. I should like to take the last statement first, in which the minister said he did not believe the dominions of the British empire were joining in this treachery to themselves, that it was ridiculous. Just to make sure there is no misunderstanding of what I might mean by the term "treachery" I should like to give the definition from Webster's dictionary, which says it is a violation of faith and confidence, or perfidious action, and of course I was referring to it in that sense. I believe I can justify my stand in that regard. I am not suggesting for one moment that the people of the dominions are betraying themselves, but what I do suggest is that the governments, under the advice of certain experts, are taking action that will be highly detrimental to the

Bretton Woods Agreements
countries concerned, and to that extent will unquestionably be a breach of the confidence they have from the people. As to who advises the experts of course I am not in a position to say. I think the committee would be very glad if the minister would explain exactly how this whole thing originated. Who was responsible for this? Did it come from the government in the first place, or did it come as a recommendation from some other body? I understand that the government participated in certain agreements at London and Washington to set up some form of monetary stabilization, and some time ago I asked what were the terms of reference upon which our experts worked. Did they go there with a completely free hand to agree to an international standard based upon gold, or was it recommended that they advocate a multilateral system of trade using the national currencies of the countries based upon index price levels rather than in terms of gold? I believe later on the minister should explain that point; I have asked the question before, but up to the present have not been able to obtain an answer.
I think the minister will agree that in the past there has been every reason why, not only in this country but in every country in the world, we should have a good deal of misgiving in regard to the actions or recommendations of so-called experts. I am going to give the minister two or three notable examples of what I am referring to. First of all I should like to mention the statement in Mr. Churchill's speech in 1932, when he said:
When I was moved by many .arguments and forces in 1925 to return to the gold standard I was assured by the highest experts, and our experts are men of great ability and of indisputable integrity and sincerity-
Then some one said, "And they are always wrong." Mr. Churchill went on:
The hon. member is not always right-that we were anchoring ourselves to reality and stability; and I accepted their advice.
What did he find?
I take for myself and my colleagues of other days whatever degree of blame and burden there may be for having accepted their advice.
He takes responsibility for having accepted the advice and goes on to say:
But what has happened? We have had no reality, no stability. The price of gold has risen since then by more than seventy per cent. That is as if a twelve-inch foot rule had suddenly been stretched to nineteen or twenty inches; as if the pound avoirdupois had suddenly become twenty-three or twenty-four ounces instead of-how much is it?-sixteen.
I need not put more of that statement on record. I quote it to show that Mr. Churchill
took the advice of men supposed to be real experts, and the advice proved to be faulty. Then I recall the actions of one man of world renown, the former governor of the Bank of England, Montagu Norman. I have not his statement here, but I have quoted it in the house before and I will just repeat it from memory. I took it from the British Hansard in 1939. He stated that he had made loans to Germany and said, "We may never get those loans back, but it would be better to lose that money than to see the fall of nazism." Imagine the head of the Bank of England, one of the chief advisers on monetary affairs, saying they had made loans of money to Germany and might never get the money back but it would be better to lose it than to see the fall of nazism! Was that sound advice? Would not the minister consider that was unquestionably treachery to the nation? I do not say that at the time Montagu Norman made that statement he intended to commit an act of treachery or to betray England. He may have held that there were other dangers and therefore it was better to build up Germany as a bulwark, but in view of what happened later I think everyone will agree that his action rebounded against Britain, because within a short time we had to defend ourselves against Germany.


James Lorimer Ilsley: Could we not shorten this discussion by my admission that experts are sometimes wrong, and by my hon. friend's admission that they are sometimes right?


Victor Quelch: I do not need the second part of that statement, but I am very glad to hear the minister make that admission,, and I hope he will impress that fact upon the hon. member for Rosthern, who on two occasions in this house has told us what a marvellous man Keynes is, and that as far as he is concerned if Keynes has said this is not the gold standard he is prepared to accept it.


Walter Adam Tucker: I think Keynes is one of the outstanding economists in the world today, and is so regarded by other economists.


Victor Quelch: Yes, and so were these other experts whose advice Churchill took in 1925.


Walter Adam Tucker: He did not take that advice from Keynes.


Victor Quelch: Norman was supposed to be an outstanding expert. In reference to Keynes I believe the hon. member was in the house when the then hon. member for Vancouver-Burrard quoted a statement by Keynes; and we all remember the reply given at that time by Mr. Dunning. I do not have it here, but you will remember he said in
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effect: Why should we be asked to accept the word of Maynard Keynes? He has gone back on all his former convictions.


Walter Adam Tucker: As the hon. member knows, I did not happen to agree with Mr. Dunning in that attitude.


An hon. MEMBER:: Who has the floor?


Victor Quelch: Let him talk; probably I would not have thought of that if the hon. member had not been talking. However, the Minister of Finance has given in rather easily on this point, and I am glad to have his admission in regard to the experts.


James Lorimer Ilsley: I should like to have yours.


Victor Quelch: We will give you ours before we are through; we have given our views before, but in view of the fact that undoubtedly this bill will eventually reach the banking committee I think perhaps it would be better for us to wait until it is there before we do give our views. In the meantime we have many questions to ask, for the simple reason that we should like to have a statement from the minister before we are asked to give our views on the matter. After all, this is his responsibility. He has accepted the advice of these people, and he must be prepared to back up the action he has taken. Therefore we want to see whether his replies correspond with those of the experts.
Perhaps I should say a further word in regard to the statement made just now by the minister that the experts are not always right. Let me remind him of what happened in this country. The minister, said we could give our advice, too. Well, we did give our advice in 1936 and 1939, and events proved that our advice was right and that the advice given by the experts was totally wrong. Let us remember what happened back in 1932, when Germany and Japan started to rearm. Russia was arming also, because she knew that eventually she would have to defend herself against Germany and Japan, but what did the British empire do? It took the advice of experts and imposed a deflationary policy. It cut down employment, increased unemployment, put people on relief, and as a result when war came thousands of men had to be discharged because of malnutrition. Was that just an accident? When our potential enemies were all rearming, was it simply an accident that we imposed a deflationary policy and deliberately sabotaged the resources of the empire? I cannot believe it was entirely accidental. I think there was something definitely sinister behind that procedure.


Mr. BLACKMORE:: Sinister is right.


Victor Quelch: I am not suggesting that the experts in the department were responsible, but I believe that there are experts from whom they obtained further advice.


John Horne Blackmore: Or instructions.


Victor Quelch: I recall that some time ago I asked that certain correspondence between the Bank of Canada and the Bank of England be tabled and I was told that it would not be in the interests of the dominion to table it. It was probably not in the interests of the banks to table that correspondence, but it might have been in the interests of Canada to have it brought down. I recall when talking about reconstruction once I pointed out that we were definitely paving the way for the restoration of gold and the Minister of Veterans Affairs (Mr. Mackenzie) rose in his place and said no. Is he prepared to say that to-day?


Mr. MACKENZIE:: Yes.


Victor Quelch: Does he say that we are not going to establish currency at the par value of gold?


Ian Alistair Mackenzie: Which gold standard is my hon. friend referring to-gold exchange or gold reserve?


Victor Quelch: I am not referring to 1914 or 1925. I am referring to the fact that article IV, section 1, states that the par value of the currency of each member shall be expressed in terms of gold as the common denominator, or in terms of the United States dollar, and so on. As one hon. member said the other night, that is not the standard that he wishes to go back to; the gold standard for him is the turkey standard that he established in depression years. The member for Rosthern (Mr. Tucker) eulogized at some length the work of the experts at Bretton Woods. I do not doubt that there were very capable men there. The hon. gentleman said that he had seen them in action. Apparently the jargon of the experts rather hypnotized him, and after listening to that jargon he became very greatly impressed. I can quite understand that when some experts get going the effect is hypnotic. I was not on the banking committee last year because I was serving on the committee on reconstruction, but I remember going one day to one of the meetings of the banking committee and there I saw in action a gentleman by the name of Tompkins, I believe. I do not know his exact name. Well, he was a wow. Acrobats on the stage had nothing on him. I had seen acrobats on the stage tie themselves into knots, but the3r were always able to get out of their

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difficulties. They could untie themselves. This gentleman, however, kept tying himself into a tighter and tighter knot and he was never able to get out of it. I am satisfied that if he had been asked' to give a definition of a straight line, instead of defining it as the shortest distance between two points, he would have defined every other sort of line he could think of and in the end would have failed to define a straight line. Everyone who was on that committee will, I believe, agree with that statement. I think the Minister of Finance will agree that the statements made by that expert were about as confusing as they could possibly be. Every time he made a statement it took an hour or two for the members of the committee to understand what he was driving at. That is all I have to say about *experts.
Now I should like to say a few words about the Liberator Council. I am not blaming the minister for being sceptical. Perhaps he has never heard of this council but in view of the fact that it is a body of men who have been doing excellent work in England, working in close cooperation with the Economic Reform Club, I suggest that no one should dismiss their views lightly. I have already mentioned Sir Charles Morgan-Webb. Perhaps I might give the names of the five men comprising the council: Sir Geoffrey Bracken, Mr. William Brown, Mr. G. H. Stock, Sir. Charles Morgan-Webb and Mr. Eric Troward. They have put up a fight against Bretton Woods from the start. They organized meetings all across England and some time ago organized a large meeting known as the Bayswater conference at which Mr. Craven Ellis, M.P. and Mr. Stokes, M.P., participated in the debate. At that meeting they discussed four alternatives: The Twentieth Century economic plan of the London Chamber of Commerce; the Volens System, the McCarron Plan and the Liberator system. I have read all these, but the only one I have tried to understand is the London Chamber of Commerce plan, because I find it easier to follow. At the meeting in the evening session there were *over 350 persons present, with 44 diplomatic and consular representatives. There were 28 nations represented altogether, so that the minister will agree that it was no fly-by-night concern but a reputable organization doing a great deal of very valuable work.
And now I should like to say a few words on the gold standard. Article IV, section 1, provides that the par value of the currency of each member shall be expressed in terms of gold as a common denominator, or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944. Section 3 *states that the maximum and minimum rates
for exchange transactions between the currencies of members taking place within their territories shall not differ from parity, in the case of spot exchange transactions by more than one per cent, and in the case of other exchange transactions by a margin which exceeds for spot exchange transactions by more than the fund considers reasonable. It is also provided that there shall be a change in par value of members' currency up to ten per cent without any need of consulting the fund, but if a nation goes beyond that, the fund must be consulted. I was interested to know what the orthodox definition of gold standard would be, and I looked up the Encyclopedia Britannica and I found that a nation's money, paper bills and silver coins, when that nation is on the gold standard, are redeemable at a fixed weight of fine gold for each monetary unit. One might say that is not true in all essentials of the Bretton Woods agreement.


James Lorimer Ilsley: Not in any essential. Why does my hon. friend crawl out and say not in all essentials?


Victor Quelch: Let me finish my sentence. The main point is that the results of the operation of the system will have very much the same effect as the gold standard, for this reason. Under the automatic clause of the gold standard in the old days if a nation had an unfavourable balance of trade, gold went out of the country, with the result that there was a credit restriction and the price level fell, and then as a result of the fall in price level, which was supposed to encourage other nations to buy their goods, the price level in other countries went up and after a while nations stopped buying their goods, with the result that they had an unbalance of trade. It was supposed to act as an automatic regulator. But what happened if a nation was not willing to reduce its price level? It might have been all right in olden days to tell a nation that if it did not have gold it would have to reduce its price level no matter how great its powers of production might be. That was all right then, but people are not quite so foolish as to believe that argument any more. Mr. T. E. Gregory, in his book "The Gold Standard and its Future," points out what happens, and I quote from page 32:
Thirdly, the world economic structure has become rigid to an unprecedented degree. Owing to the much greater pressure which organized business and labour interests can bring to bear on government, there has been a general advocacy of "stability" which has an practice meant that particular groups could stabilize their own position without any, or enough, attention having been paid to the result of such stabilizing .action on other parts of the economic field or to the long period results of such action. Raw material producers have been allowed, with
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the aid of governmental or quasi-governmental assistance, to "stabilize" the prices of particular raw materials, without regard to the fact that consumption might thereby be discouraged and production encouraged. In industry and distribution there has been a growth of large-scale organizations which have not always been willing to adjust prices to the trend of the market, thus adding in the end to the losses which had to be suffered on stocks when liquidation finally became necessary. In the sphere of labour there has been in certain countries a development of unemployment insurance schemes or similar relief measures which have prevented wage rates from falling, whilst in others public opinion, reinforced by government propaganda, has had very much the same effect. In a word, there have been tendencies at work in many countries preventing a rapid adjustment of the level of money incomes to changes in the general economic situation.
When people refuse to allow prices to fall then the gold standard is no longer able to operate automatically. If a nation continues to have an unfavourable balance of trade, the only alternative is to borrow money or to obtain gold. It can use the gold it has on hand, but if it does not have gold it will have to go further into debt. What is the effect under this agreement? If a nation has an unfavourable balance of trade it can borrow and go into debt. It can draw on its quota but when that is exceeded by 200 per cent it has reached the limit and it cannot borrow any further. It would not have any gold and the result is that in all probability it would cease to use the fund.
Neither under the gold standard nor under the Bretton Woods agreement does the creditor nation accept any responsibility for helping to balance the trade between nations. After all, the only way in which a debtor nation can pay is with its own goods. All a debtor nation should have to do is to say to a creditor nation, "We owe you $100 million; we have placed to your credit in the bank $100 million; with that you can buy any goods we have." That is all that nation should be required to do. Unfortunately that has not been the case and the result is that nations have been forced into a state of unpayable debt.
I am quite aware that under the Bretton Woods agreements when a nation's currency becomes scarce, provision is made for the fund to buy that scarce currency with gold, but that does not ease the situation so far as the individual nations are concerned. The only way they will be able to get goods is by going into debt if they have no gold with which to buy currency. I will quote article VII which deals with this question.


Walter Adam Tucker: When the hon. member suggests that that is the only resort set up under this agreement, he is saying less than

what is correct. The fundamental basis of this organization is that if a currency becomes scarce then 'the country whose currency has become scarce will be advised by the officials of the fund that they must take steps to enable other countries to sell their goods in the country of the scarce currency, and they would advise that country that they must be prepared to correct that fundamental unbalance of trade. The whole basis of this agreement is designed to promote understanding between countries in order to permit balanced trade and the keeping up of high standards of living in all countries.


Victor Quelch: If the hon. member can show me any clause in the act that compels the creditor nation to do that, I shall be glad to see it. All it provides for is the rationing of scarce currency.


Walter Adam Tucker: Does the hon. member suggest that this international body should interfere with the sovereignty of this country and compel us to do something rather than just urge us to do it?


Victor Quelch: I am suggesting that as long as it has the power to take action against a debtor nation, it should have the same power to take action against a creditor nation.


James Lorimer Ilsley: It has no power to take any action against a debtor nation. No debtor nation has to buy currencies from this fund.


Victor Quelch: What is the purpose of the fund? To expand trade?


James Lorimer Ilsley: It is expected that they will, of course.


Victor Quelch: To expand trade on a multilateral basis. If a creditor nation refuses to buy goods in exchange for its exports, how is a debtor nation going to pay? You must make it possible for the weaker nations to be able to pay for their imports and exports, and yet this does not provide for that. All it does is to impose penalties on the debtor nations. Doctor Clark admitted in the committee that there is nothing in here to compel a creditor nation to buy goods.


James Lorimer Ilsley: What committee is that?


Victor Quelch: The reconstruction committee.


James Lorimer Ilsley: Is this another conversation the hon. member had with the deputy minister?


Victor Quelch: The minister will find it on the record.


James Lorimer Ilsley: I want to protest against the hon. gentleman talking about conversations

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that he had with the deputy minister in the corridors. I am not going to take the time to go back to the deputy minister to find out what was his recollection of the conversation. We had the hon. member for Wetaskiwin telling us last night that he could not break a confidence, that he could not tell us who his anonymous informant was about the ownership of gold in the United States. I want to say right now that I stand by what I said two or three years ago. I have given my authority as against the anonymous authority which the hon. gentleman has quoted. Yet the hon. member for Acadia stands up here and retails corridor conversations with one of my officials.


Victor Quelch: Wait a minute. The reference I made to the corridor conversation was not in any shape or form detrimental to Doctor Clark, and I am satisfied he would be quite prepared to have me repeat the statement.. In committee he was asked a question by Senator McGeer and he said he would study the London chamber of commerce proposals and give a report on them. Apparently lack of time made it impossible for him to do this and I merely asked him what his recollection was. He certainly did not tell me that he was speaking in confidence. He said he thought the proposals were quite good but the main difficulty was that several nations would not agree to them. I am quite sure that he would not object to my having repeated that statement. I asked what he thought of Russia, and he went on to say that he thought the country that would most strongly object to the proposals was the United States of America.
So far as the statement I am giving now is concerned, any member who was present in the reconstruction committee will recall the conversation with Doctor Clark. He said that he did not think we should impose, just as the hon. member for Rosthern is saying, conditions upon creditor nations.


Walter Adam Tucker: May I ask a question?


Victor Quelch: Let me finish with the
other question the hon. member asked. Section 8 of article V deals with the member nation which is unable to meet its obligations. Perhaps I had better read the whole section, otherwise I shall be charged with taking something out of its text. This section reads:
(c) The fund shall levy charges uniform for all members which shall be payable by any member on the average daily balances of its currency held by the fund in excess of its quota. These charges shall be .at the following rates:
(i)	On amounts not more than twenty-five per cent in excess of the quota: no charge for the first three months; one-half per cent per
annum for the next nine months; and thereafter an increase in the charge of one-half per cent for each subsequent year.
(ii)	On amounts more than twenty-five per cent and not more than fifty per cent in excess of the quota: an additional one-half per cent for the first year; and an additional one-half per cent for each subsequent year.
(iii)	On each .additional bracket of twenty-five per cent in excess of the quota: an additional one-half per cent for the first year; and an additional one-half per cent for each subsequent year.
(d) Whenever the fund's holdings of a member's currency are such that the charge applicable to any bracket foT any period has reached the rate of four per cent per annum, the fund and the member shall consider means by which the fund's holdings of the currency can be reduced. Thereafter, the charges shall rise in accordance with the provisions of (c) above until they reach five per cent and failing agreement, the fund may then impose such charges as it deems appropriate.
I suggest that that is a very severe penalty to impose on any debtor nation, to say that as you are not able to meet your obligations, the fund when your debt rises to a certain point can charge you any rate of interest it likes. If the members want me to do it I will read the whole of section 4.


Walter Adam Tucker: The whole purpose of that
section is to discourage a member from trying to finance a very heavy excess of imports over exports out of the fund. In other words the fund is to finance current transactions, not to finance capital expenditures. Its whole purpose is to discourage that very thing and to have it done by balancing trade.


Victor Quelch: How can you balance trade if one nation insists on exporting more than it imports? There is a mutual obligation.


Walter Adam Tucker: The very fact of the nations coming together and making this agreement presupposes their willingness to balance their exports and imports. That was the basic supposition on which they met.


Mr. JAQUES:: Where is all the gold?


James MacKerras Macdonnell: May I ask a question?


John Horne Blackmore: These members don't know shucks about this thing. Let them live and learn.


Victor Quelch: Let me proceed. I quoted from a statement made by Doctor Clark the other day showing what Canada aims to be. The member for Rosthern says that the whole idea behind Bretton Woods is the balancing of trade. Here is what Doctor Clark said in a speech that he made in New York:
We feel also that adequate arrangements .are essential to make possible a substantial volume of long-term international investment, and we
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trust that the technical and political difficulties involved in consummating these may soon be surmounted.
I agree that there is justification for investment on moral grounds, to help certain backward countries, but we knew how in days past there have been trade wars because nations tried to force their goods on other nations and then raised high tariffs to prevent those debtor nations from paying them with goods. The white paper on reconstruction which was issued last year by the Minister of Reconstruction stated that Canada in all probability would be a creditor nation. So apparently it is not expected that we are going to balance our trade but rather that we will maintain a favourable balance of trade and make loans through the international bank.


Walter Adam Tucker: These are loans to be made for reconstruction and development to enable a country to increase its productive power and raise its own standard of living so that it will be able to pay for its imports from other countries. They are productive loans.


John Horne Blackmore: Provided that it could sell the goods.


Victor Quelch: That is a lovely story, but I read how England had maintained her prosperity and that Mr. Reginald McKenna said that the reason England was prosperous for two centuries before 1914 was that she had been able to maintain a favourable balance of trade. The money paid for her goods exported abroad enabled her to maintain an effective demand for the goods retained internally. Owing to the fact that without exports there was no effective demand internally, Britain, in order to maintain full employment, found it necessary to export her surplus production abroad. Now the hon. member for Rosthern says that all we have to do is to make it possible for other nations to produce goods, and then there will be more prosperity. How are we going to export more abroad if we put other nations on a self-sustaining basis?


Walter Adam Tucker: Each nation will make the goods it can best produce. That is the basis of international trade.


Victor Quelch: Have we in the past been able to maintain an effective demand against our production? Has the United States? The United States to-day is looking for large export markets. Why did Doctor Clark consider that it was necessary to make adequate arrangements for long-term foreign investments? Because he knows that we in this country are not able to maintain an effective demand against our total production, and so long as

that condition obtains the only way in which we can maintain full employment is to export abroad a certain amount of our production in excess of our imports.


Walter Adam Tucker: Does not the hon. member admit that if we helped to set up China and develop her production and a high standard of living there, she could absorb all our export food products without any difficulty?


Victor Quelch: On the condition that we accept in return payment from China in manufactured goods; and if we have a deficiency in purchasing power in Canada to buy our total home production how are we going to be able to buy those imports from China? It has not been done in the past. We have argued, and this is the whole basis of our philosophy, that you have to maintain production at full capacity and then maintain an effective demand against that production, or against the production of other countries for which your own can be exchanged. But that has not been done in the past.


Walter Adam Tucker: The Bretton Woods proposals do not in any way interfere with the promotion of your doctrine within the country.


Solon Earl Low: Nor with any other doctrine that will distribute goods.


Victor Quelch: If the hon. member is really sincere in his argument-and I think he is, although I doubt the sincerity of some people behind Bretton Woods-if the idea behind it all is to bring about a balance of trade, then the creditor nations as a sign of their sincerity should be willing to have included a section such as that which is included in the London chamber of commerce proposals, and the same suggestion was made in the Keynes plan. He mentioned that there should be an obligation on the part of creditor nations to accept payment in goods. There is nothing in these proposals at all to compel a creditor nation to accept payment in goods. But there is provision in here to force a debtor nation to pay any rate of interest that the fund sees fit to charge, after the debtor nation has gone into debt by a certain amount and for a certain period of time.


James MacKerras Macdonnell: May I ask a question?


The CHAIRMAN:: If the hon. member who has the floor will permit a question it may be asked.


Victor Quelch: I have had a lot of questions asked me and now I should like first of all to ask the Minister of Finance a question. I think the Minister of Finance will agree

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with the soundness of the argument that there is a dual responsibility in regard to international trade, that it should be a two-way street. It should not merely be the purpose of international trade to dump our unemployment problem on the doorstep of some other nation. If we export goods we should be prepared to accept payment in imports; for that is the only way in which other nations can pay. Is the minister prepared then to say that there is an obligation to raise the purchasing power of the people of this country up to the point where they can buy the total production of Canada and the imports of other nations exchanged for our exports? If the minister will announce that as a policy for the future, and if the government will say to the industrial concerns throughout Canada that from now on they can expand their production to the full capacity, and will guarantee a market for their output, we shall have the greatest expansion the country has ever seen. And you would never need to worry about unemployment in the future, because you would put money into circulation so that the people could buy the goods which industry could produce


James Lorimer Ilsley: The government has repeatedly announced that it is its policy to encourage enterprise and develop full employment.


John Horne Blackmore: But how is it going to do it?
Mr. Q'UELCH: That does not answer the question at all. "Encourage"!


John Horne Blackmore: Will it give a dividend?


Victor Quelch: I am not now asking a question as to the dividend. All I am asking for is a clear-cut statement from the government that they recognize a joint responsibility, as between the creditor and the debtor nations, to balance trade; that they recognize that the only way in which that can be achieved is by a nation setting its own house in order so that it will be willing and ready to take an equal quantity of imports for its exports, and so that the people will be able to buy the total production of the country. Is the minister prepared to agree to that?


James Lorimer Ilsley: That is different from the last question.


Victor Quelch: No, it is the same thing. I put the questions slightly differently, but they are the same.


James Lorimer Ilsley: And it is not clear, either.


Victor Quelch: I will state it again.


James Lorimer Ilsley: Is my hon. friend asking that we recognize an obligation with respect to any particular country with which we are dealing, to take the same volume of imports that that country takes of exports from us? If so, we do not recognize that obligation at all. That is bilateralism, so-called.


Victor Quelch: I am not advocating bilateral trade. The minister must be familiar with the London chamber of commerce proposals. No doubt he has read them. I know that his department has studied them, because the deputy minister told me so. The London chamber of commerce proposals are a multilateral system. Money is not based on gold. It is tied to the price index level. Every country agrees to maintain its price level stable. Every country agrees to balance its trade and to maintain a stable rate of exchange between its currency and the currency of another nation. In view of the fact that a country agrees to maintain its price level stable, then when it buys any goods from another country, thereby obtaining that country's currency it knows that its money will buy a certain quantity of goods to-day and the same quantity a year hence. There is a definite undertaking to balance trade, and therefore any nation which over a period of seven years refuses to accept payment in goods has its credit wiped out. Then there is an international exchange established, and representatives of foreign exchange controls in every nation will sit on that exchange, exchanging their blocked credits for the blocked credits of other nations, and the nations will always know in which countries they have credits, so that they will endeavour to accept more imports from that nation. But it will be on a multilateral basis, because the representatives of the foreign exchange controls will be sitting on this exchange, trading the blocked credits. They will not have the power to change the value of a nation's currency. The exchange rate will be fixed in terms of the nation's price level, and gold will not enter into the question at all.


James Lorimer Ilsley: What is the question now? Is it changed?


Victor Quelch: The question is whether or not this government is prepared to guarantee to the industry of Canada that it will maintain the purchasing power of the people on a level which will make it possible for them to buy the total production of the country, and the production of other countries for which our own production may be exchanged.


James Lorimer Ilsley: That is a guarantee that the government will issue money to the people
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of Canada if they require it to buy all the goods they need from this country or other countries; is that it?


Victor Quelch: Not necessarily. Repeat that.


James Lorimer Ilsley: I don't know whether I can repeat it. My hon. friend can never repeat his questions in the same language.


Victor Quelch: I am putting it in another way-


James Lorimer Ilsley: I am wondering what sort of guarantee my hon. friend is asking me to make on behalf of the government. It sounded to me very much like this, that we would issue money


John Horne Blackmore: He did not mention "money".


James Lorimer Ilsley: Does it mean that? I think that is what it means, and I think if I said "yes", that is what he would say we were committed to.


Victor Quelch: That all depends. The government Would estimate the total production of the country. They would estimate the approximate amount of labour required to produce the goods the people needed. They would know how much labour was available for various national projects. They would place a fair price on agricultural products. They -would guarantee a minimum standard of living to all people; we will say, in the initial stages, SI,200 a year. They would, as the leader of this group stated, grant old age pensions at sixty years at $50 a month. They would make grants available to all people up to the age of twenty-one, or any age necessary to complete their training so long as these young people showed that they had the ability to continue their studies. Then they could watch the effect; and if they found that demand still lagged behind supply, say that over a period of six months they found that production was still going ahead of consumption, they could establish a discount, which would be nothing more than a sales tax in reverse, in order to bring about a balance. In other words, using figures, if the amount of goods available during a period was equal to $10 million and the demand against those goods equal to only $9 million, showing a lag of ten per cent, for the next period a ten per cent discount would be established to bring demand up to supply, that is to establish equation. That would cover your exports and imports. So far as the issuing of money is concerned, the issuance of money would be only to the extent to which taxa-
tion failed to meet government expenditures; in that event national money would be used. If taxation was sufficient it would not be done. But the government would not be trying to limit its expenditures to the amount of money it, could tax from the people's pockets.
On that basis the government talks a lot about "full employment", a lot about "a new social order". They talk about "encouraging" this or that. Is it not time we have a government which would guarantee that it could take certain definite steps in order to promote the full development of the resources of the country? I think the minister will agree that the only way you can maintain full development of the country's resources is to guarantee a full-time market. The minister will agree that industry cannot continue to produce unless it can sell the goods it produces. Is the minister prepared to say that the government will in the future underwrite an effective demand in Canada? If a government will not do it, nobody else will.


James Lorimer Ilsley: If the purport of the hon. gentleman's question is to commit the government to the detailed programme he outlined there, I say no. It is a long list of discounts and dividends and bonuses-


Victor Quelch: I never mentioned dividends.


James Lorimer Ilsley: -and so on. We cannot commit ourselves to that.


John Horne Blackmore: Then you are heading for chaos.


Victor Quelch: I am not asking the minister to commit himself to all this. The minister asked me what I suggest. I am giving him a suggestion. I am not tying him to details; the government can use any technique it likes. All we are interested in is results. The people are interested in seeing that their standard of living is maintained at the highest level that the production of the country can provide. What has happened in the past is that when effective demand fell, prices were not reduced to a level where people could buy the production, but second>-ary industries reduced their production in consequence of the inadequate buying power. Then what happened? Well, we know what happened from 1935 to 1939. All I am asking the minister is whether the government will, by any technique they choose, underwrite an effective demand against the production of the country. We are not indulging merely in negative criticism. At any time that we criticize the government we are prepared to put forward some alternative suggestion.

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Angus MacInnis: May I ask a question? I understand that my hon. friends of the Social Credit group are opposed to socialism and in favour of free enterprise. How would free enterprise operate within the policies which were outlined a moment ago by the hon. member for Acadia?


Victor Quelch: It is one o'clock, and there is no use in my starting off on another phase. I can go on if it is the wish that I should go on. But I have twenty or thirty questions which I want to ask, too.


Norman Jaques: I have several.


James Lorimer Ilsley: I think it is obvious that we cannot get this resolution out of committee to-day. I cannot be here this afternoon or to-night, for most excellent reasons, so we shall have to take this up on Monday and try to get to the end of it at some time or other. But it is the government's intention to see that these matters are brought to a vote this session, and, I may say, whether the session has to be prolonged beyond the expected date or not.
Progress reported.
At one o'clock the committee took recess.
The house resumed at three o'clock.

The house in committee of supply, Mr. Macdonald (Brantford City) in the chair.
pBPARTMENT OF AGRICULTURE
Production Service-Health of animals-
17.	Compensatiion for animals slaughtered, $372,620.


Joseph Henry Harris: Would the minister give us some idea of the incidence of hog cholera during the last year?


Mr. GARDINER:: There were no serious
outbreaks of hog cholera during last year. There was an outbreak in Manitoba. A number of hogs were slaughtered in Ontario during 1944-45 because of hog cholera. The figures are as follows: 1944-45. 494; 1943-44, 67; 1942-43, 3,415; 1941-42, 6,437. The figure was very much higher in 1940-41, 33,793. It will be noted that the tendency has been downwards.
Mr. HA.RRIS (Danforth):	In what part
of Ontario was the disease prevalent?


James Garfield Gardiner: I am not certain as
to the exact place, but I think the greater
part of it was in the southwestern section of Ontario. The figures for Manitoba are as follows: In 1942-43, 83; 1943-44, 330; in 1944-45, 1,753. It will be noted that there is an increase there rather than a decrease.


Mr. SENN:: Cattle prices have increased
materially during the past few years. Has the department given any consideration to changing the amounts that are paid to individuals whose cattle are slaughtered under the tuberculosis regulations? The amounts paid at the present time are comparatively small, something like $40 for a grade animal and around $100 for a pure bred animal. Has the department given any consideration to the matter, or does it intend to do anything about it?


James Garfield Gardiner: No, we have not done
anything about it. The amount has remained about the same over a period of about twenty years. Experience has shown that while the maximum amounts which may be paid have remained constant, the amount which the farmer receives for anything that he can market goes up with the increase in the price of the animal. When prices are high he is able to sell part of the animal which has been condemned at a much higher price than when prices are low. We have had arguments when the prices were low and high to the effect that the amounts should be changed, but we have maintained the level over about a twenty-year period, and at the moment we are not considering changing it.


Joseph Henry Harris: I was hopeful
that the department might take under advisement next session the matter of changing this compensation in view of the fact that prices are relatively high at the present time as compared with the twenty-year period of which the minister speaks. What is particularly running throuh my mind at the moment is the reference which was made by the hon. member for Lanark with regard to Bang's disease and tuberculosis contracted by humans from cattle. Compensation paid for these diseased cattle ought to be given some consideration so that we may clean up the unhealthy spots from which the disease emanates. If that were done it would benefit the general economy of Canada.


James Garfield Gardiner: I think the whole question with regard to whether we are going to pay for Bang's disease as well as tuberculosis should be considered along with the other question when it comes up. Probably this is a matter to which we might give some consideration in the future. The hon. member
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for Frontenac-Addington intimated to me that he was going to ask a question with regard to the testing of cattle for tuberculosis in the area immediately surrounding Kingston. I do not see him in his place at the moment, but I understand, from the records which I have looked up since he spoke to me, that the township of Pittsburgh, immediately outside of Kingston, is pronounced clear until April, 1946. I am not in a position to state whether immediately after April we can go on with testing, but it is high up in the list of counties and townships to be tested again just as early as possible.


Mark Cecil Senn: Are any new areas being tested at the moment for restricted areas?


James Garfield Gardiner: Those being tested for the first time are the districts of Algoma and Cochrane in Ontario, the district of Church-bridge and the municipality of Grant in Saskatchewan, being No. 372, and Camrose, No. 427 in Alberta. Thus it would appear that there are two in Ontario, two in Saskatchewan and one in Alberta which have been tested recently.


Mr. ROSS (Souris):: What are the prospects for enlarging this work in the near future? I understand that there has been a let-down during the war years. Several people want to organize now to carry on.


James Garfield Gardiner: Our main problem is staff. At the present time we are spending all the money on this that we have staff to make use of. We are hoping we shall have more staff as we get further beyond the war period. I know quite a number of men who were available at one time have been serving in other capacities during the war, and we may have them back. If so we can do more of this work.


Mr. McLURE:: I know the minister is anxious to get through his estimates, but the hon. member for Brant, who was called away to-day, had prepared an excellent address on the health of animals branch. If the minister should not get through all his estimates to-day would he allow the hon. member to reopen that subject later?


James Garfield Gardiner: My understanding is that the supplementaries have not yet been brought down, and there will almost certainly be an item in the supplementaries in regard to contagious diseases, on which he could bring up that matter.


Mr. FAIR:: A programme was in effect last year and perhaps before that of vaccination for the prevention of Bang's disease. What progress is being made in that regard?
tMr. Gardiner.]


James Garfield Gardiner: It is still being carried on in the same way as it was a year ago. Does the hon. member want the statistics in regard to it?


Robert Fair: I should just like to know whether it is proving successful.


James Garfield Gardiner: Yes, it is proving reasonably successful. The story told the other night by the hon. member for Lanark I think illustrated very well the usefulness of the method in tending to eradicate Bang's disease, and we are having much the same experience with it.


Mr. FRASER:: Has the department experimented with streptomycin for Bang's disease? If so, has it been indicated that this drug will cure Bang's disease as well as shipping fever?


Ian Alistair Mackenzie: I know a bit about this new and scarce drug, which is used in very rare diseases. It is in extremely short supply in Canada to-day. Only the other day I had a request from my own city of Vancouver for some of it, for someone who is ill there, and it is very difficult to obtain.


Gordon Knapman Fraser: Was that person suffering from undulant fever?


Ian Alistair Mackenzie: I could not say.


[Stage Direction]
Item agreed to.
Production service-
18.	Live stock and poultry, $762,925.
Mr. BLACK (Cumberland):: Can the minister give the committee a statement as to the policy of the department in respect to establishing a herd of beef cattle at the experimental farm at Nappan? This has been discussed in previous sessions, and if I remember correctly the minister expressed himself as favourable to the idea. Perhaps I should have brought this matter up under the appropriation for experimental farms, but I should think it might be discussed under this item also.


James Garfield Gardiner: It would have been much better, of course, if it had been brought up under the experimental farms vote, because unfortunately I have not the official here at the moment who is acquainted with that matter. As the hon. member knows, I did visit that farm a few years ago, and the question was brought up while I was there. We have not been making any material changes in the herds at the different farms during the war period; we have been carrying on much as we were. I am not aware that any particular advance has been made in that

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[DOT]direction at Nappan, but I am not sufficiently acquainted with the matter to say nothing has been done.


[Stage Direction]
Item agreed to.
Production service-
19.	Plant products-seeds, feeds, fertilizers, insecticides and fungicides control, including grant of $18,900 to Canadian Seed Growers Association, $601,294.
Mr. WRIGHT:: Can the minister give some indication of the supply situation with regard to clover seeds and other small seeds this year, and whether there will be any restrictions on the export of these seeds? Have we available more than we shall need in Canada? What is the situation?


James Garfield Gardiner: The supply of seeds this year is low as compared with other years. We are short of alsike and red clover; we have some alfalfa for export but nothing like what we have had in some previous years. The supply of seeds is down.


Percy Ellis Wright: Will there be restrictions on exports?


Robert Fair: I should like to ask about the supply of fertilizer, and whether any experiments have been conducted to find out whether artificial or chemical fertilizers have any detrimental effects on the land on which they are used. In my part of the country quite a lot of this fertilizer is being used and some people now have the idea that it is detrimental to the land. If it is, we should know something about it. If it is not, we shall be able to give the answer to some of these rumours.


James Garfield Gardiner: Canadian production of fertilizers, particularly nitrogen and phosphoric acid fertilizers, is still going on at full capacity of the plants, and as a result the united nations, through the combined food board, are obtaining hundreds of thousands of tons of ammonium sulphate, ammonium nitrate, ammonium phosphate and cyanimide for allocation to the many countries, particularly in liberated Europe, which require them for the production of food. That is, our production is sufficiently high to enable us to export considerable quantities of these fertilizers to countries that need them. The supply of fertilizers for Canadian use is allocated by the combined food and materials boards of the united nations. These boards have a fertilizer committee with headquarters at Washington, and the administrator is the Canadian representative on that committee. The boards have allocated to Canada sufficient fertilizers of the various kinds for the entire Canadian demand next spring, provided
that the demand does not again increase substantially. That is, they have provided for some increase, but if there is a great increase there may not be as much as is required. The consumption of fertilizers in Canada has increased from approximately 300,000 tons in 1940 to 650,000 tons in the calendar year 1945, or more than double. Despite this, however, we have been fortunate in obtaining an increased supply to meet the increased demand.
In reply to the other part of the question, my information is that in any of our experimental work it has not been found that these fertilizers do any particular harm. Probably the effectiveness of the fertilizer in producing results is somewhat dependent upon weather conditions.


Robert Fair: I realize that unless we have plenty of moisture one is further ahead to leave the fertilizer in the sack. If no experiments have been conducted so far, could that not be done, in order to find out if they have any detrimental effect?


Mr. HATFIELD:: Are any fertilizer chemicals being exported other than ammonium nitrate?


James Garfield Gardiner: In the statement I
have just made I said the Canadian production of fertilizers, particularly nitrogen and phosphoric acid fertilizers, is still going on at the full capacity of the plants, and as a result the united nations, through the combined food board, are obtaining hundreds of thousands of tons of ammonium sulphate, ammonium nitrate, ammonium phosphate and cyanimide for allocation to the many countries, particularly in liberated Europe, which require them for the production of food.


Percy Ellis Wright: Are export permits required for the export of clover seeds and other small seeds this year?


James Garfield Gardiner: Yes, they are required, and they are all being handled through the special products board.


Mark Cecil Senn: I should like to ask the minister a question or two in regard to this seed situation, which is a serious one. The account that was given yesterday of the deliberations of the dominion-provincial agricultural conference shows that the production of grass seeds, particularly alfalfa and red clover, has been very much lower this year than in former years. We do not want to be left in the position, particularly in eastern Canada, of running short of these seeds, because there will be a very heavy demand for them next spring. On previous occasions measures have had to be taken to see that enough was
Supply-Agriculture

retained in Canada to supply the needs of the eastern market. Alfalfa particularly is in short supply in Ontario. The farmers will need a great deal of it for seed and we shall have to depend to a great extent upon western production. The same is true of red clover, though not to the same extent. Are any measures being taken to see that a sufficient supply is being kept in the Canadian market? I would ask the minister to tell us whether the export board with headquarters at Lindsay has made any contracts for the shipment of seed overseas for the British authorities.


James Garfield Gardiner: At the conference which was held earlier in the week we suggested that there should be a material increase. From 7,450,000 pounds we are asking for 15,000,000 pounds this year, or more than double the quantity. That is not altogether under the control of the farmers, because weather has a great deal to do with it. We are paying freight on alfalfa seed from Winnipeg to eastern Canada in order to encourage the shipment of seed from Winnipeg to the east rather than from Winnipeg south, the object being to retain as much seed as possible in Canada.


Mark Cecil Senn: I have figures to show that in 1944, production in Canada was 9i million pounds. Last year, 1945, it was only million pounds, which would indicate that this coming spring there will be a shortage of seed for seeding purposes.


James Garfield Gardiner: There is a shortage.


Mark Cecil Senn: We want to be assured in eastern Canada that we shall have sufficient seed, because many of the meadows have been killed and there will be a large amount of land sown to grass seed in the spring. Measures should be taken to see that Ontario and Quebec will have sufficient seed. I do not think there will be any difficulty about the price, because Ontario will pay as good a price for the seed they need as can be obtained for export seed. Some provision should be made, before exports take place to any great extent, to see to it that Ontario and eastern Canada generally have a proper supply.


James Garfield Gardiner: The matter of export has been under control all season and still is. It is impossible to export any of it unless a permit is obtained, and that permit is issued only where it is essential that the seed should be exported. The effort is to keep seed in Canada, and we are assisting in shipping it from Winnipeg east to make sure that it will come to this part of the country.


Mark Cecil Senn: Has the export board any price set for seed for export purposes up to the moment? They generally have.
[Mr Senn.]


James Garfield Gardiner: For 99 per cent, purity,. 90 per cent germination seed, it is 33 cents at. Winnipeg.


Percy Ellis Wright: Has the government taken action, on the recommendation of the Canadian Federation of Agriculture, with respect to the Calgary plant for the production of fertilizer?


James Garfield Gardiner: The plant at Calgary produces ammonium nitrate. It has been operated as one of three plants during the war, the product having been utilized largely for the production of explosives and things of the kind. Representations were made by the farm federation to the effect that this plant ought to be taken over by the government and operated to produce fertilizer now that the war is over. The plant has been operated by the Department of Munitions and Supply. But my understanding is that of the three plants, the one that will probably be operated as a government plant is most likely to be the one in the eastern part of Canada in the Niagara peninsula, for certain reasons which have to do with supplies that are to be provided to some of the allied countries having something still to do with munitions. There has been however a tendency to consider the policy of disposing of the plant at Calgary. The question whether it should be disposed of to some private concern or to a farm cooperative or some other organization of the kind is under consideration. I am informed that the department has no set views in the matter. If the farmers' cooperative desires to have the plant operated, or if it can make arrangements to that end, its wishes will be facilitated. However, that is under discussion and there is nothing more I can say about it.


[Stage Direction]
Item agreed to.
Production service-
20.	Grants to fairs -and exhibitions, in the amounts detailed in the estimates, $62,690.
Mr. PEARKES:: These grants, I believe, are made in part for the purpose of encouraging the improvement of live stock throughout the country, and in furtherance of that policy many of the associations hold race meetings during the time of the annual fairs. Included on the race programmes are events for Canadian-bred colts and fillies. It is necessary for a Canadian-bred colt in order to run in these races to be registered with the New York jockey club because we have no Canadian stud book for Canadian-bred horses. During this session we have discussed such questions as a Canadian flag for Canada and a nationality bill for Canadian citizens. Would the minister give consideration to a

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Canadian stud book so that Canadian, colts may run by right on the tracks of the land in which they were born?


James Garfield Gardiner: It is the intention of the department to promote the breeding of horses of the type mentioned, and we intend to get some stallions and have them placed under clubs. I understand that the department obtains stallions and puts them out to the clubs and the clubs pay for them over a period of years. The last part of the question, having to do with the registration of horses in New York in order that they may run on tracks, is another matter. We do register colts here the same as any other live stock is registered in the records branch, but the question whether they will be permitted to run on tracks is one that I cannot answer. It is pretty much under the control of those who operate the racing clubs and of the breeders. I am not too sure that there is much I can do about it. As a matter of fact the department does not directly operate the records branch. We simply give a grant to the records people and they record all the animals that are bred, whether they are dogs, cattle, pigs or whatever they may be. They have done such a good job of it up to date that we have hesitated to interfere.


Robert Fair: What will be the policy of the government with regard to grants to classes A and B fairs during 1946?


James Garfield Gardiner: I am speaking from memory, but I think during the first war we started giving grants to A and B fairs, and possibly some others, with certain ideas in mind. In between the two wars there was always a great deal of discussion as to whether we ever should have started them. It was argued by many people that the money could have been used to better advantage in some other way, but we continued to make the grants and entered into arrangements or understandings with the provinces from time to time. Sometimes we designated a certain class of fair as being one which would receive a certain class of grant, while others were left to the counties or the provinces to encourage.
Early in the war we struck off practically all grants that were paid by the Department of Agriculture except those to boys and girls clubs. We have under consideration in the preparation of our estimates for the next session the question whether they should be reestablished. Within the last month we have had delegations here from the different organizations that are represented suggesting that we should continue the grants. We have said to each of them that the question would be
given the fullest possible consideration between now and the time the estimates for next year are completed.


Robert Fair: I should like to add my voice to the voices of those who have already made representations that these grants should be continued. I think they should be extended if possible. The minister will agree that our A and B fairs, as well as some of the smaller ones, have been of great assistance in improving the quality of our live stock and grains and other farm products. I know that some people take advantage of them and consider that they are simply a place to spend a holiday to see the side shows and all that, but the people who are really the salt of the earth, if I may use the expression, take great pride in their fairs and use them as a method of improving the quality of our farm products


Percy Ellis Wright: Is it expected that the Ottawa and Toronto exhibition grounds will be available for fairs in 1946?


James Garfield Gardiner: I have no information as to that; they are still occupied by troops.


Percy Chapman Black: What are the plans with respect to the maritime winter fair at Amherst? There is a vote of $5,000 to cover improvements, which is contributed to by the three maritime provinces. It is generally expected that the maritime winter fair will be reopened in 1946. I think the minister should make some announcement of policy so that the interested people may have as much notice as possible.


James Garfield Gardiner: I believe the hon. member is referring to the agreement that we entered into some years ago with the organization that runs that fair. We agreed to pay $5,000 for building purposes, and each year we have been paj'ing that, even right through the war. We will continue to pay it until the agreement is completed. There is no suggestion that those grants will be discontinued. This is the type of grant that is made to fairs right across Canada by way of agreement. We have been carrying out those agreements and will continue to do so.


Percy Chapman Black: If it is proposed to reestablish the maritime winter fair in 1946 there will have to be a grant in next year's estimates for the purpose. Can the minister give any indication as to what policy will be followed?


James Garfield Gardiner: That is what we were discussing a few moments ago. Communications have been received from the Toronto winter fair and other fairs across Canada, as well as the exhibition associations, asking what we have in mind. I have told them
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practically what I told the committee a few moments ago, namely, that the policy we followed prior to the war had been set up after negotiation with the provinces and that some understandings had been reached between ourselves and the provinces. At the moment we are having a dominion-provincial conference at which the collection and expenditure of revenues are being discussed. Until that gets a little further along I do not think we are in a position to announce a definite policy for the future. The policy is being worked out, and all those who are interested are keeping a close touch with us in regard to it. It will be made known at the earliest possible day.


Percy Chapman Black: I understand that the maritime stockbreeder's association wants this maritime winter fair reopened in 1946 and are making representations accordingly. I think it is desirable that a declaration of policy be made as early as possible.


Gordon Knapman Fraser: During the noon recess I picked up a book on agriculture and was surprised to find that the first agricultural and cattle exhibition in America was held at New Amsterdam, United States of America, on October 14, 1641. That is just over three hundred years ago, sixteen years after the settlement of Manhattan.


Mr. HEON:: Before the war the federal Department of Agriculture made a substantial grant to the Lachute fair, but during the war this grant was discontinued for the reasons just given by the minister. The Lachute fair is acknowledged to be one of the best in eastern Canada. I should like the minister to consider the resumption of that pre-war grant in 1946.


James Garfield Gardiner: The Lachute fair received a grant because it was in the appropriate classification. If grants are paid under any policy that is announced in the future, this fair will receive its grant.


Mark Cecil Senn: The minister has referred to classes A and B fairs as being those in receipt of federal government grants. There has been a certain amount of agitation to get grants for fairs not in those categories. Will the minister tell the committee just what is a class A or class B fair? I think it depends somewhat on the amount of the prizes given, but I am not sure.


James Garfield Gardiner: They were classified
according to the amount of live stock showing that was done, the attendance, and all that kind of thing. The class A fairs would

cover such fairs as Toronto, which is the greatest of them all, and the one at Vancouver and-


George Russell Boucher: Ottawa?


James Garfield Gardiner: Yes. There is a group of fairs in the A classification, and then there is another group in the B classification. I could get the whole list, but I think those who live in the communities know pretty well what they are.


Mark Cecil Senn: There are a number of fairs that feel that the larger fairs in A or B classes do not need grants to the same extent that the smaller fairs do. These smaller fairs are doing good work throughout the country. I was just trying to find out what would put a fair in a class lower than B and thus bar it from a government grant.


James Garfield Gardiner: They were based on the amount of prize money paid. I quite agree that it might be true that the larger the fair, the less it needs assistance. But there is another side to the picture. The more localized a fair is, the less is the argument that assistance should come from the federal treasury. In some places the assistance comes from the county, and in other places it comes .from the provinces; then there are those fairs where it comes from the dominion. In some cases assistance is given by both the dominion and the province. These things will all have to be worked out in the arrangement between the provinces and the federal government and our grants will be made where they will be the most effective.


[Stage Direction]
Item agreed to.
Marketing service-
22. Marketing service administration, $111,742.
Mr. REID:: May I ask what steps are being taken to continue and enlarge our market for eggs in Great Britain? As the minister knows, but perhaps many members do not, the egg and poultry industry of British Columbia has greatly increased, so much so that this fall the largest shipment of eggs that ever left the shores of Canada left the port of New Westminister-294 million British Columbia eggs in one shipment. That is 24 million cases, or seven eggs for every man, woman and child in Great Britain. The poultry keepers of British Columbia are wondering -what is going to happen when that great British market begins to be supplied from the continent of Europe. They have built up their plants in British Columbia, and although they realize that a market is assured in Britain for 1945 and perhaps half of 1946, they would

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like to know what steps are being taken by the department to cover the period following the end of the agreement.


James Garfield Gardiner: I had all the egg statistics with me the other night and put some of them on Hansard. I do not seem to be able to put my hands on them now. I can only repeat what I said the other night. Prior to the war we were marketing about 1,000,000 dozen of eggs in Britain each year. This last year we marketed 85,000,000 dozen; in other words the increase has been 85 times during that period. I do not know that it can be claimed that that would have happened in any event, even if the government had done nothing about it, but the government did try to promote agreements with the British government for the purchase of eggs right from the beginning of the war, and we were able to bring about an increase in their purchases. Then, too, we developed in cooperation with the British and others the process of dehydrating eggs, which allowed us to ship over seven times as much by weight of eggs in a given space in dried form as we could in the shell. That was at a time when it was essential that we should get out shipments into as small a space and down to as small a weight as possible. So a large portion of the shipments that we have made, as indicated by the figures I put on Hansard the other night, was due to the dehydration process which was developed and which made possible the shipment of eggs in powdered form.
There was also a process developed for which British Columbia is entitled to the credit-the dipping of eggs in oil, a process I do not fully understand. By the use of that process it is possible for eggs to be kept fresh for a long period of time. At the beginning of the war these eggs were classified as storage eggs. We were insistent at that time that they should be classified as fresh eggs when shipped from this country to Great Britain, and now these eggs are accepted as fresh by Britain as a result of our experience during the war. This British Columbia process of supplying eggs in the oil-dipped form has resulted in a greatly increased shipment of what are now known as fresh eggs to the European market, particularly Britain. That in itself will bring higher returns to Canadian egg producers right across the country, the classification of these eggs as fresh rather than as storage eggs.


Mr. CAMPBELL:: When these estimates were before the committee yesterday I brought to the attention of the minister two cases of what we considered discrimination. The minister dealt with one case, but I did not get an answer in respect to the other. My
question was, why could not the farmer who raises hogs and wants to feed his own grain to them get the same bonus as the man who buys his feed for hogs?
There is another matter I want to bring to the minister's attention, and it has been brought to his attention many times in the last few years. For a long time the farmers of this country have not been satisfied with the methods of marketing live stock. Through their different organizations they have on many occasions asked the government to set up a live stock commission for the handling of live stock. I want to put on Hansard a statement that was issued by the United Farmers of Canada in September last in connection with the selling of live stock. It reads as follows:
Live stock producers are entirely at the mercy of the packer buyer, who has sole command of the only market for live stock disposal in Canada, and the price for live animals is whatever the packer buyer chooses to make it, whether in the packer's yard or the packer's drover agent on the producer's farm or ranch.
Previously the producer had at least four main markets for his cattle:
(1)	The feeder buyers in his own or neighbour provinces;
(2)	The eastern feeder buyer;
(3)	The American feeder buyer and market;
(4)	The Canadian packing companies.
Numbers one and two markets are gone
through owing to the feed situation and policy uncertainty. Number three is closed. Number four therefore is in supreme command, and as they are in control of a market with competition almost entirely eliminated, and as there are no floor or ceiling prices on live animals producers must take their price whether delivered individually, through a drover, through a commission firm or by their own cooperatives, which can only benefit them by reducing assembling costs.
On the other hand packers have two -inexhaustible markets at their disposal with fixed prices; first, the domestic market for which they receive -the wholesale ceiling price, which is widely different to the price -received by producers; second, the Canadian meat board, which agency will buy any volume of beef from -the packers at fixed prices based on grades.
Producers will only get fair prices when animals are in -short supply but never above the packer's ceiling price; then when the flow of cattle becomes heavy the -purchase price paid to producers has been -and will again be below the packer's fixed floor price.
The government has a multitude of -live stock -and meat boards and committees with little policy cohesion, and -the chasm between the man who ra-ises the animal and all others engaged in the service -and in the industry is as wide -as the seas.
During the past few years, great strides have been made to improve -and increase the industry of animal production in Canada, and producers have hitherto been very patient, but they now feel -that their industry has been kicked around enough and that perhaps official -advisers and those with an assured profit in the industry could for a change start producing -and determine their own profits.
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In another debate in the house this session, a member of this group, urging the government to set up a board of live-stock commissioners, quoted from a brief presented to the government by the Canadian Federation of Agriculture in February, 1944, as follows:
This federation desires to repeat its request of former years that the federal government should establish a board of live-stock commissioners, with powers and duties similar to those of the board of grain commissioners. It requests that the said board be empowered to administer under the Department of Agriculture, the Live Stock and Livestock Products Act, and that the members of the board shall be appointed in consultation with organized agriculture. The Live Stock and Livestock Products Act should be amended and consolidated with other legislation in order to vest in the board the power to license, regulate, and control the facilities for assembling, transporting, yarding, slaughtering, processing, and packing, together with the facilities for grading and selling all live stock and carcass products designed for human consumption.
I think that shows defiinitely, Mr. Chairman, that the government should really take into consideration again this matter of a board of live stock commissioners. I notice that the minister in another statement in this house suggested that there were obstacles in the way, but I think that these obstacles should be overcome; he can find a way of getting around them.


Mr. McIVOR:: About thirty-five years ago
I heard a student at Manitoba university by the name of James Gardiner debate the question of free trade. He upheld the negative side, and he won by a splendid margin. I congratulate him upon his statement at the recent agricultural conference here. It shows that he is still in favour of free trade, with the United States at least, so that he is growing in wisdom and in practical usefulness. Free trade should run north and south just as well as east and west. We should tell the United States government that we are not only practical neighbours as far as friendship is concerned, but real neighbours as far as tariffs are concerned. It should work both ways-not one thing for the United States and another thing for Canada; let us show the world that we are real neighbours.


John Ritchie MacNicol: You would put every
factory in Port Arthur out of business.


Robert Fair: I have no hesitation in supporting my Irish friend and former Irish neighbour across the floor. I have on many previous occasions brought up the question of guaranteed prices for producers of live stock, and again I must appeal to the minister to do something in the way of giving that guarantee to the producer. As has been shown on many

occasions, the markets fluctuate, and these fluctuations are all to the benefit of the packers at the expense of the producers. It was shown, I think, that in October last the packers had a margin of about two and a half dollars on each hog shipped, and all that was at the expense of the producers. It is about time something was done to protect the producer against the fluctuation of the markets.


Gordon Knapman Fraser: Are there any regulations
in regard to the inspection of peaches which are shipped to market. I understand that the only regulations are as to size, and that there are none as to the condition of the peach, as to how green it is. This has been the trouble with the marketing of peaches during the last five or six years, and perhaps longer. The peach must reach a certain stage before it will ripen after it has been shipped. Despite the fact that shippers have little tags in their baskets which say, "When these peaches are received in your home, spread them out on something flat so that they will ripen," during the last five or six years green peaches have been shipped which would never ripen, and the Canadian consumer has been fooled; there is no doubt of that. Now there must be a remedy, and I understand that that remedy is for the minister's department to put iu the proper inspection at the shipping point, and also see to it that all fruit is inspected which is taken away from the peach orchards. A great deal can be said for this, and I believe the real peach grower would be thankful if the government would do- something in that regard.


James Garfield Gardiner: May I ask that those
who are interested in this question reserve their remarks on it until we get to item 26?


Gordon Knapman Fraser: I brought it up on marketing service administration.


James Garfield Gardiner: Yes, but if we take these items which concern any particular subject and deal with them at the appropriate point, we can confine the administration item to general remarks.


Gordon Knapman Fraser: Very well.


James Garfield Gardiner: Take what has been discussed on live stock, just a moment ago: it would be much better if we could discuss that under the item, live stock and live stock products, or the marketing item which follows it, because at that time I shall have all the information in front of me, and I can give a better answer than I could give at the moment.


Mr. KNIGHT:: I asked the minister a question, I think it was yesterday, and he advised

Supply-Agriculture
me to wait until this item was reached. To what extent are we as consumers here in Canada sacrificing quality in our home-consumed bacon in order to send the best to the British market?


James Garfield Gardiner: Would the hon. member mind leaving that until we get down to live stock and live stock products?


Robert Ross (Roy) Knight: The minister stopped me yesterday and said that I could ask it on item 22.


James Garfield Gardiner: I said, on marketing, which begins with item 22. If you look at the headings you can pick out the item on which you should discuss the matter. If it is live stock, discuss it under live stock; if it has to do with fruit, bring it up under the fruit item.


Robert Ross (Roy) Knight: It is difficult to get into this discussion. I thought after the second time I would hold my ground.


James Garfield Gardiner: If it is a general discussion on administration, bring it up under this item.


William Ross Macdonald: I wish to draw the attention of hon. members to the fact that in committee remarks must be strictly relevant to the item under consideration. At the present time we are considering marketing service administration. Shall the item carry?
Mr. TOWNLEY-SMITH: No. I wish to make a few remarks on this matter of marketing. Every once in a while a letter on Canadian live stock products is issued by the industrial and development council of Canadian meat packers. This is dated October 8, 1945, and it contains an interesting table concerning the cost of producing and marketing bacon carcasses.


James Garfield Gardiner: I am sure we can get along much more quickly if hon. members will try to cooperate. There is no one sitting at the table at this moment who has the facts with regard to the marketing of bacon. Mr. Pearsall will be here in a few moments, when we get down to live stock and live stock products. I could give the hon. member a general answer, if that is all he wants, but it would not be nearly as satisfactory.
Mr. TOWNLEY-SMITH: It is not really a question; it is a statement.


James Garfield Gardiner: Well, a statement on marketing of live stock products ought to be made under item 27.
Mr. TOWNLEY-SMITH: Thank you.


Mr. HERRIDGE:: Yesterday I asked the minister whether it is proposed to correct the 47696-199
situation with regard to the egg inspection service in the interior of British Columbia. Could the minister give some information on that?


James Garfield Gardiner: Just as soon as we get down to live stock and live stock products, yes.


Herbert Wilfred Herridge: Yesterday the minister told me to bring up this matter under the marketing administration item.


James Garfield Gardiner: I said, bring it up under marketing, but what we are dealing with now is item 22, marketing service administration. I do not think it is going to hurt anyone to wait a few minutes until we get to item 28.


[Stage Direction]
Item agreed to.
Marketing service
[Stage Direction]
23. Agricultural economics, $129,980.
Mr. ARGUE:: I believe I am in order in discussing under this item the matter I have in mind. As the minister knows, there is a dominion economics department located in the university of Saskatchewan, and a number of university students taking the course in farm management find it convenient to do temporary work with the dominion economic department. It provides' the students with good training and some funds toward paying their way through university. What rate does the dominion economics department pay temporary help? Has consideration been given to raising those rates? I believe I am correct in saying that two years ago the rate paid to temporary help, which included senior students for the most part, was thirty-five cents an hour, which I think is shameful.


James Garfield Gardiner: I am sorry, I have not the information with me at the moment. Would the committee go on with something else until I get the information?
Item stands.
Marketing services-
2k- Dairy products, $401,719.


Percy Ellis Wright: When we were considering the publicity and extension division I endeavoured to bring up the matter of advertising of Canadian dairy products in Great Britain. I referred not only to advertising but to making our products available to the British public in a form which would be suitable to them. Will the minister explain just how our cheese is marketed in Great Britain? It is my understanding that between the two wars New Zealand captured a great deal of the Canadian market for cheese in Great Britain. My information is this was largely because she made her cheese available to the British
REVISE!) EDITION
Supply-Agriculture

market. She had cold storage plants there where the cheese can ripen and be available at all times. Have we such cold storage plants in Great Britain? What is our policy with respect to the marketing of our cheese and the maintenance of the market which we now *have? It is very important to a large section of our dairy industry that we should retain that market, and we can do so only by having supplies always available there in the form in which the British public want them, rather than having them available only at certain seasons of the year.


James Garfield Gardiner: The suggestion that the New Zealand people did capture a considerable part of the British market between the two wars, is, of course, in accordance with the facts. We were heavy producers of cheese which was required in the British market, and we were sending it to that market prior to the last war and during the war. But at the end of the war we took the attitude, which some people seem inclined to take at the end of this war, that our product had a certain value and we would not sell it for any less. The result was that the British began buying New Zealand cheese in greater and greater quantities.
As I remember the story, the New Zealand people accepted the price for their cheese which they were offered, and produced1 it in large quantities and sent it over. It is true that they did have facilities to handle it, but they did more than that; they advertised it thoroughly, so that by 1936, when I had my first experience with it personally, they had made great strides. I was over in Britain discussing the possibilities of greater marketing of farm products, and everywhere one looked he saw New Zealand cheese advertised, but in 1936 Canadian cheese was not advertised anywhere. As one walked out on the Strand from the Savoy hotel and looked about half a mile down the street where the street had been widened and there is a building extending out across the sidewalk, he saw on the top of that building: "Eat New Zealand Cheese". More people walk that half mile going to Work every morning and two or three times a day than any other half mile in the world. This sign was in front of them all the time, but nothing about Canadian cheese, nothing about Canadian products of any kind. The same situation was true of the buses. Every bus that passed you on the street had a sign on it reading: "Eat New Zealand Cheese", and nothing about Canadian cheese. I came back to Canada and sent six men over to Britain to look into the matter, and then I asked them to get out a pamphlet. After I got that pamphlet out I remember I had considerable
	.
trouble, not with the people in Canada, not with the people in Britain, but with some people in the house; with the result that probably it was not as widely circulated as it should have been. Nevertheless it said just what my hon. friend has been suggesting in the last few moments. It said that our cheese and other farm products were not being advertised in Britain, and it proposed ways and means of getting that advertising.
In the years between that time and the war, Canadian farm products were greatly advertised. It was not done under the agricultural department direct; it was done under the Department of Trade and Commerce and in a measure through external affairs. But it was done, and we came into the war with much more of our Canadian cheese on the British market than we had in 1935 and 1936. During the war we have gone on pushing first the production and then the 'marketing of cheese in Great Britain, with the result that in 1942 we obtained the largest production we ever had in the history of Canada. We got up to over 200 million pounds, and we sent 140 odd million pounds to Britain. We are in a favourable position at this time.
I quite agree that one of the things we have to continue to do, now that the war is over, is advertise our product in Britain. We have before the government at the present time consideration of a policy of extending our facilities for the handling of not only cheese but other products on the other side, as New Zealand has done. It has been suggested in the first place that we should improve our cold storage facilities on the wharves in this country; that we should improve our cold storage shipping facilities on the railways across Canada, and thus put our product on board ships in good condition. We should improve our refrigeration facilities on boats going across to the other side, and then we believe we should have some facilities on the other side for the proper storage of Canadian bacon, cheese, and other food of the kind that we are sending over, in order to maintain them in a reasonably good condition until they are placed on the market in Britain.
I quite agree that the suggestion which has been made is one to which we should give some thought, and that is being done at the present time.


George Russell Boucher: Could the minister give us some idea as to the government's policy of continuing the bonus on cheese? This is important to the cheese industry, as they say it takes a year from the time of planning to the time of marketing. I notice in the estimates that the total bonus paid on cheese last year

was not equivalent to the bonus on apples. It does not seem to me that that comparison is a favourable one for the cheese industry.


James Garfield Gardiner: The premium that we pay on cheese was, of course, being paid before the war started. It continued through the war and so far as I know will continue indefinitely. We pay a premium on 93 and 94 score cheese, and that we shall continue to pay. That is the only direct subsidy we pay on cheese. At the present time we pay a subsidy on milk which enters into the production of cheese, which is much the same thing as paying it directly on cheese. Of course that subsidy will be considered when we are making any change from the policy now carried out under the War Measures Act to the policy which may be carried out under the floors prices legislation. At the moment I. am not in a position to say what the nature of it will be, but the endeavour during the transitional period will be to maintain the relationship between the price of cheese and the prices of the commodities the producer of cheese has to buy, as has been stated here on a number of occasions. In addition one must keep in mind the fact that we have a contract with Britain which will continue until the spring of 1947 and fvhich guarantees the present floor price of cheese for that period of time. The premium is on as well, and the only thing we are not absolutely assured of is the milk subsidy. So far as I know that will be retained for some time, but I do not know just how long.


George Russell Boucher: I should like to emphasize that point, because I think the minister will appreciate the fact that cheese production is an important matter in Canada and of great concern to war-torn Europe and to Britain. However, to enable farmers engaged in the *manufacture of cheese to produce the quantity and quality desired, considerable guidance must be given before the cheese production season comes along, so that they can plan in advance how to dispose of their milk, whether to the cheese factories, the dairies, or the creameries. In other years we have criticized the minister for being a little late in giving the farmers the information they require, and if we could get these directions earlier than we have been able to get them in past years it would be of interest and benefit to the farmers and to the country as a whole.


Mr. CARDIFF:: I should like to ask the minister just what standing our cheese has in Great Britain, so far as quality goes, as compared with New Zealand cheese, for instance.
Mr. .GARDINER: Our cheese has been right at the top of the list so far as quality is
47696-199i
concerned. That is indicated by the fact that we have always enjoyed a premium of two or three cents a pound as compared with New Zealand cheese, and that was so even before the war. Our cheese is recognized as being right at the top in the matter of giving the quality they require in Britain.


Mr. BROOKS:: Yesterday I called the
minister's attention to a protest from the New Brunswick cheese producers' association in reference to the regulation of the board of health which requires that, cheese mature for a period of ninety days. At that time I understood there was not very much that could be done in that connection, though I think it is a serious threat to the cheese industry in our province. In New Brunswick they seem to like their cheese quite green, and they sell principally to their local market. Personally I have not acquired a taste for green cheese, but this is a serious matter down there. One of the great difficulties we shall encounter if this regulation remains in force is in connection with storage facilities in the small cheese factories. I believe the larger factories are given a subsidy for the construction of storage space, but in the small cheese factories no such provision is made. I should like to know whether some arrangement could not be made for tjie storage of cheese at some central place. The town of Sussex in my constituency is the centre of the cheese industry; as a matter of fact I believe about eighty per cent of the cheese factories in the province are-in Kings and Queens counties, which fornt the constituency of Royal. I believe these-cheese producers will be in a serious position unless something is done. A few minutes ago the minister spoke about storage facilities having been constructed across Canada, I should like to know if it would not be possible to provide some storage facilities in the town of Sussex. We have them now in Saint John and also in Moncton, but they are not sufficient to accommodate our cheese production if it has to be held for ninety days.


James Garfield Gardiner: Of course we do assist those who are putting up storage facilities, in New Brunswick or wherever it may be, to the extent of thirty per cent of the cost.


Alfred Johnson Brooks: That is in connection with the factory itself?


James Garfield Gardiner: No, not the factory. There are two provisions. There is the old act, which I think has been in existence since at least 1922, which provides that wherever storage facilities are built, whether by a cooperative, an individual, a corporation or whoever it may be, and that cold storage is
Supply-Agriculture

available to the public, we pay thirty per cent of the cost. One-half that thirty per cent is paid in the year in which the plant is built, and the other half is spread over four years. That provision is available to anyone anywhere in Canada who puts up any storage facilities. Then under the act we passed in 1939, at the time we put a premium on the production of high quality cheese of 94 and 93 score, we agreed to pay for the cost of putting cold storage facilities right in the plant where .the cheese is made, in order to assist them in raising the standard of their cheese. We are doing that right across the country, too.
As to the other question having to do with the curing of cheese, speaking subject to correction because I am not too certain of our legal position in the matter, I think matters of health are largely under the control of the provinces. If the product is to be shipped out of the province of course it comes under our control and we can check the shipment of it. We brought in the regulation as the result of an epidemic of typhoid which broke out in Alberta, where the germ was traced back to a carrier who was providing milk for the production of cheese at a certain plant. Curing the cheese for a period of ninety days kills that germ, so it was stated that cheese had to be cured for ninety days as protection against the spread of typhoid. If those facts are correct I think everyone will agree that this is the thing which should be done.
To come back to the point raised by the ion. member, however, so far as we are *concerned I should think we could only enforce that in connection with the cheese that as shipped out. If the people of New Brunswick want to eat green cheese and things of the kind I am not too sure we could do much about it under tha.t regulation. It is only when we have the full cooperation of the provincial authorities, as I think we have had up to the moment, that we can enforce the regulation both provineially and inter-provincially. I would hesitate to suggest that we could change the regulation. Certainly I should not want to do so without very strong representations from all the provinces.


Alfred Johnson Brooks: I quite agree with the
minister from the point of view of health, but I was asking about the cold storage facilities. Do I understand that 30 per cent of the cost is paid by the government if the cold storage facilities are maintained in the factory?


James Garfield Gardiner: 
Alfred Johnson Brooks: Then if the New Brunswick cheese producers' association set up a cold storage plant of their own the government would provide 30 per cent of the cost?


James Garfield Gardiner: Yes.


Heber Harold Hatfield: Is there not some
chemical that could be used in cheese to kill the germ mentioned by the minister, without having to. cure it for ninety days?


James Garfield Gardiner: I am not too sure whether there is such a chemical, but this is considered to be the simplest way of doing it. As a matter of fact I think it is one of the strong arguments for eating cheese, that curing it in this way makes it safer.


Mr. CASE:: There is an item here of $1,50.0 for lawyers' and analysts' fees. Are these lawyers who are employed by the department, or does this represent fees and retainers paid to outside lawyers? And whaf about the analysts. I do not suppose the lawyers are analysts, though they are lumped together in this item.


James Garfield Gardiner: That just provides for the occasional services of lawyers and analysts. We apply to the Department of Justice for the appointment of some local man to do some particular thing for us; it may be a prosecution under the act.


Wilfrid Garfield Case: And how about the analysts?


James Garfield Gardiner: The same thing applies there; we employ them when we need them.


Mr. MENARY:: Could the minister tell
us how much poultry was exported to Britain in 1944 and so far in 1945, and also whether any honey has been exported?


James Garfield Gardiner: I shall have to ask the hon. member to wait until we get to the live stock division. I have not the information now.


[Stage Direction]
Item agreed to.
Marketing service
[Stage Direction]
23. Agricultural economics, $129,980.
James Garfield Gardiner: The question of grants made in connection with economic surveys was raised a few moments ago by the hon. member for Wood Mountain. These are really salaries paid to individuals taking part in this work and they range from $1,260 to $1,800 a year. These men are provided for under the Prairie Farm Rehabilitation Act vote. They are not provided for under the vote stipulated here. Most of them-I believe practically all of them1-come under the P.F.R.A. grant. They operate in different places and in different ways. I have a list of the group here, a

Supply-A griculture
little more than a page, which I could put on Hansard if the hon. member wished to have it.


Hazen Robert Argue: I am not interested in that list. I am really interested in, the wage rates paid temporary help in the winter time by the dominion economics department.


James Garfield Gardiner: We have no arrangement with regard to that. It will be understood that the agricultural colleges associated with the universities in the two provinces of Alberta and Saskatchewan are run by the provinces and we give assistance. In some cases it is a matter of our engaging individuals and paying them. That is true of the group I have here ranging from $1,260 to $1,800. The other work which is done may be temporary and is perhaps paid for by the university authorities under some arrangement with the provincial government. The whole administration is under the province.


Mr. BENTLEY:: The hon. member for
Battle River made reference to a certain survey with regard to the effect of commercial fertilizers on soils and I do not see anything here for that particular work. I do not see any estimates in connection with R.O.P. publications. All pure-bred associations issue in their journals a record of production and the department also issues an extensive one, which must call for quite a bit of money. If some of that money were diverted to other purposes it would add to the services that are being rendered: It does not seem necessary for the government and the breeders' associations to issue material as extensively as they do, and the breeders' associations appear to be the proper ones to do it. I should like to see the minister's estimates increased, because he has not enough money for the work of his department. I would suggest, therefore, the diversion of some of this money to other purposes.


James Garfield Gardiner: I am not certain where the R.O.P. pamphlets are published.


Thomas John Bentley: It would be under economics.


James Garfield Gardiner: It would be under publicity and extension or under production somewhere. It may be that the pamphlets the hon. member has in mind are put out in the records organization, which is not a department of government, but a set-up provided by the breeders' association to which we make a grant. But their publications will be theirs and not ours.


Thomas John Bentley: Would it not be better for the department to make a grant for that purpose instead of having these activities duplicated?


Wilfrid Garfield Case: Under salaries there appears provision for cost of living bonus. I understand that this has been done away with and that it will be incorporated' in the regular salaries. That was carried out in 1944-45 and, I believe, in 1945-46. Another item is travelling expenses under various heads. What is the over-all travelling expenses total of the department? How are they accounted for? At the moment I am seeking information about the cost of living bonus, and I should like to know why it appears in that way. I understood it to be incorporated in the regular salaries.	*


James Garfield Gardiner: The decision has been made to incorporate it in the regular salaries and we are going through the process in the different departments of bringing that about, but so far as these votes are concerned, it is still as it was. I do not know to what extent the incorporation has taken place in our department, but surveys are being made by the civil service commission to bring it about.


Wilfrid Garfield Case: What about the over-all travelling expenses of the department?


James Garfield Gardiner: The total of all given here would indicate what the total expenses are, but I have nothing under my hand to show it.


[Stage Direction]
Item agreed to.
Marketing service-
25. Subsidies for cold storage warehouses, under the Cold Storage Act, and grants, in the amounts detailed in the estimates, $338,477. Marketing service-
Percy Ellis Wright: There is a considerable reduction, the reason being, I presume, that the facilities have been paid for now, and therefore it is not necessary to continue the. vote. Can the minister give some information regarding the extent of cold storage facilities built by the government during the war in various places in Canada or the handling of production in Canada? Has there been any building of that description by the government? If so, to what extent and where are the facilities situated?


James Garfield Gardiner: I do not think we have built, any cold storage as a government. I am running over in my mind hurriedly, but I do not remember any that we constructed during the war. We did discuss the possibility of doing so in connection with the apple industry in Nova Scotia, but no construction was made. As a matter of fact we advised them that we had been paying up to thirty per cent of the cost of cold storage across Canada and suggested their proceeding on that basis, but up to date I cannot recall any cold storage put in by the government itself.


[Stage Direction]
Item agreed to.
Supply-Agriculture
[Stage Direction]
26. Fruit, vegetable aud maple products and honey, including grant of $5,000 to Canadian horticultural council, $567,000.
Gordon Knapman Fraser: I was speaking before under vote 22 and I was told to bring up under this item the question of inspection of peaches. I understand that at present the peaches are inspected or graded only as to size. As I said before, I understand that the peach must reach a certain stage of maturity if it is to ripen after it has been shipped. Has the minister any suggestions to make, or could he tell us what they are doing along that line? I am quite sure the peach growers would welcome a proper type of inspection, because at present peaches that have not reached the proper stage of maturity when they are shipped do not ripen when received by the consumer; they rot and they are a total loss to the person who buys them.


James Garfield Gardiner: I do not want to appear to be passing the buck to the provinces in connection with this matter; I am simply stating the facts. The grading of farm produce of different kinds, whether it is fruit or any other commodity, comes under the provincial authorities if the product is sold and marketed inside the province. We have no legal authority over that whatsoever. In so far as peaches are concerned, the grades would be established under the Fruit, Vegetables and Honey Act, which is a federal act. Those grades are reenacted under the provincial legislation. In the case of Ontario this .is the farm produce grading and sales act, which covers provincial enforcement. They have an act and we have an act. We have set up certain grades and certain qualifications and they have reenacted them. In most instances they employ our inspectors; they say that our inspectors are their inspectors in order to legalize the acts of our inspectors. When our inspectors are working within the province in connection with business carried on inside the province they are working under the provincial legislation, not under ours.
I think the situation in Ontario this last year was created largely by weather conditions. It was probably most difficult to supply the market there was for peaches with the highest grade of peaches. I think it is perfectly right to say that last year a great many peaches went on to the market which were supposed to be up to grade but which were not up to grade. I do not know to what extent such peaches got outside the province, but I have had no complaints from persons outside Ontario with regard to peaches that they obtained from Ontario. But I have had a lot of complaints about peaches sold in Ontario. Whether it was our inspector or the

provincial inspector who made the inspection, the inspection would be made under the provincial law. As I understand it, their grading would be just as high as ours and the inspected peaches would be the same whether marketed inside or outside the province, but because of the difficulties which occurred, much closer attention will be paid to grading and marketing during the coming year.


Gordon Knapman Fraser: I have had reports of peaches that went into Quebec which were not ripe but which rotted in the bottom of the basket. I understand that there have also been complaints from Quebec with regard to the pink or red gauze put on top of the baskets. This pink gauze is put on top of green peaches, and it makes them look as though they are ripe and the purchaser buys them with that understanding. The department should have some regulation governing the grading. I do not think the minister has answered my question in regard to the grading as to greenness or quality. As I understand it, they are graded now only as to size. The dominion government is the agency that should see that they are graded properly. When a basket of peaches is marketed as being grade 1, it should be grade 1, instead of being a basket full of hard, green rocks.


James Garfield Gardiner: I think that question
arises from the definition of "mature." The act states that unless otherwise defined, "mature" shall mean fruit that has reached the stage of development which ensures the completion of the ripening process. Probably that term will have to be more clearly defined before we can meet the situation.


Gordon Knapman Fraser: That is exactly what I was trying to get at.


James Garfield Gardiner: It has been assumed
that when one picks a peach or any other fruit it will be picked at that stage of ripeness which will ensure that in a reasonable time it will ripen, or by the time the cook comes to use it. I think it was found this year that the fruit was picked a little too green and it rotted very quickly. This caused a great deal of trouble right across the country. But as I say, that definition seems to be the source of the trouble and probably we shall have to try to make it tighter.	[DOT]


Mr. HANSELL:: We are being asked to
vote a little over half a million dollars under this item. I have no objection to that, but I should like the minister to throw some light on a little problem that I have had brought to my attention on several occasions by correspondents in the southern part of my

Supply-Agriculture
constituency. This has to do with the marketing of perishable fruits by British Columbia growers outside that province. When I received this inquiry I went to the hon. member for Yale who helped me out. I remembered that he had been in the government when the Natural Products Marketing Act was first passed. The minister knows that that act was sent to the courts and declared to be ultra vires; it was taken to the privy council and they supported the decision of the courts. But that does not explain the position to the people who are interested. People in southern Alberta, and perhaps in other parts of the country, are unable to purchase fruit from an individual grower at a cheaper price, and some individual growers do not understand why they cannot sell outside the province and receive a little better price. The grower would get a better price and the consumer would have to pay less. I am not asking for a lengthy statement, but I wonder if the minister could take a minute or two to explain this problem.


James Garfield Gardiner: This question has been
discussed. I think every year since I have been here, and I do not know that we have been able to get very far with it. Many years ago the provincial government of British Columbia passed a marketing act which gave authority to the organizations which control fruit in British Columbia to hold fruit off the market under certain circumstances. Among other powers which I do not wish to discuss this afternoon, they were given the power to hold certain species of apples from the market until other species had been entirely marketed. They also set the dates on which the apples shall be shipped. I stated once before on the floor of the house that a man came into my hotel room in Regina once and said to me, "Why cannot I buy such and such a species of apple?" I said, "Can't you?" He said, "No, I have been into a number of stores and cannot buy an apple, and I finally bought a case of oranges." I said, "That was your own decision. What are you suggesting I should do about it?" There is nothing I know that we can do. It had been decided that those apples of a certain species would not be marketed until a certain date until other apples had been got out of the way. That had been decided in British Columbia and there was not much I could do about it. I said, in discussing this matter before, that later on it might have the effect-it did not have that effect during the war-of making people want to eat something else or go somewhere else for their apples. However, it is British Columbia legislation, and it has
gone to the privy council, where it was decided that the legislation was within the powers of the province to pass and enforce. It has been enforced there and as British Columbia has decided that it is in their own interests I would hesitate to criticize it.


Wilfrid Garfield Case: To come back to travelling expenses, I find that the travelling expenses over-all amount to SI,170,709. I am not criticizing that total because I have no doubt that it can be justified, but it would appear that this is a substantial travelling department. Do they use motor cars or railway passes, or do they have to pay the regular fares?


James Garfield Gardiner: The travelling expenses for this particular branch are $59,000, or ten per cent of its expenditure. Our expenditures here are a little over $10,000,000, and the hon. member said that the total travelling expenses were $1,170,709, or a little over ten per cent, which is the same proportion that $59,000 bears to the expenditure for this particular branch. So that the travelling expenses seem to run about the same'all through the department. I have not examined other departments to find out how our travelling expenses compare with theirs, but I would be surprised if ours were not higher. The reason is that we have to deal with the affairs of 750,000 farmers, and our inspectors have to go right out on the farms and into all the markets for their products of those 750,000 farms, into creameries and everything of that kind all across the country, so that I would be surprised if our travelling expenses are not higher than those of other departments because our administration could not be properly carried out if that were not so.


Mr. STEPHENSON:: Is there any overlapping between the provincial and federal departments of agriculture in the matter of inspection? I have received a letter from a dairy in my town, and this is the complaint the writer makes:
We have twelve or fourteen inspectors calling on us at present, namely, local health inspector, provincial health inspector, provincial milk test inspector, provincial milk control board inspector, provincial producer's inspector, scale inspector, smoke inspector, excise tax inspector, income tax inspector, unemployment insurance inspector . . .
And so forth. That is what they have to go through, although I know that some of these inspectors do not come under this department. But is there not overlapping between federal, provincial and municipal inspections?


James Garfield Gardiner: That list indicates that not very many of those inspectors were attached to the Department of Agriculture,
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but we take the blame for our share. I repeat what I said a few moments ago, that there is a definite ararngement between the provinces and the federal government that all through these services, the dairy branch, the fruit branch and I think in every case, the same inspectors are used for both federal and provincial inspection. What they do is to appoint our man to do the inspections required by the provinces. We try to avoid overlapping. In fact, at each of our agricultural conferences that we have had in the past ten years that has been one of the outstanding questions, and it has been agreed that everything possible has been done to avoid overlapping in the inspection service.


Lewis Elston Cardiff: You have a milk inspector, a cheese inspector and a butter inspector. I can see no reason why one man could not inspect all three products, instead of one man being sent around the first of the week and another man around the last of the week. Surely, if a man knows something about milk, he should know something about cheese and butter.


James Garfield Gardiner: There are two sides to that. A specialist in cheese is not necessarily a specialist in butter, and in many cases you probably could not use the same man. Again, the big cheese producing area is from Inger-soll straight through to Three Rivers. Some butter is produced in that area too, but western Ontario is more of a butter-producing area than a cheese-producing area. There may be the occasional cheese factory in that area. A cheese specialist would only be competent to visit a small percentage of the plants in that area unless he was a butter expert too, and they do not necessarily come that way. One man specializes in cheese and another in butter, and you have to have a competent man to give a satisfactory inspection.


Charles Elwood Stephenson: I should think one man would be competent to iuspeoi; Butter, cheese and milk. If you call in a doctor, he can deal with measles, mumps and other ailments, and surely to goodness a man can be trained to inspect butter, cheese and milk instead of one man being sent to inspect cheese, another butter and another, milk. The dairymen have enough to put up with without all these inspections.


James Garfield Gardiner: We want a specialist when we are very sick. But apart from that, cheese and butter inspectors seldom meet in the same factory, although you will find that in the province of Quebec. It is not a case of two or three men dropping in to the same place but of two men dropping in to two different places.


Gordon Knapman Fraser: The only complaint I have heard about inspections in my district is that the inspector, who cotoes from Belleville, goes to just one dairy in the Peterborough district and takes a sample of milk to see if there is enough cream in it or too much. Then he goes back to Belleville and checks it, and then comes back the next day. for another sample. Belleville is a long way off, seventy-five miles away.


James Garfield Gardiner: Perhaps he thinks some man there is crooked and he tries to drop in unexpectedly.


Mr. BARRETT:: I should like to refer to the red netting that is used on peach baskets. Rightly or wrongly the public suspect that it is being used by unscrupulous peach-growers to camouflage green peaches, but from what I can learn the reputable peach growers are not particularly in favour of the red netting. Is any action contemplated in regard to the use of it?


James Garfield Gardiner: The matter of disallowing that kind of covering on peaches is being considered, and I understand there is to be a largely attended meeting on Saturday of next week in order to give consideration to that question along with many others.


Robert Ross (Roy) Knight: Are we on live stock and live stock products?


William Ross Macdonald: We are still on item 26.


Robert Ross (Roy) Knight: The matter I wish to bring up is perhaps not so very important, but the minister's persistence in keeping me to my turn made me equally persistent to get in.


William Ross Macdonald: Order. We are still on item 26.


James Garfield Gardiner: No; it is carried.


[Stage Direction]
Item agreed to.
Marketing service-
27. Live stock and live stock products, $631,507.
Robert Ross (Roy) Knight: You cannot beat a man at his own game, and I know the minister is right. He must know my little preamble ' almost by heart by this time.
What I was talking about was the horrible quality of the bacon products we have had to consume in this country, and with good reason, over the last five or six years; but one of the questions I wanted to ask the minister was, to what extent are we sacrificing quality in our home-consumed product in order to send the best to the British market? As I intimated before, perhaps we should not talk about the matter with any accent on

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sacrifice, because our sacrifices have been infinitesimal in comparison with what the consumer overseas has put up with.
I was overseas just prior to the war, and I made it my business to look into this matter of Canadian bacon. I wonder now what percentage of our home-consumed bacon comes from sows, stags and, heavies. I know that to compete with Irish and Danish bacon we have to send our best over there. I was amazed, however, when one of my colleagues -I take it we are all colleagues here-on the-Conservative benches talked about our having to do something about the matter because the Danes were "stealing" the British market for bacon.


Gordon Knapman Fraser: They certainly are.


Robert Ross (Roy) Knight: Yes; I think it was the hon. gentleman who has just spoken who said that the Danes were stealing the British market for bacon. I would suggest to the hon. gentleman that the Danes are merely coming back into their own.


Gordon Knapman Fraser: They are getting their own and ours too.


Robert Ross (Roy) Knight: We never had the British market for bacon.
It is not only in proximity to the purchasers that the Danes and the Irish have the advantage. The minister said, perhaps yesterday, that you had to have grain to raise pigs. The minister also knows that the less proportion of grain in a pig's diet, the better pork you have and the faster you can make it. The Irish peasant who has only one pig feeds it on buttermilk, boiled potatoes and whatever small amount of grain he can get; he raises the best pork in the world, and raises it faster than it is raised any other place I know. The same is true to some extent of the small Danish farmer, because he uses a large proportion of tankage and skim milk which he has available from the fact that he goes in for dairy products.
Just before the war I looked somewhat into this matter of Canadian bacon in Belfast, and from the point of view of quality. I was interested to hear the minister say that Canadian cheese held a unique place on the British market. I am glad to hear that. He knows. But I found that Canadian bacon was occupying at that time a very poor fourth place on the British market. As a matter of fact, I may say, I was able to buy bacon over there sliced and ready for the table-strange to say, Canadian bacon-at fifteen cents a pound less than my wife was paying in the city of Saskatoon, for the same brand of bacon which was being cured just 100 miles from that city.
The Irish people do not like Canadian bacon. I must state that frankly. Many of them had not heard of it, and those who had did not like it because it did not fulfil their requirements. What is the trouble in that particular situation?
That brings me to the packers. If we are to go on eating the kind of stuff we have been eating-sows and stags and heavies -for the last five or six years here, I want to know that we are eating it to some purpose. That meat is as nourishing as the meat we send to Britain, so that when the minister sends it over he must have in mind not only the nourishment of the British people but, as our hon. friend would say, the capture of the British market and the holding of as much of the British market as we can hold in view of the better competition of the Danes, the Irish and the English farmers themselves. I should like to be sure that the packers are not now doing what they did six years ago, being quite careless and dilatory in the matter of filling their requirements for the British market. I found this, for instance. I found out that the British market likes what I would call short-cured bacon; I think the proper term is "mild cured" bacon. I do not know what we do with our bacon or what chemicals we put on it, but we certainly make it so that it will keep well, perhaps in order to keep it in the hot weather. The British do not like that sort of bacon; they like a mild cured bacon; and I would like to be assured-and I think I am, by something the minister said yesterday-that he is looking into the matter of increased cold storage facilities by which that bacon can be taken over in a greener or milder stage to fill the British requirements.
Another thing I discovered about British opinion of Canadian bacon was this, that they could not be sure of any uniformity when they got bacon. When they bought bacon from one Canadian packer they got bacon of a different cure than when they bought it from another Canadian packer. You know how conservative the British are in their tastes. When they want bacon of a certain kind they want bacon of that kind, and that is the only kind they will buy. It was astonishing to me to find that our bacon, which I had thought was pretty good, was, as I say, a very poor fourth on the British market. So that, if we are to make the sacrifice which we are making-and hon. gentlemen know that the quality of the bacon we, have been eating is something terrific; you cannot get decent bacon any more; I fancy we are eating
uvisxd romoN
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about 80 per cent of the rough bacon here. I should like to know from the minister what the percentage is.
That is about all I have to say on that matter. I should like, however, to direct three questions to the minister. I might add that during the war we did not mind eating that sort of bacon. If we thought we were doing our British brethren any good we would eat that kind of bacon or eat no bacon at all; but now that the war is over, the British will not be willing to take anything we care to send, or at any rate not for long. Just now they are in a condition where they are glad to take any piece of "sow belly" they can get their hands on.
Boiling this down to three questions, I should like to ask: first, what proportion of the bacon available in our Canadian stores today is rough meat of the kind I have described; second, what precautions are the packers and the department taking to see that there are proper facilities for taking to Britain the kind of bacon the British people want to buy; third, in a matter which the minister touched on to-day, relating to cheese, have we a thorough scheme of advertising in an attempt to hold the British market for bacon which our hon. friend says is in the process of being stolen from us?


James Garfield Gardiner: I will answer the last question first, with regard to advertising, while it is fresh in my mind. With regard to advertising, during the war it was illegal to advertise any food in Britain. Britain bought all the food, took possession of it whether it came in from the outside or was produced inside, and distributed it.


Robert Ross (Roy) Knight: I am assuming-


James Garfield Gardiner: I am telling what the facts are up to the moment. We were not permitted, neither were the Danes nor anyone else, to advertise. The food products belonged to the government and were distributed by the government. They did not permit anybody to advertise any particular product. They said that the people had to take what they could get.
With regard to the quality of the product, we have standardized the bacon during the war. The different packers are not permitted to make their own brand and send it to Britain; they must make bacon of a cure that is set, and that was established during the war. We hope to maintain it. Whether we shall have the authority to maintain it after the war is over is another question. I doubt very much that we shall have much opposition to maintaining it. We hope we shall be able to maintain the standard.

With regard to the quality of what we have been sending over during the war, that is one of the reasons why I am most anxious to get over to Britain at this time. There is still bacon there which was shipped over during the war period. The hon. member is quite correct in saying that we had a rather heavy cure on our bacon during the war'. We had to have that. In the first place, boats were irregular, and in the second place food had to be got to Britain and stored. Whether it was good policy as a rule to do that with bacon or not, it had to be put there in great quantities so that they could have it if there was a blockade. Therefore we had to put bacon over there which would keep. When they said they were going to have a ration for a certain period of time they wanted to know that it would be available before the announcement was made, and it required to be kept over a long period. Well, we were afraid of that condition at the end of the war, because stories started coming over that the Danish people were getting back into the market in Britain. They have not got back to any great extent yet, as one would expect, but they were getting back in a manner which would have done harm to this country. They started immediately to make their mild cure bacon, and send it to Britain. They did not need to advertise. As has just been said, the British people like that kind of bacon and all the Danish people needed to do was to put it there. We sent Mr. Pearsall over to Britain to go into that question immediately it started, and we got a definite understanding then that the Danish bacon which was put on the British market would be cured like our own, a heavy cure, so that it could be stored alongside our own as long as ours could be stored, and that the two bacons were going on to the market in the same way. In other words, we said that if the Danish bacon were to go on mild, then we had better start shipping ours over mild too, in which case it would have to be consumed immediately it got there. An arrangement was made, and I think it has been working out satisfactorily since, so that our bacon is cured in the same way as the Danish bacon, and they go on the market on the same basis.
As to what we can do in the future, I do not think we can maintain the position that the Danish people must always put thei! product on the market so that it will keep, just as long as our product. We start ours moving from Edmonton through to Halifax or to Montreal and we put it on a boat and ship it across the ocean. We are shipping our commodity in cars and at times along with other commodities. Foods take on taints perhaps quicker than anything else.

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We have not the same facilities for loading it in the boats that they have over there. Then their boats just carry bacon. They are built to do nothing but carry bacon. They take it across the North sea to Britain and unload it into facilities which are properly prepared for it. Their commodity does not suffer any great changes in temperature from the time it is first turned into bacon until it arrives on the British market. We must do that as nearly as we possibly can, but we cannot eliminate the distance which exists between Edmonton and London as compared with the distance between Denmark and Britain. Therefore we shall be at a disadvantage to that extent.
When I was over there in 1940 I met a man who I think is as good an expert as one could hope to meet. He was living in Glasgow; he was in the business and was appointed as the Scottish representative of the food ministry to handle all the food which came to Scotland. He told me definitely, as I said in this house before, that he had been eating Danish bacon prior to the war and never hoped to eat anything else, but for three months up to that time he had been eating Canadian bacon and that he would never go back to the Danish. He considered that Canadian bacon was as good as, and probably a little better than, the Danish, and he was going to continue to eat it for the rest of his life. I have no doubt that many people have come to that decision.
One or two statements were made with regard to the product which I do' not think are borne out by the opinion of the experts. For example, it was said a moment ago that these rougher forms of bacon or cured meats were just as good from the point of view of feeding people, giving them what is necessary for their nourishment as the higher quality, or what we call the higher quality of product. One thing is self-evident, whether one is an expert or not. The kind of bacon which the Danish people supplied to Britain, and the kind we tried to supply is a strip of fat and a strip of lean, a strip of fat and a strip of lean. The kind of product that we have been eating in Canada during the war lacked that extra strip of lean. If it is oil you want you can buy lard for twelve cents a pound. You do not want to pay forty-five cents a pound for fat. What you are really paying forty-five cents a pound for is the properly cured lean that is in the meat, and that is where the real food value is. It was not the fault of the packer that this other product was on the market. As a matter of fact, the packer prefers to put the best quality he has on the market where most of his product naturally goes. There has been great 47696-200}
competition among packers. There are two groups of packers. There is one group which exports, and another group which does not. Early in the war they were in competition with one another to the extent that they would come here and ask us to pass legislation for one group, which, if passed, might put the other group out of business. We said: "No, ve will not do that kind of thing." but that xe would have regulations which would make it possible for both of them to carry on, but they must carry on in competition.
I think that was best illustrated to me one day when I was out in the constituency of Humboldt trying to prevent the present hon. member for Humboldt from coming here at all. I was not successful, and that was his good fortune; but I was in a certain hotel one day and I thought the hotel-keeper was not any too friendly. He was sort of shying off to one side. Finally I went out and was going to go across the street. He joined me. When I got out across the sidewalk he became a little more friendly, and when we got in the middle of the street he stopped me where nobody on either side could hear what we were saying. He said to me: "I am a good friend of yours; I am a good friend of the government." He said, "I would not risk ask-ng this question inside the hotel, which I am going to ask you right here in the middle of the street." He said: "W'e are getting nothing to put on our hqtel table now but bacon that is made out of sows"

sow-belly, as my hon. friend said a while ago. He said: "Do you know that?" I said, "Yes, I know that." He said: "Who is responsible for that?" I said: "We are responsible for it. We told the packers that they had to send all the other pork over to Britain, and if we want to eat what we call bacon in this country it must be made out of something else for the time being. We take the responsibility for that." He said, "All right; I will explain it in that way. I was afraid to explain it in that way before."
I am not afraid to make that explanation. I know that sometimes even on trains, where you expect to get the very best, you got a little three-cornered piece of what looked like bacon and was cured like bacon. I made some inquiries to find out where that came from, and I was told that it caine from the jowl of the pig, off the jaw, and did not come from where the bacon usually comes at all. But we were eating it; we were getting a certain amount of oil out of it and a certain amount of lean meat, which to some extent at least met our requirements. I quite agree we should not have to eat that sort of meat after we get a little farther away from the war; but I repeat what I said yesterday, which some news-
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papers took to be a prophecy in connection with rationing, although I did not intend it in that way. All I said was that if we were to be able to supply Britain with as much meat as we did last year, we must have some restrictions on consumption in Canada. One of the restrictions we hadi some time ago meant that if we wanted to eat the same number of pounds of meat that we had been eating we would have to accept the things we were not sending to Britain. Some people conceived' ways and means of curing portions that were not previously made into bacon in such a way that they tasted something like bacon and perhaps gave the same service to a degree. But if that kind of thing is to be carried on, probably we shall need along with it what we had during the war, and that is a certain amount of control over the prices of the different cuts. I do not know how long we can continue that; but in any event our effort would be to get for Britain as high a quality and as great a quantity of bacon as we possibly can during at least the next twelve months, and at the same time we shall try to keep on our own market food sold in accordance with its real food value. That is about all I can say at the moment.


Robert Ross (Roy) Knight: The minister did not answer my first question, although I think it can be answered in a few words. I am well aware that we were not advertising Canadian bacon during the war; for one reason, even if we had been permitted we did not have to, because the Danish bacon was going to Germany and the British had no other place from which to get bacon. My question was whether or not the minister was going to take steps now to advertise our good Canadian bacon, as he has told us he has made plans to advertise cheese. My first question, the one I asked in the beginning, was as to what proportion of the meat on our home market is this rough meat, such as the minister has described.


James Garfield Gardiner: Last month we were sending ninety per cent of all the high-grade bacon and ham to Britain. That percentage changes from time to time. I think I said yesterday that in the period when the price went down we were sending ninety per cent of the high-grade bacon and ham to Britain, but that extended only over a short period.


Herbert Wilfred Herridge: In the legislature of British Columbia last March I brought to the attention of the provincial minister of agriculture the necessity for a better egg inspection system in the interior of that province. I pointed out that large quantities of ungraded eggs were being sold by the unorganized egg producers, and that something should be done

about the matter, although very little had been said during the war by the organized producers. At that time I was told that this matter should be brought to the attention of the federal government, that it came within their jurisdiction. Well, I am here now, asking the Minister of Agriculture what can be done in the near future to remedy this situation.


James Garfield Gardiner: That matter was brought to the attention of the proper officials of the department, and they now have under consideration the matter of putting in a better inspection system in British Columbia.
Mr. TOWNLEY-SMITH: To come back to the meat business for a moment, we have heard a great deal about the profits which have been made by western farmers, particularly, in the raising of hogs. I have always regarded those profits with some suspicion, for in my own case they were rather nebulous. I have a letter from the council of Canadian meat packers containing a table of hog production costs headed, "Is hog production profitable at present prices?" I wonder if hon. members would be' interested in hearing the farmer's break-down of' some of these figures. I will accept them without argument, because there is not time to discuss them. At any rate they show that it costs $17.20 to feed a hog to the marketable stage. Up in my country last year the young pig, the weanling, was worth $5 when it was six weeks old. Some sold for a little more, some for a little less, but $5 was the average price. So that if we add $5 to 117.20 worth of feed we get a total of $22.20. According to the figures contained in this table, a grade B-l carcass-and most of our carcasses are B-l-is worth $28.40, which gives the farmer a leeway of $6.20 between what he receives for the carcass and the cost of the pig and the feed.
This $6.20 has to take care of various things, such as chopping the feed; the interest on the outlay for buildings; occasional losses, because even pigs occasionally die; the hauling of pigs to the market and the hauling of feed, as well as the labour. If we apply that amount of $6.20 to labour alone we find that it covers a period of four and a half months or eighteen weeks during which the pig has to be fed. If you divide 18 into $6.20 it works out to thirty-four cents a week, or roughly five cents per pig per day, and that has to tak care of all these things. However, since this form was printed the market has fallen by roughly $2 per animal, so that we have to revise our figures, and instead of having a leeway of $6.20 we have only $4.20. That works out at twenty-three cents a week or 3^ cents a day, to take care of labour,

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chopping, outlay on buildings, occasional losses and hauling. Therefore, when the farmer comes in at night and breaks down this 3J cents under all these headings and figures out his income tax, he learns what profit he has made.


Mr. FULTON:: I have waited for a long time to reach this item; I have not tried to make this statement on something els,e so that I hope the minister will hear me now. What I have to say has to do with the price of hogs. I have a letter enclosing an article from the Western Producer of October 25 calling attention to the fact that immediately after the government announced that ninety per cent of all available bacon would be taken for export to Great Britain the price fell $1.25 per hundredweight. In order to explain this situation I wonder if the minister could tell me how the price for what we ship to Britain is set. I understood'-and I hope the minister will correct me if I am wrong-that the price paid the packers for overseas shipments is set by the meat board. If that is correct, will the minister explain what relation this price set for overseas shipments bears to the price which prevails in the domestic market, and how that price is arrived at. If the minister will answer that I will follow it up with another question.


James Garfield Gardiner: I think I dealt with that the other day; probably the hon>. member was not here.


Edmund Davie Fulton: I looked through Hansard and saw a reference to quantities but not to prices.


James Garfield Gardiner: The basis of the price the packer obtains is set not by the meat board but by an agreement entered into between the meat board and the British government. The meat board, acting for the Department of Agriculture here, enters into an agreement with officials of the food ministry in Great Britain that a certain price will be paid by the British food ministry for bacon, laid down at the port. They took delivery of it at the port and assumed all the risks from there on, getting it across the ocean. That has been the established policy during the war. The way in which that price has been set since 1940 is this. We went to Britain in 1940 and took the officials of the meat board with us, and we sat down with the food ministry in Britain and discussed the whole question, what they would require and what they could pay for it. At that time they said they would not pay more than eighty-one shillings per hundredweight for bacon laid down at Saint John. It would not have made any difference what we thought; we could
not get any other price. They said, "That is all we have to pay for it, and that is what it must be." We started from that basis. We said, "That price will result in our bacon going to the United States long before the end of this year." They replied, "We will deal with that situation when we come to it."
In May, 1941, our bacon would have gone to the United States, but the British government raised their price from eighty shillings to eighty-five shillings, and they intimated that that was the most they would be able to pay for the product during the war period. They said that if we were to give them bacon, the Canadian government would have to deal with any additional allowance that would have to be paid in order to keep it from going to the United States. That was before the United States came into the war.
We then paid as high as $3.50 per hundredweight in order to keep hogs in this country instead of having them go to the other side. When the price got up to that figure we came to the conclusion that we could no longer pay out of the treasury and therefore we placed an embargo on hogs going to the United States. We would not permit the export of hogs there at all. We took possession of the product and sent it to Britain. All I can say with regard to the price is that at eventually reached 113 shillings and we took care of it out of Mutual Aid. I would emphasize the fact that this statement of subsidies that we have here does not include things like that at all.
We have a list of subsidies paid on farm products running up to $258 million, but it does not include the amount of money taken out of Mutual Aid to make possible farm prices in Canada which we have experienced since the British came to the point where they could not pay more. That is true not only of bacon but of cheese and of nearly every* other product that we have shipped. Much of that amount is really subsidy taken out of the treasury and paid to the farmer to establish that price. That is the basis of the price, and that covers the part of the question asked as to whether this price was set by the meat board. That is the floor price. We buy everything anyone attempts to sell, at a lower price than that, in the way of bacon and ham, which is the greater part of the hogs; that establishes the floor price on hogs, and that price has never been below a reasonable variation between the price of hogs and the price of pork since the time we first entered into these agreements.
In addition to that, we have had a ceiling price since 1941. That is on pork products and not on hogs. In 1941, when we were

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back at the stage where the price of bacon laid down was at the lower levels I have spoken of, there was a very wide margin between the floor and the ceiling, and every year we increased that floor upward until we got it last year to where the variation between floor and ceiling on hogs amounted to thirty cents. The only variation you could have between the ceiling and the floor was about thirty cents a hundred on hogs.
As has been suggested, last summer, for a while, there was a margin of $1.25 between what had been established as the floor before and what was actually the ceiling. In other words, there was somewhere around ninety cents which people found it difficult to explain. Most of that is explained by one of two factors, and it lasted for only a few weeks and therefore did not affect greatly what had been happening during the rest of the year.
There could be only one of two answers. One is that somebody was bidding against the packer who supplied the bacon for overseas, for hogs in order to get the pork for the home market where there was a demand for it, where they could sell it above the ceiling; and if that were true, then there was .a black market in Canada just as there was In the -United States in the same period. We :are not responsible for that; we tried to -prevent it as far as we could. On the other hand, people were asking for bacon at the * ceiling price. They were asking for pork products at the ceiling price; and the purchaser *of these products being a packer, if you like, whether of the type that ships to Britain or of the type that markets his product in Canada, was saying, "We have had certain customers for a period of time and we want to keep them." There was nothing that said that there should be a ceiling or a floor in respect of hogs. It was established by the policy being carried out. But there was a ceiling on pork. The assumption is that, unless people were breaking the law, some of those purchasing hogs did pay prices higher than would be reasonable, if the ceiling on pork controlled the price of hogs, and so they got it to $1.25 above where it had been previously.
As I said the other day, the explanation called for is not as to why it came down but as to why it went up. The price is now on the same level as it was in 1944, and if it is maintained on that level we cannot say that the packer or anyone else is breaking the law in relation to it. We believe that somebody got outside the regulations in the short period of two or three months when we all ate all we wanted in Canada.


Edmund Davie Fulton: The explanation given by the minister has done much to clear up the point, but it raises another question. If I understood the minister correctly, he said that the basic price is set by the price arrived at between his officials and Great Britain. They indicated to the meat board the price they would pay and that went up as high as 113 shillings a hundredweight.


James Garfield Gardiner: - That is where it is now. It has been that way since February, 1944.


Edmund Davie Fulton: That was the basis -for
hog prices throughout Canada, and I believe the minister said that if anyone was quoting hogs at a lower price than that the department bought them at the equivalent of 113 shillings.


James Garfield Gardiner: I had better make that clear. We were prepared at all times to buy all the bacon in Canada cured in inspected plants on that basis, and the hon. member will agree with me that no packer would sell it for less when we were prepared to buy it at that figure. That established the floor.


Edmund Davie Fulton: This is where a further explanation may clear up the point. I find that 85 shillings a hundredweight comes to $18.72 and 143 shillings comes to $24.75.


James Garfield Gardiner: It is $22.50, to be
exact. I was speaking in terms of 112 pounds, which is the British hundredweight, and that makes a difference. The actual figure is $22.50.


Edmund Davie Fulton: Can the minister explain how that is related to the figures, quoted on the markets here for grade B, which is the general run, of $18.06 in September-which was the high for this fall-and $17.33, which was the low for this fall? That low followed the announcement that 90 per cent of all production would be used for overseas, and the producer cannot understand why, when the government takes hogs for overseas shipment at the comparatively high price the minister has disclosed, there should be a sudden drop immediately after the government announces that 90 per cent of all bacon produced would be sold at that price.


James Garfield Gardiner: Ninety per cent of the bacon is not ninety per cent of the hog. That bacon is made out of what are known as Wiltshire sides. You lop off the head and the feet and trim off a lot of other meat, and then what is left is called the Wiltshire side. You would require to have figures on all the different cuts that do not go into the Wiltshire side and what they were sold at.

Supply-Agriculture


Edmund Davie Fulton: This article in the Western Producer states:
Two weeks back, the meat board announced it would take ninety per cent of the hogs slaughtered at inspected plants (excepting sows and stags) for export to Britain. The prices paid producers by the packers immediately slumped $1.25 per hundredweight.
Not ninety per cent of the bacon, but ninety per cent of the hogs slaughtered.


James Garfield Gardiner: I do not know what article the hon. member is quoting, but what was taken was ninety per cent of the A and B hogs. Those are the hogs from which we wish to take the British bacon. We took ninety per cent of them off the market for a period of time in order to supply that extra amount which was asked for by the ministry of food. It would be difficult to take it and apply it to the total marketing of hogs in Canada in order to figure it out. The annual marketing review of 1944 summarizes it over a four or five year period.


Edmund Davie Fulton: I still am unable to understand why that drop should take place in view of the fact that the price set, in accordance with the minister's figures, was very much higher than that which prevailed immediately after the announcement- was made. Immediately the announcement was made the price dropped, according to' the Department of Agriculture figures, by an average of seventy-three cents.


James Garfield Gardiner: The fact is that the price dropped because it went up. It is another case of what goes up must come down. The price went up between May and August by exactly the amount my friend says dt came down. It started at a level between the floor and the ceiling for 1944 and the first four months of 1945. At the end of that time we said that we were not going to have rationing in Canada, that they could sell all the pork they like'd. Immediately those who were buying hogs started to pay more for them because they could sell them, not at the floor or not at the average but at the ceiling. Everybody in the business started buying hogs and selling them. There were no restrictions as to where they could sell them. A man would sell them out in the country to somebody who would bring them in to Toronto. During that period of time the price went up $1.25.
When we came back into the market again, in September I think it was, and said that we were going to have rationing, that we were going to have controls, these people could not sell hogs wherever they liked. They had to be graded under certain classes and this all
brought the price back to the level where it was before. As I say, at the end of the period it came down when these controls were put on again. Instead of selling most of our product in the home market at the ceiling, we were selling most of it at the floor in the British market.


Edmund Davie Fulton: I am not trying to be smart, but as far as I have been able to follow the minister's argument it would appear that the packers were getting away with something before he stepped into the market in September. That is the only explanation I can give for the fact that prices went up in the way that has just been described, and then came down again. Will the minister say whether that is correct?


James Garfield Gardiner: I would say that by any figuring we have been able to do the packers must have been losing money for a few weeks. They were supplying us with meat at a price at which they could not supply it when they were paying those prices for hogs. As I tried to explain a while ago, a business man will sometimes do that when he knows the price will eventually come back. I have not been able to make some other people believe it, but I believe myself that the packers did lose money.


Mr. BURTON:: Possibly I should have made my remarks a little sooner, but I just wish to assure the Minister of Agriculture that the next time he feels like coming to Humboldt to give our people information similar to what he has been giving the committee this afternoon, we shall have a better place for him to meet us than the centre of the street. I was pleased with the success of my friends in smoking out these questions into the open even if that had to be done in the middle of the street.
For many years I have had an opportunity of discussing the bacon situation, both domestic and export, with friends of mine. Some of them were bom and raised in England, have been over here for many years but have gone back home for visits. Others still live in England. When I ask them what they think of the possibility of Canadian bacon taking first place on their market their answer invariably is, "You will have to send us different bacon from the shrivelled stuff you are sending now." They tell me that the bacon which comes from Canada is thin and not the type that they want. I believe the minister and many other hon. members realize that a hog which is properly fed will give better bacon at 250 pounds weight than it will at 200 pounds weight. Many of the experts disagree as to
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that, but in my opinion I think a mistake has been made to emphasize getting thin hogs on to the market at too early a stage in their growth. I agree with the minister when he says that you do not want to pay forty-five cents a pound for fat or grease when you can buy lard at twelve or fourteen cents a pound, but I know that many a slice of bacon off a 200 pound hog has just as much or more fat than a slice of bacon from a 250 pound hog and there is not the same amount of lean meat.
I was wondering if the officials of the department could not help this situation by finding out what is the trouble. In my opinion the trouble is that we farmers, through force of circumstances, have been compelled to rush thin, young hogs to the market before they have reached their proper maturity and had got up to a certain weight. When those hogs are sent to the market you do not get the kind of bacon that the hon. member for Saskatoon City was calling for. I just wish to draw this matter to the attention of the minister. I know he cannot do anything about it now, but I think this is something that should be given consideration if we are to compete with the Danish people in the British market.


James Garfield Gardiner: Our weights are exactly the same as the Danish weights. In order to compete we made our weights the same.


Joseph William Burton: Is that all that is concerned in it?


James Garfield Gardiner: No; they are right and we are right.


Joseph William Burton: This is not just an isolated case. The British consumers of our product are complaining that they do not like the thin, shrivelled up stuff we are sending them. Denmark may have some system by which that weight is attained with a month or two added age. They would thus get a different type of meat.


Alexander Maxwell (Max) Campbell: Would the minister
explain why the bonus is not paid to the farmer who feeds his own grain?


James Garfield Gardiner: First, I do not know of any way in which it could be done. I know of no way whatever in which you could prove to the auditors of the department that' a man had fed a particular amount of grain to a pig or a steer. But that is not the reason why the position is taken. We are paying a far higher subsidy on meat or dairy products that are produced from the feeding of the grain than we are paying on the grain itself over and above the basic price, not only through
\*ir. Burton.]
what we got out of Mutual Aid but through these other subsidies that were put on Hansard yesterday. That makes it not only unnecessary but. inadvisable to our mind to pay a subsidy on what is fed to the animal. We pay the subsidy on the animal itself. We pay the farmer to feed the grain to the hog. We do not want to pay him, on top of that, another subsidy on the grain that he is feeding to the hog. The man who buys the grain also gets the subsidy, but nearly all of them are in eastern Canada; and to that extent it may be true to say, as one member did the other day, that some advantage is probably being given to the eastern feeder. If there is a feeder near Winnipeg or Edmonton or anywhere else out there feeding grain to his hogs, we make some allowance on the grain just as well as to the prairie farmer on the grain he buys. We would have had a greater outcry than we have over this if we had not done that.


Alexander Maxwell (Max) Campbell: I still do not agree with the minister. The department knows to a pound how much grain it takes to feed a pig.


James Garfield Gardiner: Nobody here will admit that we know because they are all asking whether it pays or not.


Alexander Maxwell (Max) Campbell: The fact remains that the farmer who feeds his own grain is under a handicap.


Percy Ellis Wright: Since the matter of subsidies has been raised I wish to make myself clear lest what I said the other day be misinterpreted.
A subsidy is paid on grain to producers in western- Canada and a subsidy is paid on the freight to eastern Canada. I am not objecting to these subsidies either on the freight or on the grain produced in western Canada, but when wm start to pay subsidies we very often upset the balance between our economies in different parts of the country, and that is just what is taking place with respect to these subsidies. Take cattle, for instance. At the present time the government is paying the freight on feeder cattle brought from western Canada to eastern Canada. The government also pays the freight on the feed grain brought east to feed those cattle. It seems to me that you are giving an advantage to the feeder in the east in that respect unless you are prepared at the same time to pay the freight on the finished product, that is on the cattle fed in western Canada and then brought to eastern Canada. If you are paying these two subsidies, the price of cattle should be the same on the eastern and

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western markets. There is no justification for the difference in that price when the production in the east is being subsidized.
I would ask the minister to take this matter into consideration, because it does place the western feeder and the man who has fed his cattle on the farm in western Canada in a different position from the man who has fed his own cattle on his farm in eastern Canada. I think they should both be on the same footing if we are to pay subsidies at all.


James Garfield Gardiner: What we are doing' is dealing with a particular problem. We say to the farmer in Ontario, Quebec and the maritimes:	If you will go out into the
drought area and buy cattle direct from the farmer who has not the feed to feed them and bring them east, we will pay the freight. That is done just because there is a lack of feed in that area, and we limit it to that area. I have no hesitation in saying that we also help to pay for the feed that comes here to feed those cattle. We are dealing with a temporary problem that has to do with the drought area. We would not want to apply that principle to the cattle that come east.


Mr. FERGUSON:: I would ask the minister if there is a penalty on packers buying pork hogs below the ceiling price?


Some hon. MEMBERS:: No.


Julian Harcourt Ferguson: No. Is there a penalty for selling pork above the ceiling price?


James Garfield Gardiner: Yes.


Julian Harcourt Ferguson: There is no penalty for buying at low prices standard hogs on which a ceiling price is set?


James Garfield Gardiner: There would be a penalty if the packing plant did not carry out that undertaking. We would not buy their bacon, and that would be the biggest penalty you could inflict.


Julian Harcourt Ferguson: I understand from farmers in my district that their prices fluctuate. If the packing house did buy below the floor price, is the only penalty on the packing house that you would not buy their product?


James Garfield Gardiner: That is the only one I know of, but it is the biggest one you could inflict on them.


Julian Harcourt Ferguson: If a case of a packing house buying below the floor price is brought to the attention of the government, what would the penalty be? Would the government refuse to buy any of their products, or would it refuse to buy say just two sides of bacon?


James Garfield Gardiner: Under the authority given to the meat board, to which some members of the house apparently were opposed the other night, the meat board can absolutely close up the packing plant?


Julian Harcourt Ferguson: The minister's memory must be better than mine as to what happened the other night, because everybody on this side was unanimous that controls on feed prices should be retained. There are other controls that were objected to, but no one objected to controls on food prices.


[Stage Direction]
Item agreed to.
Marketing service
[Stage Direction]
28. Marketing of agricultural products, including temporary appontments that may be required to be made, notwithstanding anything contained in the Civil Service Act, the amount available for such appointments not to exceed $15,000, $25,000.
Mr. FARQUHAR:: The farmers are very anxious to know just what is going to happen to farm prices now that the war is over. They have not forgotten what happened after the last war when prices dropped so low that many farmers never recovered from their loss. The farmers want assurance that this will not happen again. The minister has encouraged increased production of farm products, and the farmers have done everything possible to comply with his request until agricultural production has practically doubled. Farmers now find their barns filled with live stock. There are more live stock on the farms to-day than ever before in the history of Canada.


John Ritchie MacNicol: Hogs, too?


Thomas Farquhar: Are we to have losses on a scale similar to" those we experienced after the last war? That is the question the farmers are asking to-day. I have a list here of the monthly average for the years immediately following the war. In June, 1920, the average price for good butcher steers was $15.02 a hundred; in November, 1921, that price had dropped to $5.57. That is, in less than a year and a half prices had fallen almost two-thirds. I consider that the farmers have a right to ask, are we to have a guarantee that this will not happen after this war? The only wajq in my opinion, that it can be prevented is by floors under farm products.
I was greatly surprised at an article which appeared on December 1 in the Ottawa Journal, the Toronto Globe and Mail, and other papers, reporting an interview with Hon. T. L. Kennedy, minister of agriculture of Ontario. I am not going to read all the article, but only a small portion of it. The heading is:
Will demand agricultural controls end.
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It goes on:
Toronto, November 30-T. L. Kennedy, Ontario minister of agriculture, said to-day that he will demand immediate abolition of all war-time controls on Ontario agriculture when he appears next week before the agriculture committee set up by the dominion-provincial conference in Ottawa.
He said in an interview that the time had come to abolish price ceilings and price floors and let the farming industry find its own natural floor and ceiling.
That is, the minister says, in effect, "I don't want a guaranteed price on farm products; I want them to find their natural floors."
As1- I pointed out, that was the course of affairs after the last war. Prices found their natural floors, with a drop of almost two-thirds from the selling price during the war.
May I point out briefly what the government of Great Britain is doing in an effort to assist the farmers by guaranteeing prices for farm products. Mr. Williams, in the House . of Commons, said:
The government will establish assured markets and guaranteed prices for the principal agricultural products,-milk, fat live stock, eggs, cereals, potatoes, and sugar beet . . . The existing system of fixing prices for fat live stock, milk and eggs will be developed to cover the period after June, 1948, when the present guarantees would cease to operate. For these branches of food production, a new system of overlapping four-year periods with reviews will be established. Thus, in February, 1946, minimum prices will be established for the period ending June, 1950, and in 1948 prices for the period 1950 to 1952 will be set.
That is a guarantee price for seven years, to be continued from that time on.
There are some 20,000 applications for farm loans by returned men in 'the Dominion of Canada to-day. These young men who are buying farms are purchasing their stock and equipment at very high prices. According to Mr. Kennedy, if these prices are to find their floor in a natural way, how many of these soldiers will be able to pay for the farms they have bought? Surely these returned men. as well as other farmers, are entitled to some protection in the way of guaranteed prices.
I trust that the government and the Minister of Agriculture will pay no attention to the unwise and surely thoughtless demands of the Ontario minister of agriculture and that floor prices on farm products in Canada will be continued.


Ian Alistair Mackenzie: I think it is desired to introduce certain measures just before we adjourn at six o'clock. I therefore move that the committee rise, report progress and ask leave to sit again.
Progress reported.
CMr. Farquhar.]



INCOME WAR TAX ACT

[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce bill No. 234, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce bill No. 235, to amend the Excess Profits Tax Act, 1940.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce bill No. 236, to amend the Dominion Succession Duty Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce bill No. 237, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.'
[Stage Direction]
The house in committee of Supply, Mr. Macdonald (Brantford City) [DOT] in the chair.

[Stage Direction]
Marketing service-
28. Marketing of agricultural products, including temporary appointments that may be required to be made, notwithstanding anything contained in the Civil Service Act, the amount available for such appointments not to exceed $15,000, $25,000.
Wilfrid Garfield Case: In reply to the hon. gentleman who was addressing the committee when we adjourned I wish to say that the Hon. Tom Kennedy, minister of agriculture of Ontario, is a practical farmer who enjoys the confidence of farmers in particular and, I think, of the people in general, and it is pretty hard to judge his remarks on the basis of a news report. I wish to make this statement for the benefit of my hon. friend.


Mr. DESMOND:: What is to be the future of some of the specialized products of western

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Ontario? We have some problems there which are peculiar to our district. First, I would refer to our beans. As the minister well knows, a ceiling was fixed on beans early in the war, and it was fixed too low. Then we were subsidized to the extent of fifty cents. Later we were granted a price for the domestic consumption on yre basis of participating certificates. The exportable surplus of our crop, which we had committed ourselves to send to Britain, was paid for at the rate of $3, and we have been settling our participation certificates at the rate of nineteen cents. This afternoon one hon. member referred to floor prices, and I would associate myself with the statement made by my colleague the hon. member for Grey North in regard to the remarks of the minister concerning ceilings, floors and controls. When these controls are taken away, what will be the future of the Ontario farmer?
For a moment I should like to deal with another problem which is very close to us in western Ontario; that is, the matter of tobacco. Certain controls were set up in 1933 under the Natural Products Marketing Act. When that act was discarded in 1935, the growers, who were well aware of the extent to which they had benefited under it, organized themselves on a purely voluntary basis, on which they have been carrying on ever since. The successful marketing of our product was due largely to our control measures. It is true that we had a small exportable surplus, but the greater part of our product was consumed in Canada. We had production control. That may or may not be popular with the minister, but in connection with some of our specialized products it is important to the primary producer. So that I should like' to ask the minister what is to be our future, since in order to cooperate with all the regulations which apparently were necessary during the war, and in order to make a contribution to the whole country, we willingly gave up the control measures under which we had been working. When these prices come back, with our controls taken away, what assurance shall we have that we shall be given certain protection in the years that lie ahead?
We have another problem as well, if I am not going too fast. I mentioned that we had suffered because of low ceilings. I have mentioned the fact that we gave up our production controls. Hon. members have listened to a great deal of talk about wheat, but there has not been a great deal of talk about Ontario wheat. The price of our wheat was frozen at a level at which it is not economically sound to produce it iD western Ontario.
We produce wheat for the straw, silly as that may sound. To-day that wheat is selling at $1.09, and it costs more than that to produce. What are we to do in the future? Must we come back to the government and ask for the reinstatement of the control policy, which was acceptable both to the companies and to the growers? I may be rambling from one product to the other, but these are problems which are very close to the farmers of western Ontario.
If I may come back to tobacco for a moment, as I have said we were willing and glad to give up our production control for the sake of the war effort; but we convinced the people of one thing. In nine years of operation we increased the price received by the producer by from seven to nine cents; we maintained the level of dividends to the shareholders of the company, and we did not increase the cost to the consumer by one iota. We thought that was quite an accomplishment. If this system is to be discarded; if the companies are not convinced and will not play ball with the primary producers, it is time that these matters were brought to the attention of the government, because we are coming into days that will be extremely competitive. We do not know exactly what Great Britain will do in the matter of preferential tariffs, and so on, so that I would ask the minister if there is any assurance that in future these specialized products will be protected.


James Garfield Gardiner: The question raised by the statements just made is one that is vital to agriculture in this country. I think I should repeat what I said the other day to the conference of representatives of the nine provinces and the farm federation. I may be wrong, but I do not know of any line anywhere in the world more completely closed against the international marketing of products than is the Canadian-American boundary line against the marketing of farm products. During the war, because of restrictions which were found necessary in order to retain food in this country either for our own use or for the use of our allies, particularly Britain, we completely closed the United States boundary line. You just cannot ship anything out of this country into the United States. As against that, it can be said that if you were to open the boundary line to-morrow, with conditions as they are at present, inside of one week we would be pleading for food in every part of this country. The food would just disappear from this country within a week. It would go to the markets of the
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United States and be sold there, unless we did something about our price levels as related to those in the United States.
In my opinion that is the present situation. I believe it is recognized by everyone that with beef prices, I think it is reasonable to say, three cents higher in the United States than they are here, and with prices of all other products similarly higher, if you were to open the market and let everybody ship their products to the United States, then food would just disappear .from this country. We would have great difficulty in maintaining enough food here to feed our own people. We probably could not do so. I think we are all agreed that that is a condition which could not continue very long. We have been listening to a discussion here for the last two or three days, and as Minister of Agriculture I have not had sufficient time to give adequate study to the question debated, but there are a few essential principles which I think apply at all times and some of these have been under discussion. I think it is obvious that we have to find something that will stabilize our values in the different countries at some early day. I am not prepared to say whether that should be the gold standard, or what it should be; but I think I have benefited sufficiently by the experiences of the last six years, when everything has been done by putting on controls of one kind or another to satisfy a particular group in some particular country for the time being in order to meet their own situation, to recognize that if we are ' to be afflicted now with that sort of thing after the war is over, if we are to go on without a regulator of some sort, there may be some danger ahead of us much more serious than even the gold standard. We might encounter some serious difficulties in getting back to the position to which we wish to revert in the .period of peace. At any rate that situation exists to-day, as far as agricultural products are concerned. There is a difference between the marketing of agricultural products in the United States now as compared with five years ago, a difference in values placed on everything as between one side of the line and the other, and beans is one of these commodities.
When my hon. friend and his delegation started to come here first to talk about marketing beans, the price of beans in Michigan was double what it was in this country, and if it had been possible to sell beans in the United States the price would have immediately gone up. But in the negotiations then going on to meet the situation in the United States and Britain we were asked to export our own beans and we went directly to

Britain and arranged a price. That price was satisfactory to the bean growers in western Ontario as long as they could buy what they wanted at the prices arranged for under present price controls, but it would not be satisfactory if they had to pay the same prices for what they wanted to buy as paid on the United States side of the line.
That is what we are talking about when we speak of the transitional period. That period will not come to an end until these questions are dealt with by somebody somewhere, and in the meantime it is my conviction that we have to maintain the position that exists in western Ontario and everywhere else at the expense of all the people of Canada until such time as we can get the situation adjusted to the place where we can trade as we used to trade and where we shall have values equalized on the two sides of an imaginary line such as exists from one coast to the other of this continent.
One can speak of relationships with Great Britain. There are other factors that operate there, and all these have to be adjusted. While they are being adjusted, we expect to apply the terms of what is generally known as the floor prices act passed in the last parliament preceding the election. We intend to see to it that the position of people such as the bean growers and others is safeguarded so long as it is necessary to safeguard it during the period when we are adjusting this condition which has been created by the war and for which the people themselves, who feel the effects of it, have had no direct responsibility.
The government^ all over the world have done the things they thought necessary to win the war, and now that the war is won we have to give consideration to these matters that have been brought to our attention by the hon. member whether they deal with special products or the products that we are producing in greater quantities and are being consumed. That is the intention of the act passed a year ago and the spirit of that act will be applied. We believe that if we apply it in that spirit we can maintain a relationship similar to that which has prevailed in the last two or three years.


[Stage Direction]
Item agreed to.
Special-
29. Prairie Farm Rehabilitation Act and water storage, $2,000,000.
William Irvine: There is a question which I wish to ask the minister. It has reference to a serious situation in the Peace River block. If we were not so pressed for time, I would go into details, but I will content my-

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self for the moment with reading a resolution I have received from the Peace River Improvement Association. It will bring the matter to the minister's attention, and I can then ask the question which I should like to have him answer. The resolution reads:
Whereas, farmers throughout 'Canada are being urged to produce the maximum of beef, pork, lamb and dairy products, and, whereas, the farmers of the British Columbia block of *the Peace River district have responded to the extent that in 1944 over one million dollars worth of live . stock were shipped from the block.
And, whereas the aforesaid farmers are anxious to maintain and increase that production.
And, whereas, this objective cannot be reached owing to the drastic shortage of water for stock and even for domestic use.
And, whereas, these farmers have been contributing to the P.F.R.A. since it was started.
And. whereas, the aforesaid farmers are financially unable to bear the entire costs of constructing stock-watering dams and dugouts.
And, whereas, people of this district have learned with considerable interest, of the very valuable work and assistance in this respect, given to farmers and ranchers of the prairie provinces,
Therefore, be it resolved that we, the members of the Peace River improvement association, respectfully urge the Hon. J. G. Gardiner, Minister of Agriculture for Canada, to make provisions of the P.F.R.A. Act applicable to the province of British Columbia, in order that farmers and ranchers in this province be afforded the very great advantages and benefits which could accrue to them from policies_ that are available under the act, with particular reference in our case to the plan of assistance in locating suitable sites for and in the construction of stock-watering dams and dugouts.
The question I wish to ask is this. Can the minister extend the benefits of the Prairie Farm Rehabilitation Act beyond the limits of the Palliser triangle without further amendment to the act itself? If not, h^s he given consideration to the extension of the act beyond the prescribed limits or the application of it to all the provinces? Would the minister make a statement?


James Garfield Gardiner: I think I can state in a few words what the present position is. As the name of the act indicates, it was intended only to deal with prairie farm rehabilitation. The act does not say definitely that it must be applied to the Palliser triangle, but it does suggest and the spirit of it is that it shall apply only to what is generally known as the drought area, and we try to confine it pretty much to the Palliser triangle. We were approached by all the provinces, and it certainly was recommended by a committee of the house during the last session that we should extend the principles of the Prairie Farm Rehabilitation Act to all Canada. If
we were to do that, it would involve a material change in the responsibilities of the provinces in relation to a number of problems as compared with the responsibility of the federal government.
I think everything we are doing under the P.F.R.A. is, under our constitution, the responsibility of the provinces. The only reason that responsibility was accepted by the dominion when the act was first brought in in 1935, and when I brought in amendments in 1936 and 1937, was that we had induced people to go into an area that we knew to Ire exceptionally dry, and having induced them to go in we had a responsibility to reestablish them, now that the situation which we - had reason to expect at the beginning had been proved to be true. So we started out to reestablish them and we said that, irrespective of the fact that these were provincial obligations to people who had established themselves on land within the boundaries of the province, we would do. this particular thing.
If we are to assume new responsibilities in all the provinces, it seems to me that that question would be bound up in the larger question which is now being discussed at the dominion-provincial conference. It has been submitted to them and it is under discussion at the present time. If it is determined that there is to be a redistribution of funds and the sources from whi<:h funds come as between the provinces and the federal government, and that takes a certain direction, then I assume that we shall take on some of these obligations in a dominion-wide way. If that is done, then it would be quite reasonable to expect to extend the areas in the three western provinces into the north outside of what is generally known as the drought area, as well ' as to extend them into other parts of Canada.
I should like to make myself perfectly clear on that. I do not think an act such as the Prairie Farm Rehabilitation Act could be extended to ail Canada. Probably, if that policy were followed, we would have to have . the present Prairie Farm Rehabilitation Act renamed and perhaps redrawn and apply it to the four western provinces. Then we would have to have another piece of legislation which would apply to the provisions east of the great lakes. I think the administration of works which would. be carried- on in western [DOT] Canada under a policy of that kind would have to be in western Canada, probably where it is now at Regina which is pretty central. We would then have to have another administration set up in eastern Canada to deal with eastern problems under a separate act.
I doubt if we could administer the whole
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thing under one piece of legislation, because the problems here are so different, although the principle is the same. That is all I care to say at the moment.


John Ritchie MacNicol: I am going to refer only to the last two words of the vote, "water storage." In doing this, I should like to lefer to an article which appeared recently in the Moose Jaw Times-Herald of September 17. which referred to an article which had appeared in the Regina Leader-Post of September 15. These articles refer to a serious condition that exists in connection with the water supply of Regina. The Moose Jaw Times-Herald, in referring to the proposal to build a dam on the Saskatchewan river which would permit the taking of water to Regina, says:
The project is a large one, and it ds not primarily proposed -as -a means of supplying the cities of Moose Jaw and Regina with -a visible and abundant water supply. The primary purpose is to provide water for irrigation of an immense acreage of farm -land -and the development of hydro electric power.
The article in the Regina Leader-Post of September 15 is headed, "City near limit of water supply," and reads:
Regina has pretty well reached the limit of her present water supply, J. W. D. Farrell, waterworks superintendent, said Friday.
Deep artesian wells from which the city has been taking its water give between 5,500,000 [DOT]and 6,000,000 gallons a day on the average. This summer the city could have used 7,000,000 gallons a day, if the quantity had been available.
What I have to say has to do with the water supply for these two cities. I have made a most extended survey into the problem as it affects these particular cities, and I maintain that the Dominion of Canada is responsible for this lack of water. I am not blaming the minister because I realize that he has done a job in solving problems, quite apart from the P.F.R.A. work to which I am not going to refer. An effort has been made during the last few years, I have no doubt under the minister's orders, to supply water to Moose Jaw. I think what has been done proves that water can be taken from the river to the city. During the past summer water was pumped over the bank of the river near Riverhurst to a total of 1,375 million gallons. But of that quantity only about 191 million gallons reached the Caron basin from which Moose Jaw draws its water. That showed a loss of the difference between 1,375 million gallons and 191 million gallons. This was due to the fact that an open ditch was used. I am not finding fault with that;
I am simply urging the minister, now that -it has been proved that water can be taken

from the river to Moose Jaw, to provide an adequate and proper system. That is what these two newspapers ask for in'their articles and I am going to support them.
They referred also to irrigation, but I am not going to touch on that problem tonight. However, I wish to say that I am in favour of irrigation between the river and Regina. I suppose before the dominion government could really enter into such an irrigation project there would have to be agreements with the three provinces that control the Saskatchewan river. This could be carried on under a Saskatchewan river authority. When the construction of Regina, and perhaps Moose Jaw, was first started, permission was given to take 100 cubic feet a second out of the Saskatchewan river, which is a much larger amount than these two cities are using to-day. As I said before, Regina is using at the moment about 5,500,000 gallons a day, and I presume Moose Jaw would use between 3,000,000 and 4,000,000 gallons a day, provided that they can get it, but that is not always the case. That would be less than twenty cubic feet a second, so that the original agreement entered into when these provinces were set up and which allowed 100 cubic feet a second would be ample.
I should like to see the minister bring in an item, not for $2,000,000 but for between $10,000,000 and $20,000,000. It should be at least $10,000,000, because to build a dam on the Saskatchewan river would cost $6,000,000 in any event, and perhaps a little more under present-day prices. I would suggest that if the minister does bring in a vote in another year to build a dam on the South Saskatchewan river, he keep before him a dam at that point which in the future could provide water for irrigation purposes for the district between the river and Regina, or right down to Este-van. The dam would be amply large enough to take, care of that, 'because the reservoir behind it would be approximately 75 to 100 miles long, and would conserve a large number of billions of tons of water. The water supply situation of Regina and Moose Jaw is serious. Regina is taking water from three different areas, from Boggy creek, from Mallory springs and from Mound- springs. Some time ago I read ani engineer's report which stated that by the constant drawing of water from those areas and the deepening of the artesian wells that receive supply from the whole prairie roundabout, the water plane of the whole prairie roundabout is being lowered. If that is true, it must have an effect on the farms roundabout. In my judgment, we should not delay in overcoming the lowering of the water plane, and I will support any

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reasonable vote which the government brings in to relieve that situation. The sooner we commence, the better.
I would suggest to the minister that he bring in a vote that will be sufficient, first of all, to build the dam which the engineers say they have found a base for out there, and there is no trouble ini building a dam if you build the base wide enough, as they did on the Tennessee river. The dam should be built large enough not only to provide a reservoir of ample water for these cities for all time to come so long as the world lasts but to provide irrigation water if and when the proper body is set up to see that these irrigation works are carried out. It does not require a special body to be set up to construct a dam or to construct conduits from the dam to Moose Jaw and Regina. The department can do that itself through P.F.R.A., but legislation would likely have to be brought in to construct irrigation works between the river and Regina or right down to Estevan. I would urge first that we build the dam, and, second, construct conduits. The water would have to be pumped over the river bank. I would not recommend a dam 310 feet high at that point, because there would be too much pressure, but a dam 150 feet high could be constructed, and I would recommend that the water be carried in a conduit built of British Columbia cedar or pine; I forget just which is used in the building of conduits, but British Columbia timber is used in making irrigation conduits in that country. When British Columbia cedar is used the frost has no effect, but a conduit made of steel would be affected by frost.
As an easterner who in my business life profited greatly, not personally, but through the company with which I was associated and others, by the opening up of these cities in the west and through the effect which that had on the development of the prairies, I consider it my duty to urge the minister to bring in a vote for whatever amount is required to place these two cities on a proper foundation as far as their water supply for domestic purposes is concerned and as far as their water business requirements are concerned. See what happens to-day! The cost of the water for Moose Jaw, for instance, is much higher than it should be, through no fault of the department and no fault of Moose Jaw. If Moose Jaw and Regina could obtain water for domestic purposes at a low rate it would induce manufacturing concerns to establish themselves there; that would help to build up the west, and the more the west is built up through the development of cities, the
better it will be for all down here in the east. That is the doctrine I have preached right along, because I have been through it. I have seen how business has profited in the east and in the country generally through the opening up of the west, and I am convinced that if we could put these two cities on a proper basis as far as their domestic water supply is concerned their populations would be tripled and quadrupled in number as they should be, and that would help to develop the whole country.
I say to the minister: Do not hesitate; do not be too humble in asking for sufficient to do that job. Give these two cities a chance to live by supplying them with an ample water supply. If that is not done, the water plane all roundabout may go down and down and down, and that can all be prevented by bringing the water from the river.


Percy Chapman Black: Mr. Chairman, I have availed myself for several sessions of the opportunity offered by this vote to discuss particular problems in the maritime provinces. at the head of the bay of Fundy. I would refer to our marshlands. I do not believe that there has been in this house a proposal which has received such unanimous support and one about which so little has been done. I know that the minister himself has expressed his approval of framing a policy to deal with these marshlands, comprising from 100,000 to 150,000 acres which require protection from the sea, drainage, and tc be reclaimed. That word which we use so much in the post-war period, rehabilitation, certainly applies to this area. We have now arrived at the point where there should and must be some declaration of policy as to what is to be done with respect to this undertaking. Our people and the owners of the land want to know what is to be done, and it is certainly in the interests of the entire eastern part of Canada that there be a decision soon. We expect that it will be favourable.
Not only has the minister himself expressed his approval of the purposes and objectives of this undertaking but also the officials of his department, including the deputy minister, and the director of experimental farms, who comes from eastern Canada and who is so capable and understands the special problems in the east. These men have given it their approval. The director has authorized special development work and experiments at the experimental farm at Nappan. The superintendent is Mr. W. W. Baird, who has done special work in draining and cultivating this land, and with exceedingly satisfactory results,
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securing three to four tons per acre of the very best hay for fodder purposes. Up to the present nothing has been done except to expend a few thousand dollars in conjunction with the provincial governments and the marsh owners in restoring breakages in the dykes. The Nova Scotia legislature has gone on record unanimously as favouring the reclamation of these lands. The New Brunswick legislature has done the ' same. Expremier the Hon. A. S. MacMillan, of Nova Scotia, .came to Ottawa and gave evidence before the committee on reconstruction and reestablishment. Hon. John A. McDonald, now Senator McDonald, who was minister of agriculture, came here and gave forceful evidence in this connection. Mr. McDonald was probably the most energetic minister of agriculture of any province in Canada. He never spared himself in advancing the interests of agriculture, and he strongly recommended action. The matter was dealt with before the committee on reconstruction and reestablishment in 1943, and a unanimous report was brought in recommending that something be done. That report, which was brought down to the house on January 26, 1944, and unanimously adopted, states that the committee has given a great deal of thought to the economic situation of the maritime provinces. It recommends that improvement be brought about "through assistance to the farming community, by the application of the provisions of the Prairie Farm Rehabilitation- Act.'' The argument made before that committee was that with an expenditure annually of $2 million, aggregating up to the present time $20 million, valuable work had been done in the west, and that work should be done on these fertile marsh lands in the [DOT]east. That was the conclusion in a unanimous report of the committee, submitted to parliament and adopted unanimously.
We also have reports and recommendations from boards of trade and other public bodies, along the same lines. We had a visit by the leader of the Progressive Conservative party (Mr. Bracken). He made a thorough personal investigation of the conditions. He went down on the marsh to look through these aboideaux, and made inquiries, and examined the land. I am going to read from a statement made by him. Although I have not his authority to repeat it here, it is on record. The leader of the opposition said:
As a long-range policy, we propose to have the present Prairie Farm Rehabilitation Act extended throughout -the farming areas of Canada, so -that it will become national in
(Mr. P. C. Black.]
scope. Just as drought areas are being reclaimed in western Canada, so, under a revised act, marshlands may be reclaimed from flooding in Nova Scotia and New Brunswick.
You have a big problem in the marshlands at the head of the bay of Fundy and other places, an area comprising some 150 thousand acres of marshlands . . . We propose, however, that the dominion share with the provinces of Nova Scotia and New Brunswick the cost of continuing -this reclamation.
Any present surveys should be reviewed; any necessary further surveys should be made at once. We shall share with the provinces the cost of such studies and we shall assist by generous financial aid the reclamation of these
A brief was submitted to the royal commission, known as the Dawson commission of Nova Scotia, from which I am going to read some recommendations. I do not say that these are final; I do not say that they should not be modified, but they constitute the basis of the representation made to the Dawson commission, and I understand that the commission reported favourably upon them, although I have not seen the report. The brief was presented on behalf of the agricultural society and on behalf of the board of trade of the town of Amherst; it had also the support of the board of trade of Sackville, the adjoining town. The chief requirements are:
(a)	The opening up of the main drainage rivers and canals, now blocked by sediment and vegetation. This is a machine job and should be done by the federal authorities.
(b)	Dykes and aboideaux should be built and strengthened. This was formerly done by hand labour, but now must be largely a machine operation and the federal government should assume considerable responsibility.
(c)	The main vent ditches -must be reopened and new ones dug. This too is now a machine job and might well be assisted by the provincial government.
(d)	Small drainage ditches- -must be dug wherever the marsh is cropped. The owners should have this responsibility but special ditching machines should be designed and supplied by the provincial government on a moderate rental basis.
(e)	A large supply of lime and some special fertilizer should be made available at low cost.
(f)	The land would in great part have to be ploughed and reseeded by the owners.
(g)	The marsh roadways require rebuilding and maintaining and the provincial government should assist in this work.
(h)	Marsh areas should be organized into as large bodies as possible, having natural boundaries and similar conditions. -
(i)	The more remote acreage in considerable sized blocks in different districts should be taken over by the government and improved for use as community pastures, such as has been done in the west.
These are general recommendations. I am not expecting that they will be adopted verbatim. They should be the basis upon

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which a policy should be decided by the federal government with the cooperation of the provincial governments and in collaboration with the marsh owners, whereby this land would be reclaimed. It means not only the cropping of these fertile marshlands which grow three tons and more an acre of the best possible hay and clover and grain, but the building up of the uplands to the extent of two and three acres for every acre of marshland. Instead of retrogression, there would be development and prosperity where one finds nothing now but decay, a blot on the whole countryside. As to the amount of money which is asked for, and which I believe I can quote the minister as saying that he favours it is a very small amount in comparison with the sums we are voting at this time. A few days ago we voted $750 million in export credits in order that we may trade and assist other countries; and under the Bretton Woods agreement, which is still before the house, it is proposed to vote $300 million for an international monetary fund for world stabilization, and the establishment of an international bank for reconstruction and development-an additional amount of $325 million, plus United States exchange. So that the amount we ask for, $250,000 to $300,000 a year for that whole area at the head of the bay of Fundy, is a small 'amount in relation to the enormous expenditures being provided in this parliament, and in relation to the enormous amounts that we of the eastern provinces have supported and voted for under the prairie farm rehabilitation schemes since 1935. Up to the present time they have amounted to $20 millions. What the people at the head of the bay of Fundy, the provincial government, the municipalities and the marsh owners want is some declaration of policy, some prompt action in order that something may be done to enable them to know what to plan for. It is not something that can be done in a day or a year; it is a policy that should be put into effect and applied over a considerable period of time, so that the people in that whole area may gradually build up and reestablish what is one of the best stock raising centres in eastern Canada.
When we were dealing with the estimates of the Minister of National Defence, Army, I requested that some of the explosives which were being destroyed, because we have no further, use for them, be used in opening up some of these drainage ditches. Some of the newspapers did not take my suggestion seriously. I wrote to the department of agriculture in Washington and they sent me the United States department of agriculture
"Farmer's Bulletin, No. 1606." I shall quote a few sentences from that report. On page 5 we find the following:
While ditching with dynamite is possible under almost any conditions, it usually is economical only for making small ditches or cutoffs in stream channels, in soils other than gravel and dry sand. The most economical size of dynamite ditch is about three feet in depth and eight feet in top width; much larger ditches can be built in this manner but -the cost per cubic yard of excavation increases rapidly with the size. The ideal material for dynamite ditching is a saturated sedimentary soil that is firm but not as stiff as the hardest clays and is free from stumps and large roots.
The marshlands contain ideal soil in which to use this explosive for that purpose. I go on:
Many excellent ditches have been blasted under conditions quite different from these, but at increased cost. Where conditions are such that the work is adapted to any one of the several types of ditching machines, it generally is not advisable to use dynamite, but usually it is much cheaper to dig ditches with dynamite than with hand labour.
Then on page 6 we find the following:
The proper size and spacing of charges to give a clean-cut ditch of the desired depth must be determined experimentally for each set of conditions. This can best be done by firing a number of single charges, and when a size of charge is found which gives a smooth crater of the desired depth, a little less than the half diameter of the bottom of the crater will be the proper distance between charges . . . The proper distance between charges . . .
Then farther down:
The cost of ditch excavation by dynamite varies greatly. Under favourable conditions a pound of dynamite will blow out from one to two cubic yards of earth, making the cost for the explosive from fifteen to thirty cents per cubic yard. Very little labour is required for such ditching. A gang of four men will load and shoot about six hundred linear feet of singlerow charges per day. It is usually necessary to remove debris and smooth the sides and bottom of the ditch with shovels after blasting. This work should be done as soon as possible, and if done promptly should not cost more than one cent per linear foot of ditch. This method is very useful for straightening streams.
I am not going to say anything more except that we have enormous quantities of surplus explosives in this country. Much of this explosive must be destroyed. I ask the Minister of Agriculture and the department if they will not make an inquiry to see what can be done toward utilizing this waste explosive in opening up these drainage ditches on our marshland. I ask the minister and the department to announce their policy- I know he cannot do so now, but in the near future. For myself, I am going to support this vote to-night. I have supported it ever since I came to the house; but if something is not done in order to' do justice to eastern
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Canada, to reclaim the mashlands at the head of the bay of Fundy, which contain 100,000 to
150,000	acres of the most fertile land in Canada, if I am here next session I shall move that the vote for the prairie farmers be reduced from $2,000,000, or whatever it is, to one dollar. I plead with the minister, the house and the government to take some action to announce some policy in conjunction with the provincial governments, and the marshland owners.


Mr. COLD  WELL@: May I just say a word. To-night we have wandered from Peace river and the prairies down to the Atlantic coast. Everybody who has spoken has had a pretty good case to put before the Minister of . Agriculture in relation to water conservation or drainage. I suggest that when the next session comes around there should be a thorough discussion in this house or in the agriculture committee regarding the possibilities of water conservation, of irrigation and of drainage in various parts of Canada.
Some years ago in 1937 or 1938, I went into the problem of water conservation in Saskatchewan, and made a speech in this house which was criticized because it involved large sums of money, $30 or $40 millions as I remember it. I was glad to hear the hon. member for Davenport raising the problem of the utilization of the waters of the South Saskatchewan river and the use of that water not only for supplying the cities of Moose Jaw, and Regina with a good water supply- and I mean a softer water supply than Regina has-but for irrigating a large section of the country particularly south and east of the South Saskatchewan river.
When I was looking into the matter with a view to saying something in the house I remember that I had an opportunity of being shown by engineers the contours of the country from the place where the hon. member for Davenport suggests a dam should be built right down as far as Weyburn and Estevan. It was amazing to see that natural channels could be used for that water and the irrigation of a large section of Saskatchewan which I was told at that time could be done economically.
As far as the water of the cities is concerned, I had not seen this newspaper report from Regina. I know the condition in Moose Jaw. I happened to be on the city council when the last water supply was brought in from Mound springs. I think one of our dominion officials assured the council at that time that we were obtaining enough water then from Boggy creek and other sources for 125,000 people.
[Mr. P. C. Black.1


Mr. SMITH (Calgary West):: Where is
Mound springs?


Major James William Coldwell: It originates in the
Maclean watershed. Apparently what happened is that the pumping of the artesian wells, which was also advised by another engineer, but not one of our own departmental men, has depleted the water in that natural reservoir. These are problems for Moose Jaw and Regina, but problems which are linked up with the whole of the water conservation policy of our country. To my mind, the thing we should do is to endeavour to get a thorough understanding of what we can do in this prairie region in the way of irrigation. I would say that the minister has introduced into western Canada a useful water conservation policy in the Prairie Farm Rehabilitation Act. However, it is too small, although probably it was as much as the country would accept at that time and as much as this house would accept then. With the fertile land we have, which at times lacks water to produce crops. I believe there is a very fine field for reconstruction projects following the war, for the giving of employment and so on.
Before I sit down, may I just say to the hon. member for Cumberland, who has made the plea he always makes, and properly so, on behalf of the marshlands of the provinces of New Brunswick and Nova Scotia, that I hope he will not suggest at any time that the amount appropriated for P.F.R.A. or any other project which is valuable to any section of Canada should be reduced. We remember, of course, that the two maritime provinces mentioned have received very considerable subsidies over a period of years for coal freight rates and other things, and we never objected to that because we believed it to be in the interests of the economy of Canada or we would not have supported it. And because we believe this water conservation proposal is in the interests of Canada we are prepared to support it and to urge it in this parliament. I am suggesting to the minister that at the next session the experts in his department and those in the Department of Mines and Resources, where I believe there are some persons interested in conservation, perhaps together with some of the young men who have done a great deal of investigation into the soils of western Canada and their probable productivity if properly supplied with water, be brought before the committee and we try to formulate, in cooperation with the government and then in support of a government policy, a water conservation policy for western Canada and a policy of reclaiming the marshes of the maritime provinces, so that we may

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make the whole country more prosperous and give many of the young men who are coming back an opportunity to earn a decent living on the land.


Arthur Leroy Smith: I am sorry to be so much in agreement with the leader of the C.C.F. party and to-be even so slightly in disagreement with the hon. member for Davenport, whom I and all the other people in western Canada believe to be the eastern statesman most sympathetic toward our part of the country; and I hope he heard me use the word "statesman" rather than "politician." We have heard a great deal about supplying Regina and Moose Jaw with water. I was in Regina when they got their first water supply; my father was mayor of that town, as it was then. The first wells were drilled at Boggy creek, six or seven miles to the east. We were rather worried about ourselves for a number of years, because they were drilled on a farm belonging to a Mrs. King. The people of Moose Jaw, who were jealous of us because they had no water then, said that we in Regina were drinking Mrs. King's water, and that is how the thing came about.
This scheme to bring water from the Saskatchewan river at a point near Riverhurst is not new, but I am going to make a suggestion to those people who want this government to spend that money. If the government appropriates money to give the cities of Regina and Moose Jaw a water supply, why should they not do the same for any city, town or village in Canada that requires it? I say this in the interests of the minister, because there are differences in jurisdiction. If we are to centralize everything here, then let us vote the money, which after all is the money of other people since not much of it belongs to us; let us vote it and do all these things, but let us realize that there must be a limit somewhere to government spending. I wish I could think of something in my own constituency for which I could ask the minister. I see the hon. member for Lethbridge almost glaring at me now, but we are rather a perfect constituency and do not need anything. You see, we kind of look after ourselves rather well. That, of course, is an exaggeration.
We have heard a great deal in this house about irrigation, [DOT] I am all for it; let there be no misunderstanding about that, but let us take the history of irrigation in western Canada. It begins and ends largely, I think, in the province of Alberta. The Canadian Pacific Railway company began it. They spent their money and had two districts, the
eastern district, which is the Brooks area, and the western district, which centres on the towns of Strathmore and Gleichen, just east of the city of Calgary. What has happened? They did their best with it; their engineers did an excellent job; but about eight or ten years ago the Canadian Pacific Railway company were very glad to give to what we now know as the eastern irrigation district everything they owned: ditches, houses, machinery and land, the whole works and $400,000 in cash to help them carry on. It is true that it is well operated and getting well on its feet, and this is the reason. While the farmers in that area would not pay the C.P.R., the directors of that show see to it now that everybody pays his water rates and taxes, so that it is a successful show.
Keep on a bit to the west and you come to the western block of that district. What happened? I was before the committee of the whole in the Alberta legislature, I think within the past year. What is happening there? Again the C.P.R. are giving to a newly formed district the whole works, everything they own, together with an amount in cash. I cannot remember the exact figure, but in any event it is somewhere between $300,000 and $400,000.
We speak of irrigating from the Saskatchewan river through Regina and Moose Jaw down to the Weybum and Estevah area. I have no doubt the slope of land is there, or the engineers could not have found it. But take that western block. Not five per cent of those persons who originally paid water rates are paying them now. Why? Because they do not need the water. The rains came, and that has been a prosperous area. So that within the past year, with Mr. Brownlee in the lead, what have they done? They had to go to the government to have this thing formed. There were certain persons who had paid their water rental and who, for the lifetime of their contracts, which was almost forever, wanted to make the C.P.R. supply them with water. So they had to go to the provincial legislature and the C.P.R. were relieved of their contracts with those very few people who were using that water.
We will go to the Lethbridge northern, if you like. Water was laid on there and it is a splendid area; and you can take the one out of Medicine Hat running down south of the Bow river; I think it was the Canada Land and Irrigation. Take those four projects; we all know they went broke and have been carrying on with assistance from here and there.
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Do not tKink I am arguing against irrigation. I am not, but I know that if a man is going to work an irrigated farm he will have to work harder than I ever did or than I hope I ever shall. When a man makes a success of an irrigated farm you know you have a really hard-working man on that job. It is not easy to handle a six-foot shovel, with rubber boots, in mud up to your knees, keeping those ditches open, with a load of mud on your shovel to start with, trying to get one foot up and cleaned off so that you can get out another shovelful. That is what working in an irrigated farm means. I am all for irrigation, but neither this government nor any other government in Canada should go into this business on the basis of any minimum cost. The four projects I have named all came to grief. They are doing infinitely better now; they are on their feet, but if we are to spend money to build that dam on the river which the hon. member for Davenport has been seeking for so long, let us not go in on a two-dollar basis. If we are going to go into this thing, let us not go in on a two-dollar basis. It is a sixty-four dollar question. Do not let us make it lower than that. May I ask who is in charge of P.F.R.A. and what his salary is?


James Garfield Gardiner: Mr. George Spence is in charge in\western Canada and his salary is 86,000.


Arthur Leroy Smith: Where is Mr. Gray?


James Garfield Gardiner: He is under Mr. Spence handling the water part of it and he gets $4,500.


Hazen Robert Argue: The remarks I have to make on this item will be brief, since previous speakers have covered a good deal of the territory I had previously planned to. discuss. I agree with the Minister of Agriculture when he says that the prairie areas are the areas in which the P.F.R.A. should have commenced, this being the diy section of Canada and the place where people have been settled, so that it rightly fell to the government to see that they were given some security against crop failure. I wish to assure hon. members from the maritimes who -have spoken that we in this group are not attempting to keep corralled for our own particular use anything that is good for all the people of Canada. I believe the marshlands project which one hon. member has described, is, from the small amount of study I have made of the subject, certainly a thing the government should consider.

In my opinion the whole of the P.F.R.A. might be lumped into one title, or one project, namely land utilization. I believe the P.F.R.A. is attempting to direct settlement to and use of land to the extent that it will have its optimum use. In some areas that might be land under forest crop; in other areas it might be land under grass; still in other areas it might be land under rotation; and in other areas again, as in southwestern Saskatchewan, it should probablj' be alternate crop and summer fallow.
P.F.R.A. has been lumped under three divisions. One is cultural work. Under the cultural work division- are formed the agricultural improvement associations. The agricultural improvement associations are an organization of farmers working together, thinking out their own problems, and at the same time they are given technical leadership by agricultural men both in the Department of Agriculture and in the universities. In our own particular area agricultural improvement association work has been directed mainly against the prevention of soil drifting, and with the help that farmers have been given through their associations they have gone a long way toward the control of soil drifting. The agricultural improvement associations are something that could be extended to all Canada, and I suggest that the minister should take that into consideration.
Under the land utilization part of prairie farm rehabilitation come the community pastures. I would suggest that P.F.R.A. be given some cash for buying land from farmers who hold title to land in areas which are perhaps to be formed into community pastures. I have seen the situation, and no doubt the minister has -seen dozens of them, in which one particular farmer does not want to leave his land; a fence is put around it, he stays in the community pasture and his neighbours are gone. It is an expense to P.F.R.A. So that P.F.R.A. should have a sum of money for the purpose of purchasing land from people who do not wish' to leave areas that are made into community pastures, or alternately the money should be used for the purpose of buying good farms which in turn can be traded to owners of land that is to be used as community pasture.
We have heard a good deal to-night about water development, and the main emphasis has been on large irrigation -works. I do not minimize the necessity for and the value that comes from large irrigation development, but I feel that if there is to be only a small amount of money devoted to P.F.R.A. it should be used almost entirely for small water development.

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I believe"! am correct in saying that the amount of money P.F.R.A. to-day pays for a small dug-out is $125. In our area a number of dug-outs were built this year. Into that area came men with proper machinery and they would construct the farmer a dug-out which cost him $250. He could obtain $125 from P.F.R.A. There was crop failure in that area this year, and there are many farmers who need dug-outs but who have not the extra $125 to pay the contractor to build the dug-out. I would ask the minister if he is taking into consideration the question of increasing the amount that will be paid for small dug-outs. The small dug-out, of course, can provide farmers in that area an assured supply of water, both for home use and for the use of live stock. The farmers then, by having the dug-out, can keep increased numbers of live stock and obtain the benefits that come from diyersified farming.
It is estimated by Mr. George Spence, the P.F.R.A. director, that there could be engineered from 5,000 to 7,500 small water developments each year for a period of ten years. He estimates that the cost of that programme would be three-quarters of a million dollars each year. I would strongly urge the minister, while he has not seen fit to increase the amount allotted to P.F.R.A. this session, that he certainly increase it by much larger amounts next session.
A small irrigation project can give the farmer an assured supply of vegetables. If the farmer can irrigate an acre or two he can have a good garden and perhaps a small orchard. More than that, if he has any number of acres irrigated he is assured of adequate supplies of feed. P.Fit.A. officials estimate that an acre of irrigated land will stabilize fifteen to twenty acres of land. In other words, in the dry areas of Saskatchewan a farmer can grow enough feed on an acre of irrigated land to carry through the winter the live stock that he can pasture in the summer on fifteen to twenty acres of land. I believe the advantages of small irrigation developments are even greater than those I have mentioned. It would reduce to a considerable extent the present trend toward larger farms. If we can arrest that trend and maintain a denser population in our agricultural communities, it will mean better community life, better social services, better recreational facilities, better health services and, all in all; a much better life for our farmers.
I contend that the money which would be spent on small irrigation developments would be self-liquidating. We all know what happened in the thirties. It cost the various
governments in Canada tens of millions of dollars to buy feed to ship in to the farmers in the dried-out areas. If we could provide
75,000	small irrigation projects they would to a great extent ensure our farmery against crop failure; they would ensure our farmers adequate supplies of feed and make it unnecessary in the future for the government to spend millions of dollars on relief, to the embarrassment of all concerned.
I was going to refer in detail to the larger irrigation developments, but I shall make my remarks on that phase of the matter quite brief. It is estimated by Mr. George Spence that the cost of feasible irrigation projects in Saskatchewan would total some $86,000,000. It is estimated by the P.F.R.A. officials that the feasible projects in the prairies, including some possible developments in Alberta, would total about $111,000,000. Irrigation developments have many advantages, one of the most important being that they would provide a great deal of employment to people who are now unable to find work. We hear reports of tens of thousands of young Canadians who cannot find work. Going home last night on the street car, I overheard a conversation by a young returned soldier who had been discharged. He could not find a job and had no prospect of a job. He was single, and he went on to say that the married men were being given the preference. He had joined up in 1940 when he was quite young and had no experience in any particular line, and he found that experienced veterans were given the preference. I admit that that is just one case, but I think any one with foresight who looks into the near future will be dismayed at the prospects for full employment in Canada.
A few months ago the Minister of Reconstruction gave us a glowing report of the labour situation in Canada. He said that there were twice as many jobs as there were workers for the jobs. I wonder what the figures are to-day. I have been told that it is estimated that there are about 70,000 unemployed in Canada to-day. We should not consider irrigation projects solely from the point of view of whether they will pay or whether the government can hope to get back its investment. We are dealing with people and with the happiness of people. If we can provide irrigation facilities for thousands of farmers, we shall increase the happiness of thousands of people on those farms. If a veteran taking land in western Canada under the Veterans' Land Act knew that he could carry on irrigation even on a few acres, he would be more
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willing to become a farmer and his chances of security on that farm would be much greater.
The government was given a mandate by the people of Canada, and that mandate to a large extent calls for jobs for all. I do not think the government should measure the money cost of jobs for all Canadians. In considering any comprehensive programme to provide full employment, the government must .get away from a niggardly figure of $2,000,000 for farm rehabilitation. Surveys that have been made to date by P.F.R.A. officials show that feasible programmes would cost something like $125,000,000. The cost of labour calculated into that estimate is at the rate of forty cents an hour, which I say is far too low. Wage rates should be increased for P.F.R.A. work. Possibly $150,000,000 is more like the outlay that should be made on the prairie farm rehabilitation programme, which, if spread over the next ten years, would mean an annual expenditure of $15,000,000.
I suggest that the Prairie Farm Rehabilitation Act be made to cover all Canada and that adequate surveys be made for proper land utilization throughout our nation. It may be that after these surveys have been made we shall need $50,000,000 a year for an adequate Canadian farm rehabilitation programme.


Mr. STANFIELD:: I should like to support my colleague, the hon. member for Cumberland, in his strong plea that something be done about the marshlands in Nova Scotia. The minister knows that there is not too great an area of land in Nova Scotia suitable for farming as farming is carried on to-day. Farming has changed in Nova Scotia the same as it has in many other places. The early settlers settled on the tops of hills so that they could see what was coming, but those farms have had to be abandoned. In many instances whole settlements and districts have had to be abandoned, and this has placed the rural population of Nova Scotia under great hardship. Our farms are now mostly concentrated along the river valleys and along the marshlands to which my colleague refers. I shall not speak about the river valleys at this time. They, too, have their problems at certain times of the year, and sooner or later something will have to be done to curb the flood waters on these rivers.
The marshlands in the counties of Cumberland, Colchester, Hants, Kings and Annapolis are the large producing areas in Nova Scotia. It is along these marshlands that the bulk of the farming is done. Years ago they were having a little problem keeping the dykes and sluices open and the drains dug, and keep-

ing the water off these areas. To-day some areas are having a great deal of difficulty and some of the land has been abandoned altogether. That is largely due to the fact that in the old days there were many men on the farms and in the communities roundabout who had been accustomed to putting in dykes and keeping the ditches open under the supervision of men who knew what they were doing, but these practical men are all gone now and there are few men left who understand the putting in of brush heaps and the building of dykes and sluices.
I suggest to the minister that what is required is an engineer who will study the situation and have working under him a group of men and the necessary machinery with which to do the work that is required. It is not an expensive project. No doubt it would take a little while to get such a crew organized and in operation. I do not suggest that the whole cost should be borne by the dominion government. I firmly believe that the property owners of the marshlands would be willing to bear their share, and I should like to see something of that kind set up. Then, when a sluice goes out or some drains have to be dug or brush heaps put in, the engineer could go and look over the situation and go ahead and do the work. I would suggest that the cost be borne in equal shares by. the federal Department of Agriculture, the provincial department of agriculture and by the marsh owners.
As I said before, the cost would not be so very big. In these days we are appropriating money for huge projects running almost into billions. Only the other day we were asked to approve a project whereby $750,000,000 would be devoted to the setting up of an international bank. It is hard for the ordinary person like myself to grasp such figures. But this project that I am advocating would not be expensive, and for the sake of the farmers of Nova Scotia along these fertile lands I would ask that the government grant a few thousand dollars to reclaim these marshlands. I do not think that is asking too much, and I urge the minister to take into consideration [DOT]the organization of a body of men under a competent engineer to take this work in hand.


Victor Quelch: The Minister of Agriculture is aware that there is a great deal of interest in the east central part of Alberta in a scheme known as the Red Deer river diversion scheme, which is a modification of the William Pearce project.
On October 1 last I moved for the production of papers containing a report on the progress of the surveys that had been made in connection with the scheme and I should like to

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quote a paragraph from sessional paper No. 215 dealing with the possibilities of this project. It says:
This project will provide settlement, permanent homes and means of livelihood for 7,500 families in a section of western Canada from which over ninety per cent of the original settlers were forced by drought; it resettles an area now practically depopulated; the area will support between thirty and forty thousand people.
It will provide irrigation for approximately
500,000	acres of land suitable for irrigation. This land is not now in production and is largely publicly-owned. It will give constant flow to approximately 1,200 miles of dry creek channels traversing an area containing 12,000,000 acres of range lands and will materially increase the live stock carrying capacity of such lands.
It will rehabilitate twenty-four urban communities now practically depopulated from the years of drought.
The most important feature of this project will be stock watering rather than irrigation, because most of this land is used for grazing, and there is a. serious shortage of water in that area. During the past years of successive drought the rivers and lakes have dried up, and very few of the dug-outs are holding water to-day because there has been little or no run-off in the last few years. The dam built a few years ago held only enough water this year to let water down on the irrigated land just once. So that until water is diverted from the river into this area the situation will continue to be a serious one in years of short rainfall.
I asked when it was intended to develop this project, and the reply that was brought down was "not yet determined."
I should like to point out that the interest in this scheme is a lively one, and during the last election it reached fever height. The Liberal party certainly got the people so excited about this project that I had a hard job to persuade people in that area that work on this scheme had not already been started. When I announced that I hoped it would be started I was told that I was talking through my hat. Some people had. seen men working on the dam down the Red Deer river and thought that work on the scheme had actually started, but these men were only carrying on surveys. I am convinced that many people still believe that the scheme has been started, and they will be disappointed because it will not be started this year and in all probability will not be done next year and possibly the year after. But I express the hope to-night that work will be started in the very near future, because it is not in the category referred to by the hon. member for Calgary West. There is no question that, if put into operation, this scheme will be of immediate service to the farmers in the area. Unfortunately at the present time there seems to be a great deal of confusion between the federal government and the provincial government as to whose responsibility it is to make an investigation regarding the development of power. Paragraph (c) of the reply that was brought down to my question states:
The possibilities of power development are being investigated by the province of Alberta but no report on -the subject has been received -as yet by the dominion government.
That point was given a great deal of publicity in the newspapers throughout western Canada and I have received many inquiries. So I sent an airmail letter to the deputy minister of trade and industry in the government of Alberta to find out how far their investigation had gone. I should like to quote from that letter to show the minister the confusion that exists and to ask him whether he would not clarify the situation. The letter addressed to myself and dated Edmonton, December 4, 1945, reads:
Dear Mr. Queleh:
On receipt of your letter under date of November 22 asking for information on the proposed Red Deer diversion scheme I referred the same to Mr. B. Russell, director of water resources for the province.
You will perhaps remember that Mr. Russell before coming -to this government was, for a number of years, closely connected as -an engineer with the P.F.R.A. In fact for -a larger part of his experience he has been closely connected -and informed -regarding both irrigation and power possibilities in Alberta and Saskatchewan, -and I know of no one who can speak with closer authority from all angles in this matter, and particularly with regard to the best interest of the province of Alber-ta herein.
Mr. Russell has written -a complete memorandum summarizing the situation at present -as far as we know it in Alberta, this under date of November 28. Mr. Russell suggests that this memorandum will perhaps give you the -information -that you need, and I have pleasure in enclosing copy herewith.
I might say, and I am quite sure, that Alberta will be only too glad to make definite recommendations on the question of power developments or any other aspects of these proposals if -the necessary particulars were made available to -the proper officials of this government, with the intimation that the views of the province were desired.
Then he includes the recommendation and the submission by Mr. Russell, which I will now read:
I have your memorandum of the 26th to which is attached a letter dated November 22, from Victor Queleh, M.P.
The following is briefly a summary of the situation to date:
On March 5 -last, Mr. George Spence, director of P.F.R.A. wrote to -the Hon. D. B. MacMillan to which was -attached a sketch plan showing the -route now referred to by Mr, Queleh; the advantages -and other general data was also -attached.

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Mr. Spence in his letter expressed the opinion that the P.F.R.A. had then gone about as far as it should go in its studies without having the consideration of the province and the usual application for investigation. Mr. MacMillan was requested to take this question under advisement.
In the material submitted, while power development was referred to, there was no indication as to- how such power could be developed, nor in fact any plans or information in sufficient detail from which any part of the proposal could be intelligently considered. We therefore wrote to Mr. Spence requesting certain additional plans and other material and at that time proposed other alternatives which we considered should be further investigated.
In the meantime, however, although we did not think that such a permit was necessary, we issued to the P.F.R.A. a preliminary permit required under the Water Resources Act to enter into and upon any lands for the purpose of making such investigations and surveys as may be necessary for the preparation of plans and estimates. I understand that these investigations are still in progress.
With regard to the power development particularly, this is a matter which has not yet been considered in sufficient detail either by the P.F.R.A. or the province to determine con-< clusively its feasibility, and we have no requests on file from the P.F.R.A. or any other body for permission to develop the water power -site.
The view of this department is that incidental to the development of irrigation from the Red Deer river there are very good possibilities for the development of water power and that no plan of irrigation which will destroy these power possibilities should be permitted. On the other hand, the P.F.R.A., while interested in the development of irrigation, is not much concerned with the power possibilities of the river. However, as a result of a conference I had with Mr. Gray and engineers of the P.F.R.A. last spring, a plan was discussed whereby the irrigation works could be so designed 'and located as to provide immediately the facilities for diverting water for irrigation without interfering with the power possibilities, but rather would create the conditions for power development later on when required. The P.F.R.A. undertook to make the necessary investigation and surveys to determine such possibilities but I have not yet received any report or plans from which to judge feasibility but I would infer from the paragraph quoted by Mr. Quelch that a combined irrigation and power development is now proposed. In this case the P.F.R.A. has never advised this office regarding this or requested the cooperation of the province with regard to power development or irrigation development.
The minister will note that in the concluding paragraph it states:
In this case the P.F.R.A. has never advised this office regarding this or requested the cooperation of the province with regard to power development or irrigation development.
Yet in the order tabled in the house it stated that "the possibilities of power development are being investigated by the province of Alberta but no report on the subject has been received as yet by the dominion government." There seems to be some con-

fusion there, and since there is so much interest in this question in Alberta I was wondering if the minister could say anything to clarify the situation. There seems to be some confusion as to whether the P.F.R.A. is conducting the investigation. Apparently the view of the province is that it is, while on the other hand the federal government appear to believe that the provincial government are conducting it. I think we should try to clarify that situation so that progress can be made. Can the minister give us some information?	*


James Garfield Gardiner: I am ,just answering the questions that were asked with regard to it. My understanding is that the development of the Red Deer project will cost somewhere in the neighbourhood of $6,750,000, based on the same estimates which were referred to a few moments ago by the hon. member for Wood Mountain, and -which, he said, were at wage rates which he thought would be too low; so that if the wage rates there are increased in proportion to what he was suggesting, I suppose the cost would be considerably more than that.
The position which I understand exists there is this. Investigations have been made which indicate that there could be certain storages of water created, and that if you were to use all the water which is stored there for the purpose of developing power, it would reduce very little the amount of water which could be used for irrigation purposes; and vice versa; so that when one is talking about all the land which can be irrigated if you utilize all the water which can be stored in that dam, and then proceed to talk about all the power that can be developed if you use the water for the purpose of developing power, both things cannot be done to that extent.
It may be correct to say that nothing whatever has been, done to determine just how much power could be developed there, but I have had reports over a considerable period of time that certain power development could take place; but engineers are careful, as they ought to be, not to put their names to reports which would indicate that something can be done until they are definitely sure. As a matter of fact, the reports which we have are made by the same man who made the other reports. Our reports are made by Mr. Russell, who up to a few months ago was employed by us an-d who is now employed by the Alberta government. I assume that whatever information we have, they have, because the same man has done the work for both. I have not any reason for believing that the provincial government have gone any farther in considering a power development, but that they

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simply took the figures which Mr. Russell has possession, of, as we have possession of them, and which indicate that a certain amount of power could be developed there, and to that extent they are probably giving consideration to it. We are giving consideration to it to the same extent.
One or two projects are taking precedence over that project at the present time. One is the St. Mary's project in the southern part of Alberta, for which we hope to get some money voted in supplementaries in the present year. We shall not be able to spend all we get in the supplementaries because of the nearness of the end of the financial year, but we hope to get sufficient to make a start, and have a revote, if we are not able to spend it all, in the succeeding year to go on with that development.


John Horne Blackmore: Would the Minister of Agriculture give us an idea of about how much he expects to have appropriated this year?


James Garfield Gardiner: I would rather wait until the supplementary comes down. I know how much we have recommended, and I think the amount we have recommended will be in it. But we shall not be able to spend as much as we got this year.


John Horne Blackmore: When does the minister expect that to come in?


James Garfield Gardiner: Well, the supplementaries will be in in a few days, if we expect to get through by the end of next week.


Victor Quelch: The people in that part of the country realize that the St. Mary's power project will have priority, on account of the international situation; but can the minister say that there is every reason to believe that when that project is completed the federal government will be proceeding with the Red Deer development scheme? That would be some encouragement.


James Garfield Gardiner: I would say that that is one which is on the list to be given consideration at as early a day as possible. I do not know just when that day will be; it depends on so many things, the amount of labour available and the question of making final engineering explorations in connection with it. It is just possible that when we get to the stage of making our report, those who have to take the responsibility for supplying the money will say, "We want another firm of engineers", or something like that, before we proceed with the work. If they do so, it will 47696-201	.
take longer; therefore I am not in a position to say when we shall start, but we shall start as soon as possible.


Victor Quelch: I was not suggesting for one minute that there was any friction between the federal and provincial governments. Is the federal government depending upon the provincial government for making any further investigation in relation to power development, because it will be noted that in the letter from Mr. Russell, he states:
However, as a result of a conference I had with Mr. Gray and engineers of the P.F.R.A. last spring, a plan was discussed whereby the irrigation works could be so designed and located as to provide immediately the facilities for diverting water for irrigation without interfering, with the power possibilities.
Apparently they have found a scheme whereby both irrigation and power development can be carried out. Am I to understand that as far as the power development is concerned the minister is expecting the provinces to carry out that investigation and P.F.R.A. will only proceed with the work of irrigation?


James Garfield Gardiner: I would not say definitely that is the case. So far as I am personally concerned I think the more authority that those who are providing the money have in connection with matters of this kind to create the work that they do themselves, the more likely the thing is to be done. I find in negotiating with two or three different authorities that it takes just about three times as long to get started.


Victor Quelch: The minister will be investigating the whole thing?


James Garfield Gardiner: I think what should be done in this instance is that we should discuss the matter with the provincial governments. We should find out definitely whether they would utilize in some way or another the water supplies that we provide them. Then we should proceed up to a certain point in making the storage of water possible, put the storages there. After that, we can deal with whatever authority is going to use the water; it may be a provincial authority; it may be simply the local irrigation organization set up for that purpose. But I would think that if we simply tied it up to a definite agreement between this government and the provincial governments, it would slow the matter up. All we want is to get along with it as quickly as possible. I would hesitate to say that we are 'going to make an investigation in regard to power development

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for the provinces. I would hesitate to say we shall not do it if the provinces want us to undertake it.


Arthur Leroy Smith: May I ask one question arising out of what has been said about power development on the Red Deer river? I know the Red Deer river very well. There is a gradual slope through the prairies. Has any investigation been made to show that you can get power from water storage anywhere on that river cheaper than you can get it right now in the town of Drumheller which is using this waste or slack coal? It is all right to talk about power from water storage. I am very much of an amateur in this business, but I have very grave doubt of any power scheme on the Red Deer which could produce power as cheaply as it is now produced at the power pla*nt which is using this waste or slack coal at the present time. Has any investigation been made?


James Garfield Gardiner: That is a question which has to have great consideration. I do not think there is any doubt in anyone's mind that you can develop power on the Red Deer river by spending a certain amount of money. Reports have been made on that from time to time. But th'en the question arises, as has just been indicated, as to whether the money ought to be spent there for the development, of power. I think it is admitted by all that you could spend money there to good advantage to develop irrigation.


Arthur Leroy Smith: That is, my thought.


James Garfield Gardiner: I think that is pretty well proven. If we have to decide the question now as to whether the government ought to use that, water for irrigation or power we would say, use it for irrigation; and I would be quite certain that if it did develop that as a result of the investigation which had been made you could develop that power cheaper in the town of Drumheller with the use of coal, that would be the deciding factor. I would think that if you develop it cheaper than by the use of water we would use the water for irrigation, and use the other for power. Those are the things that I do not think are fully determined, and we would not proceed to provide for the development of power until they were fully determined.


Arthur Leroy Smith: In other
words, do you think it possible that you could do both from the water? Irrigation means that you mu-t take water from a high place and spread it over some place lower. Power from

water means that you have the weight of the water coming from a high place to a low place. Perhaps that is an amateur's way of putting it, but it seems to me it is a simple fact. Does the department think you can build dams where you can do both things? I would have a bit of a doubt about it.


Victor Quelch: I point out that in earlier surveys it was shown that there could be power developments from the water developments on the Saskatchewan and Clearwater rivers.


Arthur Leroy Smith: That was called a stock-watering scheme.


Victor Quelch: Yes, I think it provided for irrigation of one and a half million acres.


Arthur Leroy Smith: Yes, that was the William Pearce scheme.


Victor Quelch: Yes, but it provided for a power development.


Mr. McKAY:: It seems to me that almost everyone in the house to-night is anxious to inform the minister on various situations pertaining to water conservation and irrigation throughout the country. Some of the speeches have given instructions. It is not my purpose to add to that number. I wish to ask the minister one or two questions pertaining to a project which is partly in my constituency, and which is of direct concern to Regina. I asked the minister a question about it a little while ago. Is he prepared to-night to say whether or not there have been any recent developments in connection with the water conservation project which is located south of the Wascana creek involving an area which we know as the Tyvan area? Is the survey completed, and does it involve a conservation project that may have to do with government policy on which the minister may not be prepared to give an answer tonight?


James Garfield Gardiner: As the hon. member
knows, the Wascana scheme has been under consideration for a long time, almost as long as the project referred to by the hon. member for Calgary West, who must have been standing very close to where I was standing many years ago, because I was standing there when they turned on the' tap and let the water into the reservoir at Regina. At that time his father was mayor of the city. This other thing has been talked about for almost as long as they have been talking about the water up in the Wascana in order to replenish the water in the artificial lake at Regina. That was the first use they pro-

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posed to make of it. We have got right up to the point of the building of the dam there so often and then have decided not to build it that I should not like to make any promises at this time. We have carried out further investigations, and those investigations have resulted in a more optimistic report than we had the last time we investigated it. I would say that if we do not run into too many risks created by local people as to why we should not do something we might get along with it some time, but I think we have all the information that is necessary to proceed with it.


Eric Bowness McKay: Would the minister indicate whether or not an official survey has been made?


James Garfield Gardiner: Yes. The P.F.R.A.
made an official survey and report this year which suggests that there are possibilities there.


Mr. HAZEN:: I support the request made of the minister by the hon. member for Cumberland and the hon. member for Col-chester-Hants for assistance to reclaim the marshlands and to rebuild the dykes in 'New Brunswick and Nova Scotia. In passing, may I say that the first of those dykes was built a great many years ago by settlers from old France who came into what was then Acadia. Longfellow in his peom "Evangeline" refers to these dykes and marshlands.
In the Acadian land, on the shores of the Basin of Minas,
Distant, secluded, still, the little village of Grand-Pre
Lay in the fruitful valley. Vast meadows stretched to the eastward,
Giving the village its name, and pasture to flocks without number.
Dykes, that the hands of the farmers had raised with labor incessant,
Shut out the turbulent tides; hut at stated
seasons the flood-gates
Opened, and welcomed the sea to wander at will o'er the meadows.
These are the dykes and meadows that have been referred to this evening.
During the course of his remarks one hon. gentleman mentioned the aboideaux, which are gates in the dykes that permit the water to run off the marshlands but stop the sea from running in. I refer to it in passing because the word "aboideau" is perhaps the one word that has been contributed to the English language by the province of New Brunswick. If you will look at the word in sbme of our dictionaries you will find that it has become an English word and that it originated in New Brunswick.
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Some of those lands and dykes are situated in the constituency which I have the honour to represent. It is a sad sight to drive along a road in the county of Albert and look down over these marshlands. You should see green, fertile fields, but actually you see nothing but a brown, muddy waste. I drove through what is known as the parish of Harvey not very long ago. I stopped my car and looked out over the marshes. The tide was high and I counted twenty-four bams completely surrounded by water, which of course meant that those meadow lands were of no further use. The hon. member for Colchester-Hants has referred briefly to the reasons for these marshlands and dykes going down. I do not propose to pursue that line of thought, but I should like to state briefly my own views as to what should be done.
It seems to me that if these lands are to be brought under the Prairie Farm Rehabilitation Act, or any similar act, it will be necessary to show that the money spent by the dominion government will be a reasonably sound expenditure economically,- taking a long view of it. My own feeling in the matter is that it will do no good1 for the dominion government to spend a great deal of money in reclaiming dykes unless some plan is worked out for the proper use of the land after it has been reclaimed. Unless enterprise and cooperation are shown by the owners of the land; unless the provincial governments are prepared to assist the scheme and help develop a plan that will make these lands of economic value, it does not seem to me there is much use in the dominion government going in and spending a great deal of money, for it will be only thrown away.
If this plan is to be successful there must be cooperation between the owners of the land, the provinces concerned and the dominion government. I understand that last year in New Brunswick about 5,000 feet of dyke were. constructed under a plan whereby the owners paid one-third of the cost, the provincial government paid one-third and the dominion government paid one-third, and that this year about a similar length of dyke has been constructed under the same plan. If I am wrong in that, perhaps the minister will inform me.


James Garfield Gardiner: That is right.


Douglas King Hazen: If the dyke owner himself is willing to put his money into the scheme it seems to me it shows he is really interested and is prepared to do his bit to make the lands of value again. But I think we have to go farther than the owners of the lands themselves. The provincial and dominion govern-
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meats have to work out a plan if the money expended is to produce results and not be wasted.
Something else must be done as well. The marsh acts, as they are sometimes called, or the marsh laws in the provinces have to be revised, codified, brought up to date and made workable, so that once the dykes are rebuilt they will be maintained. The regulations must be such that one dyke owner cannot say, "Well, I am not going to pay," and have the thing drag on so that finally the dyke commences to deteriorate. Unless a better commission is set up or somebody has power to deal with the; dyke laws and see that they are properly enforced, we are not going to get anywhere.
These are just one or two suggestions I am offering to the minister. I think it is almost a crime to see these productive lands being destroyed and' going to waste, and that process seems to be continuing. But I believe the only way to bring them back is through cooperation between the owners, the provincial governments and1 the dominion government. It will be no good for the dominion government just to put money in there by itself; the provincial government and the land owners themselves must be ready to cooperate.
I was going to ask the minister one other question about this item, if I may.( The total amount is $2,000,000. Of this I see that wages account for $671,000, including temporary assistance and so on; buildings and lands, $621,000, travelling expenses, $186,000, and so on. How much of the money voted for prairie farm rehabilitation was actually spent in doing the work of putting in these small or large water developments? About how much of the total was actually spent for that purpose?


James Garfield Gardiner: The amount voted
annually during the war years has been $2,000,000, and approximately thei whole amount has been spent each year. What are called wages and, to a certain extent, salaries are really part of the work.


Douglas King Hazen: That includes labour?


James Garfield Gardiner: Yes, it includes the labour and the engineering. The engineering has to be Carried out first, together with some exploration. All that is really part of the cost of the projects which are carried out. I could give the exact figures, but I do not think that is necessary.


Douglas King Hazen: I do not want the details. What is covered under "buildings and lands"?


James Garfield Gardiner: We have to put up buildings in connection with many of the projects, and we have to buy lands where we are going to flood them. When we dig ditches

in order to carry water through the land of other people, we have to buy the right of way. All that involves the purchasing of land and sometimes even of buildings. In some cases we have put up the buildings. If one were to describe the different projects this would be fully understood.
The discussion this evening has led me to review in my own mind the meaning of the term "can be constructed economically." If it means what most people have in mind when they use it, I would suggest that if the government were to take that as its reason for starting any of these projects we would never start. For example, we had a statement made a few moments ago by the hon. member for Calgary West, and everything he said was absolutely correct. The Canadian Pacific built an irrigation system at Brooks and tried to run it as a purely business proposition. They lost money all the time. They tried; when they sold land to a farmer, to charge a price which eventually would pay for the project, so that if the farmer made his payments year by year, and paid his water rates, eventually they would get their money back. They found that could not be done, and that has been found in every scheme of irrigation ever tried. It is the case in the United States and in all our plans. We have found this-and it is the basis on which we work-that you cannot charge a farmer more than $10 an acre for land which you will irrigate and then charge for water and expect him to pay for it. That is the basis on which the Brooks scheme is now operated by the farmers to whom it was turned over by the Canadian Pacific.


Arthur Leroy Smith: At $1 an
acre; they raised the ante.


James Garfield Gardiner: Yes. They were given
$400,000 to take it.


Arthur Leroy Smith: They are
charging $1 an acre instead of fifty cents.


James Garfield Gardiner: The people there will
sell land for $10 an acre. We went south of that project. We found 50,000 acres of land south of the Brooks project, owned by that organization. We took over those 50,000 acres. We could put water on 25,000 acres because there was only half of the land there of such a level that water could be put on it.


John Ritchie MacNicol: Irrigable.


James Garfield Gardiner: Yes; we put water on
25,000 acres and we said to the farmers: "If you were ordinary farmers you would have to pay $10 an acre, but we will take steps which

Supply-At/riculture
will warrant the Brooks set-up in selling the land to you at $8 an acre." In other words, we put up 82 an acre.


John Horne Blackmore: Does the minister
mean $8 for the land with water right?


James Garfield Gardiner: They had to pay for
the water from the Brooks project. They pay a water rate, but they get the land at $8 an acre. We went into the drought area and did just what the hon. member for Wood Mountain said we ought to do. We persuaded the farmers to move away from that place, actually driving them from where they were to the rolling hills area. We showed them the set-up there, and we said to them, "If you want to go there, if you want to get out of this drought area, we will take down your buildings and move them for you. We will stand the expense of moving your equipment and buildings from where you are to the place where you want to go, and we will pay you $8 an acre,when you get there." That place has been filled by people who have moved from the places they occupied previously. When I was last there I saw buildings of various colours because the boards had been taken out of the old buildings and were utilized in putting up new structures, and they had not been painted.


Arthur Leroy Smith: They are
doing very well.


James Garfield Gardiner: Yes; they are doing
very well. There are two or three kickers, but you get them anywhere. There are one or two who have not made good, but the great majority of the people there have succeeded and they would not go back to any other district.. But you cannot put that on an economic basis and say that if you spend so much money on the land you will have to get it back within so many years.


John Ritchie MacNicol: You get it back in taxes,


James Garfield Gardiner: The point can be better illustrated by taking the marshlands. If we did what they wanted us to do on the marshlands it would cost from $125 to 8150 an acre, and if you went into that district and asked anyone if he was prepared to buy the land there at that price he would say no. If you wait until you get into the position where the position is considered economic you will not do anything at all, but we have done some experimenting there. It was started under Mr. Bennett's government and I was in that district the first year I took over the department.. I found that they had reached the point of taking over the land. I was confronted with making the decision whether we
would go ahead, and we took so many acres of land alongside the experimental farm of X'appan and developed the same programme that anyone would have to develop on the rest of it to improve the land. My information is that the land was producing three-quarters per ton per acre of alfalfa and other hays when it was left alone. Under our experimentation we are producing four tons to the acre. In other words, the economic decision from my point of veiw, is that you can increase production of that land from three-quarters of a ton per acre up to four tons by treating	it in	certain	ways,	and	thelast time	I was	there	I was	surprised.	To
stand and look at the land across the road would make one weep to think that people could put up with a condition such as that without doing something about it when they compared it with what was taking place right opposite them.
The same thing is true of Valmarie. There were some people in that district who would not allow	us to	touch	their	land.	In	1937that land	was as	bare	as this	floor.	On	one
side of the road there was land growing forty bushels to the acre, and on the other side it was all bare notwithstanding the fact that the people there ha'd a demonstration of what could actually be done. I was there last summer and some of that land is still black and the people who own it are sitting there.
The point is that we have to get men who are inspired with the possibilities of what can be done on any of these schemes if you are to accomplish something.
Let me now take a third one, the muck-lands. This is something that affects the central provinces, and I may say that as far as I am concerned it may be called a ghost story. I have recollections of that land when I lived in Ontario as a boy. When I lived here as a boy I lived on a road where there was a swamp, and the thing I remember most about it was the stories I heard men telling about the will-o'-the-wisp they saw in the sw'amp and about pulling horses and cattle out of the muck in that swamp. Men delighted in telling exaggerated stories, and the result was that when I went by that swamp, especially at night, I ran past it.


Arthur Leroy Smith: And there was no General Chisholm.


James Garfield Gardiner: What has happened to that land, however, the transformation that has taken place in it, is no ghost story, and perhaps I might mention a name which some people may not like. But anyone who wants to see what can be done with muckland should visit the farm of Mitch Hepburn.


John Ritchie MacNicol: In Kent county.
Supply-Agriculture


Arthur Leroy Smith: I was there on Friday.


James Garfield Gardiner: My hon. friend will
know that there is a bit of muekland there out of which they used to pull horses. They used to spend Sunday afternoon pulling horses and cattle out of that' muck. That land was absolutely useless as muekland because it entailed work and yielded nothing. Well, the last time I was there I saw sixty men engaged in growing onions and other things on that land. That is the difference to-day. Between forty and fifty acres of land . had lain there black, saturated with water, humid soil that would grow vegetables as nothing else would, and yet it had been left there for generations without having anything done about it. He has drained the water out of that land and provided a water supply for the protection of the buildings which is just as good fire protection as afforded in any city in Canada. Moreover, he has an artificial lake where he can have a summer resort at home. And the water is running out of the mucklands past his own buildings down to the lake, creating a beauty spot on the farm.
That kind of thing can be duplicated all over Ontario and Quebec. Instead of having three or four men in an area tfying to raise a few steers and hogs such as we have been talking about, you could have sixty men working a garden and producing other necessaries of life, and they could make as much money and live as good a life as those three or four who were doing limited work on the same area.
These are the considerations we ought to have in our minds when we are discussing the subject and not merely what the land will be worth per acre. These works that will be put in to protect the marshlands in the maritimes will do something to improve land that would stay there 100 years without having anything done to them. It is not a question what that land will be worth next year if it is sold; it is a question of what it will be worth, not only to that community but to the Dominion of Canada for the next 100 years. In other words, one has to get the same vision that Theodore Roosevelt had in the United States at the time he was president. He had lived as a cowboy out in the western part of the United States and he knew what that-country could be developed into. When he became President of the United States he said what I think needs saying here. He said, "There have been millions upon millions of dollars spent in building harbours to make it possible for ships
['Mr. MacNieol.]
to come in to get the commodities of this country; there have been millions of dollars spent to build stations for railways and all that kind of thing; we ought to spend millions of dollars in order to make it possible to produce more commodities to pass through these ports and over these railways." If we get that kind of vision, then I think all the things we have been talking about to-night ought to be done by somebody. I agree with the hon. member who says that lye ought to have some discussion with regard to it. We are having that discussion now with the provinces in the dominion-provincial conference that is being held from time to time.
I hope we shall get around to considering the whole question. I assure the hon. member for Davenport that there is no one in the House of Commons who will ask for more money than I have asked for already. Ten years ago when we were discussing the same matter it took me three days to get the bill through the house which provided for the spending of a very small sum of money upon P.F.R.A. projects. Hon. members who were here then will recall that when I tried to increase the sum from $4,750,000 and provide that it be unlimited, I had to discuss the question for more than a day. I was asked, "What are you going to do with all that money? How much money is it going to take?"


Mr. NICHOLSON:: "Where are you going to get the money?"


James Garfield Gardiner: I do not know that they said, "Where are you going to get the money?" But they said, "What are you going to do with it when you do get it?" "How much are you going to want?" I said I wanted at least $20,000,000. "When are you going to want it?" I said I wanted it just as fast as they would give it to me and I would take it at whatever rate they would give it to me. I am now standing here ten years later. We have spent $20,000,000 and I have not heard one word of criticism to-night about that expenditure. You have simply said that we have not spent enough and you want to spend more. There never was $20,000,000 spent in this country that gave more satisfaction to the people where it was spent than that $20,000,000. If we spend $100,000,000 over a period of time, as has been suggested by the hon. member for Davenport, I am sure the same thing will be said at the end of that time.
I appreciate the fact that every one who has risen to-night to speak on this item has urged that more money be spent than we are proposing to spend and that we ought to

Supply*-Agriculture
spend it in all parts of Canada rather than in one section only. I hope in due course we shall be able to do that.


Percy Chapman Black: I should like to correct one statement the minister made. He said that the cost would be from $125 to $150 per acre but that would apply only to certain small areas and not to- the entire 100,000 or 150,000 acres of marshland.


James Garfield Gardiner: The acreage is 69,000
acres and the proposed cost is $4,000,000. The hon. member can figure it out for himself.


Mr. McCITAIG:: I am not going to take up very much time because other hon. members have dealt most ably with this matter. After hearing the remarks of the minister, I about came to the conclusion that I would not have to say anything at all. I was glad to hear what he had to say. I know of nothing that would be of greater national importance and of more lasting value than this water storage we have been talking about tonight. I would be prepared to multiply many times the amount to be spent. I think the spending of a billion dollars would be the best kind of investment for Canada.
I come from a part of the country that has had some benefit from this water storage, and I think it is the finest thing that was ever introduced into that part of the country. I should like to ask the minister if he has in mind as a future programme the continuation of the irrigation projects at Eastend, Valmarie and Maple Creek. I think every drop of water that is stored in western Canada is of real value. It raises the water level in the wells of the farmers. At the present time wells are beginning to run dry, and I should like to know if the minister intends developing these projects.


James Garfield Gardiner: Of course there are
some projects where you reach the point where you cannot do much more. In irrigation you can only use the water you have. As my hon. friend well knows, under the irrigation plan at Maple Creek we were only able to flood the land there once this year. If we had been able to flood it twice we would have been able to grow two crops of alfalfa instead of one. All the water stored at Maple Creek has been used this year, and it would be foolish for us to enlarge the area unless we could get more water.
In the Eastend scheme we have dammed the waters of Cypress lake and we have raised the level some eight or ten feet. Dams were constructed at both ends of the lake. When I was at Valmarie or Eastend this year I was a little worried about the water supply. We
were irrigating practically the whole valley at Eastend and Valmarie, and there are some six thousand acres under irrigation at the bottom of the dam. We used most of the water that was available this year, and I think nearly all the land that we can irrigate in the Valmarie district is under irrigation. Most of the land that we can irrigate at Eastend is under irrigation as well. I do not know that it is a case of further development there. There are other places where further development might be carried on.
We are certainly going to continue what we are doing there. We are going to grow alfalfa at all these places. These projects were started to make it certain that people could live in that country no matter how dry a year there was. When I went there this year I found the country dried up, and I found those who were in charge of the plots on which water had been put trucking hay out of the area. They were going up the road as I was coming down to look at it. They were taking the hay into Swift Current and other places where it was to be shipped away to make powdered protein feeds. That was not the purpose of making that irrigated area., The purpose of putting irrigation there was to make it possible for people to raise live stock and live there themselves.
I was delighted the other day when a young man wrote to me who was just back from overseas. Most hon. members would know the family if I mentioned his name. This man said that he had been in training at Medicine Hat during the war and had definitely made up his mind to come back to start farming in the Medicine Hat district. He said that he understood there would be an irrigation scheme started there, and it is under discussion. He said. "I was disappointed when I came back to find that it had not been started." He wrote me to say that his vision was a home on an irrigated piece of land in that country, with a large pasture near it into which he could turn his cattle. He wanted to raise cattle in that way, and he is one of the most capable producers of cattle we have in western Canada. I wrote back to him and said: "You go down to Regina and get Spence to drive you out to Valmarie and Eastend. Ever since this project has been put in I have been wanting young fellows with just the vision this young man has, and I told him that if he would start farming out there it would not be long before twenty or thirty or forty other young fellows would be out there doing the same.


An hon. MEMBER:: Has the land been
taken up?
Supply-Agriculture


James Garfield Gardiner: Yes; it has been used
for growing alfalfa, which was put up in bales and shipped out to plants and made into something else. I hoped that this young man would go there and take a quarter-section of land to grow feed for his live stock. We have 110,000 acres of pasture right alongside that is all fenced in and with water on it for live stock. I want him to go out there, take a piece of land, go on it and live there, turn his cattle into the pasture, and pay the small fee for running his cattle there. That is the dream I have had in mind for that part of the country, and I hope that many of these young fellows who come back will take advantage of it.


Eric Bowness McKay: In the southern part of
Saskatchewan, as the minister knows, there is considerable submarginal land. What acreage of this submarginal land has been taken out of production and placed in community pasture, and is that programme to be extended there?


James Garfield Gardiner: Approximately 1,350,000 acres have been taken out, but not all taken out of cultivation. Part of it was being used for pasturing in the form of ranches. We have taken that land over, fenced it in and made absolutely certain-in fact we have title to the land-that it will not be broken up again and will not be pastured to the extent it had been pastured, where it looked almost 'ike summer fallow.


John Horne Blackmore: I should like to express to the minister the gratitude of my constituency for the construction of the Leavitt irrigation district west of Cardston. I am also informed that the contract has been let for the construction of the Aetna irrigation district? Is that correct?


James Garfield Gardiner: Yes.


John Horne Blackmore: I wish to express our gratitude for that project and to tell the minister in the presence of the committee that these two projects will be successful. The Leavitt project has been successful, and generations after generations will be blessing the minister for making the necessary expenditure under P.F.R.A. for bringing water into an otherwise fertile area which occasionally suffered because of a shortage of rainfall. The same will be true of the Aetna project.


Thomas John Bentley: Is consideration being
given to the application of the Prairie Farm Assistance Act on an individual basis? If the answer is yes, I need say no more.
* [Mr, Gardiner.!


James Garfield Gardiner: Consideration was given to it at the time the scheme was first set up, but it was found impossible to apply it in that way. Our constitution does not permit of it. To apply it on an individual basis, it would have to be on an insurance plan, and that is impossible even if it were desirable The position we take is that even if it were possible we doubt the advisability of it. The people of Canada are putting three dollars into that project for every one dollar that is paid in by the people concerned, and in order to persuade them to do that we have had to suggest to them that we are not encouraging people to stay on submarginal land. We are not condemning the man living right in the middle of a district who, because of his methods, produces when other people do not. But instead of putting it on an individual basis we put it on the basis of a block of land and say that everybody in that block will be treated alike under the weather conditions that prevail throughout the year. I could not have got the bill through council or through the house in any other way.


Thomas John Bentley: I am not quite satisfied with the minister's explanation. I am not blaming him for the conclusions he has ardved at. I know some of the difficulties he has in administering the plan. At the same time his conclusions are not correct when he says that some people by their methods of farming can produce crops when others are not doing so. I know the part of the country from which I come pretty well, and the lay of the land sometimes makes all the difference between having a shower. If hon gentlemen will look at this map which I have here, it shows one township on the south side of the Saskatchewan river, with highway No. -1 running through it. The white spaces on the map indicate the crop land of that year, 1941; th black spaces, the summer fallow; the green spaces, the pasture land; and the red spaces are the low crop farms of that year. Where the crop failure was is marked red on the map. Some of the land is pasture land. In the township there are thirty-eight farmers. Of those thirty-eight farmers, four had 13-4 bushels to the acre; twelve had 7T1 bushels to the acre, and twenty-two had 3-18 bushels to the acre.


James Garfield Gardiner: That is all wheat? Does it include wheat or everything?


Thomas John Bentley: There were practically no coarse grains that year.


James Garfield Gardiner: That is the whole point. The payments are not paid on the basis of

Supply-Agriculture
wheat at all. I do not know why people will not study the act and really know what it means.


Thomas John Bentley: Pardon me; that was an error. This gives the total crop production in 1941.


James Garfield Gardiner: The estimate is made on the wheat production. That is only to show how dry it was.


Thomas John Bentley: Oh, no.


James Garfield Gardiner: It is. I know. I have been administering the act ever since it was set up. I drew it up in the first place.


Thomas John Bentley: Very well; we will take your word for it. The total crop average was 5-5 bushels to the acre, and twenty-two farmers having less than that had to suffer because the average was over five bushels to the acre. It is not a bad piece of land. There are a lot of good farmers there, and when they get rain they can produce a crop. In the years when they do not get rain they have to have something to carry them over. That is the whole purpose of the Prairie Farm Assistance Act, to carry people in these semi-arid areas when they do not produce a crop.


John Ritchie MacNicol: Is that between Saskatchewan Landing and Swift Current?


Thomas John Bentley: Yes.


John Ritchie MacNicol: That could be irrigated from the dam on the Saskatchewan river.


Thomas John Bentley: I shall not go into that, because it is a big project and it would take time to discuss it. I am not asking the minister to enter into a debate with me about this to-night, but to consider taking it to the dominion-provincial conference or to initiate b3T any other method discussions with the provinces to introduce a crop insurance measure. If that requires provincial legislation, make arrangements for it to be done. If it requires that the farmers pay the cost, make that necessary to be done also. \Ve do not ask the people of eastern Canada to do this job on a crop insurance plan.


James Garfield Gardiner: It cannot be done in any other way.


Thomas John Bentley: Very well; I believe it can, if you can maintain the present price level. *


James Garfield Gardiner: Some people tried for forty years to do it in that way and it could not be done. Statistics were produced every time it was brought up, and it was turned down. It operates in this way-


Thomas John Bentley: It operates as a relief plan, to take people off relief.


James Garfield Gardiner: No, it does not.


Thomas John Bentley: That is what it is, nothing more or less than a relief plan. It takes them off the municipal relief roll and puts them on relief in this way. So far as any investigation is concerned, that is a matter of opinion also. You can have other data which will cause you to come to a different conclusion. The point I wish to get at is this: If you can stabilize agricultural prices somewhere near what is being asked for and where some of them are at the present time, it is possible for the farmers to pay enough that you will not need to charge the rest of the dominion the other $3 to provide something for a plan of this kind, nor would you find it necessary to charge them to put in an actual crop insurance plan, based oh something better than relief figures.


James Garfield Gardiner: What percentage would you suggest they should be charged?


Thomas John Bentley: It depends entirely on what you, your government, the Minister of Trade and Commerce and so on, decide are the proper price levels over a period of years.


James Garfield Gardiner: How much do you think could be collected?


Thomas John Bentley: If you were to assure the farmers of the west that the price of their wheat would never fall below $1.25 a bushel, not many would raise much complaint if the charge was 10 cents.


James Arthur Ross: Ten cents for what?


Thomas John Bentley: I do not think you will need that much. It has not been tried.


James Garfield Gardiner: You would have to have about 20 cents to do what we are doing now.


Thomas John Bentley: I do not think so.


[Stage Direction]
Item agreed to.	-
Special-
SI. To provide for wheat acreage reduction payments; for administration expenses in connection therewith, and for temporary appointments that may be required notwithstanding anything contained in the Civil Service Act, $600,000.
Percy Ellis Wright: With respect to this item I should like to know when it is expected that finality will be reached in the matter of wheat acreage reduction payments. Several cases have been referred to me not so very long ago with regard to payments on breaking which was done in 1941-42, and the lands were inspected over a year ago, but apparently these payments have not come

Supply-Agriculture

through to date. Would the minister give us an estimate, at least, of when these payments will be made and when this matter will be finally cleared up?


James Garfield Gardiner: Practically all the payments are made. There is a provision for $600,000 this year which we expect will be the final payment. As soon as that money is released, the payments will be made on the lands to which we are referring, the breaking. I may say that that is one case where the governmenit itself examined into what had been done and realized that some people had not been paid as they should have been paid, and, without any urging from anybody, established the basis of the extra payments which require this additional $600,000 to be paid out.


[Stage Direction]
Item agreed to.
Special-
Si. To provide for administrative expenses, Agricultural Prices Support Act, 1944, $50,000.
Mr. CRUICKSHANK:: I wish to ask this one question, and I am sorry if it is not under the proper item. I want to make a correction on behalf of the province of British Columbia

I think it is a matter which comes under this item-and pointing to the Toronto Globe and Mail, in connection with peaches.


Ian Alistair Mackenzie: Carried.


George Alexander Cruickshank: It is the only item I can bring it under. I wish to commend the minister, instead of condemning him, as most members from the wheat belt do, and I think the rest of the members from British Columbia will join in commending him.


Ian Alistair Mackenzie: Carried.


George Alexander Cruickshank: Just a minute. It is in connection with these little boxes that they put the 'peaches in. As I understand the situation, according to the Globe and Mail [DOT]-and the statement must be right, being in the Globe and Mail-the federal government have condemned that camouflage, which the C.C.F. and Fraser Valley do not approve at any time. They have condemned the sale, as I understand it, in Ontario, of baskets with this covering. But it says here, and to this I take strenuous exception, that British Columbia and Michigan peaches had to be repacked in that to market 'them in Ontario. Imagine British Columbia peaches having to be repacked in anything to be marketed anywhere! Even the hon. member for Vancouver East will agree with me in that. We do not have to camouflage our stuff to sell it anywhere.


Ian Alistair Mackenzie: Carried.


George Alexander Cruickshank: Wait a minute. We do not need this red stuff. I am going to make a speech now.


Some hon. MEMBERS:: Go ahead.


Some hon. MEMBERS:: Carried.


George Alexander Cruickshank: Just a minute. I have not taken up any time. I come from the most important agricultural riding in British Columbia, and the finest one in the Dominion of Canada, and I have taken up no time in discussing these items, but I should like the minister to know that we do not want our peaches, or anything else we sell from our agricultural production, camouflaged in order to sell it. But we commend the minister for enforcing the laws. Again I give my hon. friends of the C.C.F. credit. I want the minister to know that British Columbia does not approve this pink gauze, and that I strongly resent any inference which is made in the Globe and Mail that our peaches have to be offered under that guise in order to be sold, even to the people of Ontario.
Item . agreed to.
Special-
S5. Agricultural research special projects, $200,000. -


James Arthur Ross: What are these special projects?	,


James Garfield Gardiner: The agricultural research item is the $200,000 which we have been voting now for the last two sessions, for doing special research work in agriculture. One of these projects is being carried out at Morden; another is being carried on at Portage la Prairie, in connection with flax.


James Arthur Ross: What is being done at Morden?


James Garfield Gardiner: I shall have to look it up.


James Arthur Ross: Never mind just now.


James Garfield Gardiner: Anyway, one is being carried on at Morden. It has something to do with fruit and vegetables. The one at Portage la Prairie is on flax, and the one out in Alberta is on wool.


[Stage Direction]
Item agreed to.

[Stage Direction]
SS0. Departmental administration, $167,000.
Joseph William Burton: Would the minister make a statement in connection with that, before he proceeds?

Trust Companies


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: I was hoping that I
would not be asked to make a statement tonight. I am prepared to make one, but I do not think any statement I can make now will expedite the handling of the estimates at all, because everything that I would have to say will come up under the various items.


Joseph William Burton: We realize that the hour
is late, but at the saiiie time I am disappointed that the minister has not seen fit to give us a detailed explanation of the items. We realize that during the war years much of the trade of the country was so channeled that there was very little for the minister's department to do to encourage trade, either imports or exports. Now that we are reaching the reconstruction stage I am looking forward to the minister's department having greater influence in the lives of the people of this country. We are interested in various phases of the department's activities. We should like to know whether there are any plans for increasing the number of our trade representatives in the various countries, and where they are to be located?


James Angus MacKinnon: May I interrupt the
hon. member for a moment? I had prepared a statement along that very line, that 1 thought I might give to the committee. If the committee will give me ten or fifteen minutes I should be pleased to make it.


John Ritchie MacNicol: Do it under the next
item.


John Bracken: We have had a very long week.


Ian Alistair Mackenzie: I am inclined to agree with the leader of the opposition. We have had a successful and strenuous week. Everybody has worked hard. With the consent of the committee I would move that the committee rise, report progress and ask leave to sit again.
Progress reported.
On motion of Mr. Mackenzie the house adjourned at 10.55 p.m.
Monday, December 10, 1945.