1946-07-17

[Stage Direction]
Mr. MAURICE LALONDE (Labelle) presented the first report of the standing committee on industrial relations, and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Third report of standing committee on railways, canals and telegraph lines.-Mr. Breithaupt.

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Howe be substituted for that of Mr. Brown; that the name of Mr. Beaudoin be substituted for that of Mr. Beaudry; that the name of Mr. Mitchell be substituted for that of Mr. Ferguson and that the name of Charlton be substituted for that of Mr. Mac-Nicol; that the name of Mr. Skey be substituted for that of Mr. Ferguson and that the name of Mr. Adamson be substituted for that of Mr. Daniels on the select standing committee on industrial relations.


[Stage Direction]
Motion agreed to.


Mr. G. K. FRASER (Peterborough West):: Mr. Speaker, I rise to a question of privilege which affects not only myself but other members of the house. In accordance with the ordinary practice, yesterday I submitted the following questions for the order paper:
1.	How many motorcycles have been declared surplus by the Department of National Defence (Army) ?
2.	What are the departmental numbers of the surplus declaration forms in each case?
3.	On what dates were declarations of surplus motorcycles made?
4.	How many of these motorcycles have been disposed of through War Assets Corporation?
5.	How many of these motorcycles have been disposed of by sale to ex-servicemen in pursuance with the policy which grants them priority of purchase?
6.	In what province or provinces are the remainder of these motorcycles now located?
I also submitted the following questions:
1.	How many motorcycles have been declared surplus by the Department of National Defence for Air?
3532	COMMONS
Income Tax-Canada-United Kingdom
2.	What are the departmental numbers of the Burplus declaration forms in each case?
3.	On what dates were declarations of surplus motorcycles made.
4.	How many of these motorcycles have been disposed of through War Assets Corporation?
5.	How many of these motorcycles have been disposed of by sale to ex-servicemen, in pursuance of the policy which grants then priority of purchase?
6.	In what province or provinces are the remainder of these motorcycles now located?
I had other questions in regard to this matter-


Mr. SPEAKER:: Order.


Gordon Knapman Fraser: I shall not read them at present. These questions were returned to me last night with a notation that questions dealing with War Assets cannot be placed on the order paper while the special committee on expenditures and economies is still sitting. I am not a member of that committee and am therefore not permitted to participate in its deliberations. If I am to be blocked in my move to place questions on the order paper on behalf of my constituents, then my rights and privileges as a private member of this house are in my opinion being seriously interfered with. I therefore ask you, Mr. Speaker, to rule that not only I but all members of parliament shall have the right to seek information through the normal channels of the house, and that the questions which I have just read, and the other questions I have here, be permitted to appear on the order paper and be answered in the ordinary way.


James Horace King: I have noted the observations made by the hon. member, and I shall give him an answer later.



INCOME TAX


[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce Bill No. 300, respecting an income tax agreement between Canada and the United Kingdom, signed at London, in England, on the fifth day of June, 1946.
William Lyon Mackenzie King: The Minister of National Revenue will, in my absence, be in charge of this bill, and the following one, and I would ask him to give the house the necessary explanation.


Mr. McCANN:: The purpose of this bill is to give legal effect in Canada to the income tax agreement between Canada and the United Kingdom which was signed in London on June 5, 1946. The purpose of the agreement is to
[Mr. Fraser. 1
avoid double taxation in respect of trading profits and dividend, interest and royalty payments flowing between the United Kingdom and Canada. It systematizes taxation imposed on other types of income including salaries, pensions and annuities which might be taxable in both countries. Provision is made for each government to credit its nationals for taxes paid to the other and for the exchange of information.


Mr. HACKETT:: Does this apply to succession duties?


James Joseph McCann: No; the next bill does.
Motion agreed to and bill read the first time.



SUCCESSION DUTIES


[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved for leave to introduce Bill No. 301, respecting a succession duty agreement between Canada and the United Kingdom, signed at London, in England, on the fifth day of June, 1946.
Some hon. MEMBERS:: Explain.
Mr. McCANN; The purpose of this bill is to give legal effect in Canada to the succession duties agreement between the United Kingdom and Canada, which was signed in London on June 5, 1946. The purpose of the agreement is to avoid double taxation on the estates of deceased persons with interests in the two countries. The agreement provides that the situs of the property of the decedent will be determined in large measure by the general law of situs. The convention systematizes the taxing rights of the country of domicile and the country of non-domicile. The agreement also provides within certain limits for the crediting by the country of domicile of taxes paid on estates situated in the country of non-domicile and for the exchange of information for the avoidance of fraud.
Motion agreed to and bill read the first time.



MERCHANT SEAMEN


[Stage Direction]
Hon. LIONEL CHEVRIER (Minister of Transport) moved for leave to introduce Bill No. 302, respecting compensation for merchant seamen.
Some hon. MEMBERS:: Explain.

National Dejence Act


Mr. CHEVRIER:: The object of this bill is to make' statutory provision for the payment of workmen's compensation to merchant seamen, particularly those employed on ships engaged in foreign trade as well as those plying in home waters, and more particularly those not now covered by provincial legislation. The principle of workmen's compensation has been recognized in the Government Employees' Compensation Act, 1925, and that principle was extended during the war years to cover war workers and other groups. On August 1, 1945, it was extended by order in council to cover merchant seamen. The object of this bill is to give statutory authority to those regulations, which are now in force.


Mr. BROOKS:: Has this anything to do with gratuities and reestablishment credits for seamen who served during the war?


Lionel Chevrier: Nothing at all.
Motion agreed to and bill read the first time.



CRIMINAL CODE


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Minister of Justice) moved for leave to introduce bill No. 303, to amend the criminal code.
Some hon. MEMBERS:: Explain.
Mr. ST. LAURENT: There are only two points dealt with in this bill. One is to establish for Saskatchewan, at the request of the attorney general of that province, that the jury to try indictments will consist of twelve persons instead of six as heretofore. The second is to implement my undertaking to the hon. member for Calgary West (Mr. Smith) to ask the house at this session to deal with the situation in respect of jurors in criminal cases in the province of Alberta. Heretofore the matter was regulated by the terms of the Northwest Territories Act, as it existed in 1905. It is proposed that it shall now be regulated by the code, but that so long as Alberta retains a system of six jurors instead of twelve, the number of persons called who may be challenged peremptorily and the number of those who may be requested to stand aside by the crown shall be half the number which prevails when a jury is to be made up of twelve persons.
Motion agreed to and bill read the first time.



NATIONAL DEFENCE ACT


[Stage Direction]
Right Hon, W. L. MACKENZIE KING (Prime Minister) moved for leave to introduce bill No. 304. to amend the Department of National Defence Act.
He said:	Mr. Speaker, this bill is necessitated by changes which will have to be made in the Department of National Defence Act, as it was amended to meet the situation which arose during the time of war. Now that the war is over, other provisions will have to replace those inserted during the war.
Before the war, the Department of National Defence was an administrative as well as a legal unit. However, early in the war, it was found that the magnitude of the problems that faced the defence services necessitated an administrative division of the department into three parts to look after the needs of the army, the navy and the air force respectively. This was made possible by an amendment to the Department of National Defence Act in 1940, which provided for the appointment of an Associate Minister of National Defence, a Minister of National Defence for Naval Services, and a Minister of National Defence for Air. It similarly provided for additional deputy ministers.
The need for the present bill arises mainly out of the fact that the 1940 amendment limited the provision for the appointment of additional ministers and deputy ministers to the period after the issuance of a proclamation under the War Measures Act to the effect that a state of "war, invasion or insurrection" exists. In addition, it is provided that the department must revert to its unitary condition within six months after a proclamation stating that "the war, invasion or insurrection no longer exists." While the need for division of the department is most likely to arise in time of war or of acute danger of war, nevertheless it may, on occasion, be found desirable to have such division of the department for purely administrative or other reasons. The present bill accordingly removes the restrictions which I have referred to.
Another effect of the present bill will be to enable additional deputy ministers of national defence to function even though it is not felt desirable to appoint more than one minister. This is not possible under the act as it stands at present.
Questions

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

Mr. McLURE:: 1.	At the time when the Canadian dollar was put on a parity basis, how many foreign exchange contracts were outstanding between the Foreign Exchange Control Board and Canadian exporters ?
2.	What are the names of exporters holding such contracts, and what length of time did each such contract cover?


Mr. MAYHEW:: 1.	At the time of the recent change in the exchange rate of the Canadian dollar there were 963 forward exchange contracts outstanding between Canadian exporters and Canadian banks acting as authorized dealers of the foreign exchange control board.
2.	It is not desirable to disclose the affairs of particular individuals or corporations by giving detailed information regarding the contracts outstanding.


INCOME TAX-AMOUNTS REFUNDABLE UNDER SECTION 93
Mr. DORION:: On what date will the amounts refundable under subsection 1 of section 93 of the Income War Tax Act be payable?


James Joseph McCann: The provisions of the
Income War Tax Act require these savings to be refunded as follows: (a) For the taxation year 1942-not later than 31st March 1948; (b) For the taxation year 1943-not later than 31st March 1949; (c) For the taxation year 1944-not later than 31st March 1950.


WHEAT BOARD-1944 CROP YEAR
Mr. CASTLEDEN:: What is the total amount of wheat from the 1944 crop year still held by the Canadian Wheat Board?
Mr. MaeKINNON: The wheat in the 1944 crop account is all sold excepting that amount required under order in council to be held by the Canadian wheat board to meet domestic requirements until July 31, 1946, estimated at 3i million bushels.


OPTOMETRISTS IN PRAIRIE PROVINCES-FEES FOR ARMY SERVICES
Mr. DIEFENBAKER:: 1.	How many optometrists^ in Manitoba, Saskatchewan and Alberta received fees from the army for services rendered during each of the years 1940 to 1945, either by way of direct payment or indirectly by deduction from the individual's pay?
2.	What are the names of the said optometrists, and how much did each receive during each of the said years?


Mr. LAPOINTE:: 1 and 2.
Military District No. 10 (Manitoba)
The number of optometrists who received fees from the army for services rendered was three,						
during each of the years 1941-45. Information for 1940 is	not available. Names and	amountsreceived are as follows:	1941	1942	1943	1944	1945S. Z. Grower 	. $706 63	S 975 30	$	627 03	-	-Consolidated Optical ....	. 401 38	-	-	-	-T. Angus Dunkin 	. 208 16	1,015 33	-	Charles A. Campbell 	. 	901 04	3,730 91	3,189 54	$1,480 20O. G. Snyder	*.	. 	-	678 18	354 00	1,020 68Robert S. Ramsay 	[DOT] 	-	-	1.697 93	4,818 09Military District No. 12 (Saskatchewan)	The number of optometrists who received fees from the	army for	services rendered, during	the years in question, is	as follows:	1940 	
2	1943 .	21941 	
3	1944 .	21942 	
2	1945 .	Nil

Questions
Names and amounts received are as follows:
1940	1941	1942	1943	1944George A. McQuaig -	
$266 00	-	-	-	-
Dr. Hardy and
Dr. Armitage	
21 34	-	-	-	-Henry S. Hay	
- S 278 15	$ 900 31	$3,012 65	$ 692 60R. E. Whittaker	
-	5 00	5 00	-	-Wm. Forsyth	
-	9 00	-	-	-J. Carment	
-	-	-	1 00	-W. G. Foiler	
-	-	-	-	5 00
Military District No. 13 (Alberta)
The number of optometrists who received fees from the army for services rendered during the years in question is as follows:
1940	
5	1942	
21941	
3	1943-45	
NilNames and amounts received are as	follows: Amounts	shown include fees for	the supplyof lenses as well as optometrist fees.	Itemized figures are	not available.	1940	1941	1942Consolidated Optical Co	$ 495 80	Imperial Optical Co	
77 28	69 30	-J. C. Borud 	
17 00	__J. A. Toombs 	:	
15 00	Irving Kline 	
3 00	-	E. J. Anderson 	-	1,040 20	$ 148 85A. Ashdown Marshall 	-	2,542 29
Note: In no cases were officers or soldiers subjected to deduction of pay for eye examination, or supply of glasses.


VETERANS LAND ACT-MIDDLESEX COUNTY
Mr. WHITE (Middlesex East):: 1.	What is the total cost to date of the twenty-eight Veterans Land Act houses being constructed in London township, and of the seventy-two being constructed in Westminster township, county of Middlesex?
2.	What are the annual administration costs for these one hundred homes?


Mr. MACKENZIE:: 1.	Total construction costs: $407,745.51.
2.	Annual administration costs of these houses cannot be segregated from the overall costs of administration.


BROOKLANDS, MAN.-WATER MAINS AND SEWERS
Mr. KNOWLES:: 1.	Has the Department of Reconstruction and Supply received an application from the village of Brooklands. Manitoba, for assistance in the installation of additional water mains and sewers ?
2.	Has the government made any offer to the village of Brooklands to contribute to the cost of such installations? If so, to what extent?
3.	What is the present status of negotiations between the government and the village of Brooklands with reference to these matters?


Mr. McILRAITH:: 1.	Yes. At the request of the municipal authorities of Brooklands a resident of the village called on the department in May of this year to find out whether such assistance could be secured.
2.	No. However, the representative of the village was informed that in the proposals made to the provinces by the dominion government there was provision for planning and timing grants for such undertakings which, of course, were contingent upon agreement being reached between the dominion and provincial governments. This information was confirmed in a letter dated May 18, 1946.
3.	No negotiations are being carried on.
Motions for Papers



QUESTIONS PASSED AS ORDERS FOR . RETURNS DISTRICT JUDGES IN ADMIRALTY


Mr. MacINNIS:: 1.	Who is the present commissioner of the Yukon territory?
2.	When was he appointed?
3.	Where is his present residence?
4.	Is he required to give his full time to his duties as commissioner?
5.	What is his annual salary?
6.	Is he granted any other allowance because of his office?



MOTIONS FOR PAPERS


Mr. BLACK (Cumberland) :: For a copy of all correspondence since the beginning of the war exchanged between the Department of National Defence for Air, Department of Transport, Department of Munitions and Supply, Department of Reconstruction and Supply, and the town of Chatham, New Brunswick, the county of Northumberland, New Brunswick, the Honourable T. P. Burchill, Lockhart Woodworkers Limited and Miramichi Allied Industries Limited, regarding the utilization of the Chatham, New Brunswick, airport for the establishment of industries.
2. Also a copy of all correspondence, agreements, expense accounts or statements in connection with the disposal by sale or lease or for use for storage purposes of the Chatham, New Brunswick airport and equipment or supplies, by the Crown Assets Allocation Committee and War Assets Corporation.



REGIONAL RECONSTRUCTION COUNCILS-REPORTS TO DEPARTMENT -

Mr. GREEN:: For a copy of all reports submitted by regional reconstruction councils to the Department of Reconstruction and Supply or the Department of Reconstruction.	.


Mr. HOWE:: Mr. Speaker, this motion refers to interdepartmental correspondence, which has always been regarded as privileged. I suggest that the motion is out of order.


Howard Charles Green: May I put it to you, Mr. Speaker, and to the Minister of Reconstruction and Supply, that this is a motion for a copy of all reports submitted by regional recon-
struction councils to the Department of Reconstruction and Supply. Those are honorary councils serving without remuneration. .


Clarence Decatur Howe: There is a paid staff.


Howard Charles Green: There is nothing secret about their activities. Moreover they are representative men from various walks of life in each province. The minister explained the type of work they do when on March 20, as reported at page 115 of Hansard, he said:
It is the work of these councils to keep in touch with conditions in the provinces, to keep the department advised of requirements of materials and requirements of any kind. It is also the duty of the councils to give every assistance to those engaged in reconstruction work in the province.
In other words it is their task to inform the government of requirements in the provinces, and to listen to the submissions made by different groups.


James Horace King: Order. These motions are not debatable. I have given the hon. member sufficient latitude to put his question to the minister, but I cannot allow debate.


Howard Charles Green: I submit that this does not come under the rule at all. There is not the slightest possibility that the production of these reports would be contrary to public interest. I would therefore ask that Your Honour put the motion to the house.


Mr. MACDONALD (Brantford City):: I was paired with the hon, member for London (Mr. Manross). Had I voted I would have voted against the motion.


Mr. BREITHAUPT:: I was paired with the hon. member for Danforth (Mr. Harris). Had I voted I would have voted against the motion.
Mr. McCUBBI'N: I was paired with the hon. member for Middlesex East (Mr. White). Had I voted I would have voted against the motion.


Mr. LEGER:: I was paired with the hon. member for Haldimand (Mr. Senn). Had I voted I would have voted against the motion.


Mr. GARDINER:: I was paired with the hon. member for Souris (Mr. Ross). Had I voted I would have voted against the motion.


Mr. RAYMOND (Wright):: I was paired with the hon. member for Beauharnois-La-prairie (Mr. Raymond). Had I voted I would have voted against the motion.


Mr. ADAMSON:: I was paired with the hon. member for St. James (Mr. Beaudry). Had I voted I would have voted for the motion.


Mr. ROWE:: I was paired with the hon. member for Quebec West and South (Mr. Parent). Had I voted I would have voted for the motion.


Percy Chapman Black: I was paired with the hon. member for Westmorland (Mr. Emmerson). Had I voted I would have voted for the motion.


Frédéric Dorion: I was paired with the hon. member for Kamouraska (Mr. Marquis). Had I voted I would have voted for the motion.


Mr. McMASTER:: I was paired with the hon. member for Champlain (Mr. Brunelle). Had I voted I would have voted for the motion.


Mr. LACOMBE:: I was paired with the hon. member for Terrebonne (Mr. Bertrand). Had I voted I would have voted for the motion.
Militia Pension Act


Mr. MURPHY:: I was paired with the hon. member for Charlotte (Mr. Stuart). Had I voted I would have voted for the motion.



MILITIA PENSION ACT


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of National Defence) moved the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to amend the Militia Pension Act to bring up to date the existing provisions of the Act and to provide that time served on active service be included in the pensionable term of service of persons appointed to the permanent force prior to the first of April, 1946; and also to add a new part to the Act, respecting pensions, allowances and gratuities, applicable to all persons joining the permanent force after the 31st of March, 1946, and to those persons coming under the present Act, who may, instead of remaining thereunder, elect to come under the new part.
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]
Right Hon. W. L. MACKENZIE KING ' (Prime Minister) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Federal District Commission Act, 1927, to provide for the appointment of fifteen commissioners (in lieu of ten), also for the transfer to the president of the privy council of certain jurisdiction over the commission and to provide further for the granting of moneys by the payment of grants or otherwise, for the purposes of the commission.
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. GORDON GRAYDON (Peel):: Mr. Speaker, I should like to address a question to the Prime Minister. The final report of the commission on espionage named certain persons connected with the embassy of a foreign
fMr. Lacombe.}
government. I wish to ask the Prime Minister who, if any, of these persons are still here, what is the recognized diplomatic procedure in such cases, and is the government invoking such procedure in these instances?


William Lyon Mackenzie King: Mr. Speaker, my hon.
friend gave me notice of his question. The report names seventeen persons, I understand, as members of the Soviet embassy staff who were engaged in inadmissible activities. This appears under section 11(7) of the report of the royal commission. Of those seventeen I understand eleven had left this country before the report itself was published. I have assurances that the remaining number will be leaving immediately at the instance of the Soviet government.


Mr. HOMUTH:: Is there no prosecution?



EMPIRE TRADE


[Stage Direction]
On the orders of the day:
Howard Charles Green: I should like to direct a question to the Minister of Trade and Commerce. A Canadian Press dispatch published this morning indicates that a conference may be held this fall to consider the whole question of' empire trade preferences. Will the minister make a statement in that regard?


Hon. J. A. MacKINNON (Minister of" Trade and Commerce):: I received just as I came in the house a notice of the intention of the hon. member for Vancouver South to ask this question. I have not had an opportunity-to have a word with the Prime Minister or any other colleague of mine. Personally I have no official information regarding the proposed' meeting.


Howard Charles Green: Perhaps it can be answered1 further to-morrow.


James Angus MacKinnon: I will look into it and; see.



PACIFIC COAST SERVICE


[Stage Direction]
On the orders of the day:
Mr. H. G. ARCHIBALD (Skeena):: I wish to ask the Minister of Transport a question of' which I have given him notice. Is the new passenger boat which the Canadian National Railways is reported to be negotiating to have-

The Budget-Mr. McGarry
built for the Pacific coast service to be built in the Canadian National dry dock at Prince Rupert; and if not, why not?


Lionel Chevrier: I received notice of the hon. gentleman's question, and made inquiries of officers of the Canadian National Railways. I have been informed by them that tenders have been asked of all shipyards in Canada for the *construction of a new vessel for passenger and freight service to be operated by Canadian National Steamships on the Pacific coast.
Prince Rupert Dry Dock and Shipyard is not quoting, inasmuch as the staff of technicians and workmen at that plant has now been reduced to a peace-time basis. Now that the war-time emergency has passed it would be uneconomical to maintain at that plant the necessary technicians and staff that would be required for shipbuilding operations. It is anticipated that work at the yard will in the future be limited to ship repairs and overhaul.


Mr. SINCLAIR:: Will the ship be built in the shipyards of North Vancouver?


Lionel Chevrier: Consideration will be given to that.



THE MINISTRY


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, my attention has just been drawn to an item which appears in an evening paper in the city. I am unable to gather whether the news editor had run short of news, or whether the item was intended as humour. The first paragraph of the article is as follows:
Labour Minister Humphrey Mitchell is believed yesterday to have resigned from his cabinet post.
It goes on to say:
The resignation was not accepted by Prime Minister Mackenzie King, and Mr. Mitchell's office to-day denied the report.
The labour minister agreed to continue as head of the federal labour department after talking with the Prime Minister, it was said.
The article then proceeds to give the alleged reasons. I have had no conversation with the Minister of Labour concerning resignation or anything resembling resignation. I am perfectly sure that Mr. Mitchell has had nothing of the kind in his mind.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, July 16, consideration of the motion of Right Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do not leave the chair for the house [DOT]to go into committee of ways and means, and the amendment thereto of Mr. Maedonnell, and the amendment to the amendment of Mr. Maclnnis.
Mr. M. E. McGARRY (Inverness-Rich-mond):: Mr. Speaker, when the house adjourned last night I was attempting to draw a comparison between income tax exemptions in Canada and those of other countries of the commonwealth, and I think all will agree with me that the contrast is veiy favourable to the Dominion of Canada.
I do not think it is fair to argue that there should be a drastic reduction of the staff of the civil service at this particular time, particularly when so many restrictions yet obtain and will obtain for some time, and when we consider the number of civil servants who are needed to administer the social and other legislation which has been put on the statute books since 1939. I need mention only the Unemployment Insurance Act, 1940, and the Family Allowance Act of about a year ago.
While mentioning the Family Allowance Act, with your permission, Mr. Speaker, I may be allowed to make a few remarks with regard to this piece of social legislation. It has been in force for about a year, and I am sure that all will agree that it has rendered a great deal of benefit to the children of Canada. And that was the hope, because when the measure was brought before the house parliament favoured it and was unanimous in adopting it. Certainly some abuses have arisen, but compared with the benefits afforded our children the abuses have been almost nominal. The government has paid family allowances to 1,420,233 families in respect to 3,330,763 children. The average allowance per family was $14.04 per month, and the average allowance per child was $5.98 per month.
In regard to the size of families, eighty-one per cent had three or fewer children, and a check-up and verification of the original registration has revealed very few abuses. As a matter of fact there were only two prosecutions in, the whole of Canada. A bill has been passed in the British House of Commons providing for family allowances to come into
The Budget-Mr. McGarry

effect in August of this year. This shows that the great country which we were always asked to follow in respect of legislation and otherwise has this year followed a precedent set by us. Thus we have in this great commonwealth Australia, New Zealand, Great Britain and Canada all participating in the benefits which go with this family allowance.
This government has accomplished much, during this year of demobilization and reconstruction; but after all the government can do has been done, it remains for the people of Canada, the individuals, as usual to do the planning and to contribute their support in the occupations in which they have knowledge and skill. Governments may make plans. Some of them are practical, and sometimes they are necessary, but most of the planning must be devised and carried out by whom?- by farmers, fishermen, manufacturers, traders, merchants, and all others in the various fields of endeavour. It is encouraging to discover, however, at this particular time that many of these plans have been put into practical operation.
It is generally realized that in Canada employment conditions are dependent to the extent of twenty-five per cent at least on our export trade. It is also true that to sell on a basis of quality and price in an export market under competitive conditions it is necessary that a well-organized Canadian manufacturing system be maintained in the domestic field. International trade is, and should continue to be, a great cooperative enterprise between dominion and provincial governments, their trade commissioners, agencies, farmers, manufacturers, miners, lumbermen, fishermen, importers, bankers and transportation men. All are consumers and all should work together continuously.
In my effort to conclude my remarks before eleven o'clock last evening I refrained from making brief reference to certain remarks made by some hon. members on the other side of the house. Since it was necessary for me to adjourn the debate at that time I shall now take a few minutes to make these brief references.
First I wish to refer to the gloomy diagnosis or prognosis of the hon. member for Yorkton (Mr. Castleden) as to the effect of the legislation dealing with taxation of cooperatives. I, like the hon. member for Yorkton, am sympathetic with the cooperative movement. I was one of the first to become a member and to take shares in our local cooperative. The officials of the wholesale cooperative located at Sydney, which supplies forty-seven retail stores on the island of Cape Breton, can vouch ^ 
for my cooperation in their efforts to improve and expand their business. I may not be able to explain in detail all the intricacies of the policies and objectives of the cooperatives, but there is one reverend gentleman, Doctor Coady, who no' doubt has full understanding of the entire set-up, its aims and intents.
Doctor Coady has been the organizer, the initiator and the developer of the cooperative movement throughout the maritimes. He is now and has been for many years the director of that movement. What does Doctor Coady say of the legislation dealing with cooperative taxation? He has said it over the radio; he has expressed it in the press. This is what he said: "I am well satisfied with this legislation." After hearing the comments of the director of the maritime cooperative movement, who should know the facts of this legislation better than any other person in the maritimes at least, what attitude should I take? Common sense should dictate the answer.
There is another matter to which I should like to refer. I consider the criticism of the hon. member for Muskoka-Ontario (Mr. Macdonnel!) in dealing with matters of taxation, economy and expenditures, most inconsistent to say the least. He urged tax reduction, greater economy and greater expenditure. This is what one might call a paradoxical miracle. The Progressive Conservative proposals in the resolutions which issued from the recent Ottawa meeting of the dominion association are examples of this paradoxical miracle, and rather than offer my own criticism directly, since I have such a high regard for the hon. member, I shall read, with your permission, Mr. Speaker, what the Financial Post had to say about these resolutions. Every hon. member in the house knows what political party has the sympathy of the Financial Post. This is an excerpt from that paper:
Spend more public money and cut taxes is the paradoxical miracle that Progressive Conservatives propose in the resolutions which issued from last week's two-day Ottawa meeting of the dominion association. It is sheer nonsense to promise in the same breath big tax Cuts and big increases in government spending. It is just irresponsible to set down a long list of grandiose new expenditures and to foster the already rampant delusion that government has some magic pool of money to draw upon for bestowing painless pleasures on the voters. The fact that this batch of resolutions is so evidently designed to catch votes does not excuse it. The Progressive Conservatives are Canada's official opposition. That gives them a responsibility and .a job to do. But -what sober notice and informed respect will the opposition command when it comes to the debate on the esimates? What will be the force of opposition queries when, _ in its own platform, it devotes all its attention to where the money goes and none to where it comes from? It is time the Progressive Conservatives figured out the basic political beliefs for which they stand. Attempts

The Budget-Mr. Skey
to be all things to all men never succeed. With taxes as they are to-day, the old political hocus pocus of trying to win power by promising to spend more money than the opponents won't work. The Progressive Conservatives would do well to repudiate their Ottawa pronouncement and draft a new one.
In closing may I observe that on our confederation birthday, July 1, we found our political system unimpaired despite the fact that the strains through which we have passed may have led outside observers to believe that they would disrupt our economy. Our economic system has given us unexampled prosperity at a time when most of the world is destitute. Our capacity to produce wealth exceeds the utmost hopes of the men who founded our state a lifetime ago, and millions of people beyond the seas depend upon us for their daily bread. Moreover, we have learned much in the management of our society, in the fairer distribution of its wealth, so that despite the outpouring of treasure and resources in the war and in the rehabilitation period, the average Canadian and his family live better to-day than ever before, and I would be safe in saying better than any other family on the face of the earth. No nation of our population anywhere at any time in history has equalled the material achievements of Canada in its brief lifetime of three generations. For bringing about this happy condition much credit must be given to the Minister of Finance (Mr. Ilsley); much credit must be given to this government. In carrying on the war and in applying measures to deal with rehabilitation in the peace period they have exercised foresight rather than hindsight. They showed that three hours after war was declared by passing the wartime prices and trade board regulations. What effect has it had? In the first place it has cut out profiteering and has prevented our prices from rocketing to the dizzy heights of the period following the last war, after which they dropped to a subnormal peace-time level which was followed by a period of depression, which brought with it hardships and horrors almost as great as those caused by the war itself. So I say if we find ourselves in the happy position that the outside world looks upon Canada as an example, much credit is due the man who presides over the treasury, and a great deal of honour and respect should be accorded this government which, through the strain and trials of war and the additional worries of rehabilitation and reconstruction, has brought this country to a position, economically and financially, that is unexecelled by any other country in the world.


Mr. L. W. SKEY (Trinity):: Mr. Speaker, when I last spoke in the house, in the debate on the address in reply to the SDeech from the
throne, I mentioned that I thought a dominion-provincial labour conference was almost as necessary as a conference on taxation. Before I proceed with what I wish particularly to say I should like to express the hope that our committee on industrial relations will be successful-perhaps as successful as a dominion-provincial labour conference might have been -in bringing a measure of relief in Canada's labour problems. I should like to say also that I hope the committee will be given all assistance and full cooperation by both labour and management, and that no obstructions will be placed in its way by any political party or by any action of the government or the opposition.
In rising to take part in the budget debate I should like to again place on Hansard the amendment moved by the hon. member for Musk oka-Ontario (Mr. Macdonnell), which I support. It reads:
This house regrets:
(1)	That the budget does not provide for tax reductions in the calendar year 1946;
(2)	That the budget gives no indication of any serious attempt to eliminate extravagance or effect economies in the cost of government;
(3)	That the policies of the government are discouraging much-needed production.
It seems to me that very well sums up the inadequacies of the present budget.
I should like first to call attention to housing. This is one way by which we could provide employment, improve our standard of living and produce an asset for the country the cost of which would be paid off in time, without increasing the national debt. In 1945, according to the report of the Minister of Reconstruction (Mr. Howe) about 44,000 houses were built in Canada. As yet there has been no official estimate for 1946, but the industries which produce the fixtures necessary for houses have said that 35,000 houses is the most that can possibly be constructed if they are to be completely fitted out, and that with more strikes and more labour difficulties in the country we shall be lucky to get 25,000 completed this year. Back in May, 1945, this government was campaigning for reelection to office. They had some very fine advertisements in the newspapers, one of which I hold in my hand, appearing in the London Free Press of Tuesday, May 15, 1945, headed, "Liberal policies create post-war opportunities for all." Item No. 8 in a list of twelve contained in the advertisement states:
The Liberal government's new $400,000,000 National Housing Act enables hundreds of thousands of Canadians to own their own homes. In the first year after Germany's defeat, at least 50.000 dwellings will be built. _ Low rental housing schemes are included. This means hundreds of thousands of jobs for the building
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trades and allied industries-many thousands more for people who make furnishings and home equipment.
Well, I would call attention to the fact that according to the figures of the Minister of Reconstruction, this promise has not been fulfilled. That was on May 15, 1945. Now we come to June 6, 1945, when the campaign was getting a little warmer. In the Toronto Star of that date appeared this advertisement:
Just plain sense! . . . The Liberal administration can say with honesty and justice: This is the government which has directed Canada's war effort at home and 'abroad. This is the government which during the war worked out a programme of full employment and social reform . . . Let the Liberal government finish its work.
Then item No. 3:
The family's choice . . . Fifty thousand homes immediately . . .
Not just this -year, but immediately-and this is five days before the election.
. . . one hundred thousand houses each year for ten years. Instalments as low as $9.58 per month under the new national housing plan.


Gordon Graydon: Heaven on earth.


Lawrence Wilton Skey: Well, it was only five days before the election. I mention this because a day or so ago we heard the Minister of National Defence (Mr. Abbott) call the attention of the house to a speech by the leader of the opposition (Mr. Bracken) entitled, "John Bracken's charter for a better Canada." The minister endeavoured to show that we were now advocating economy, but that our present stand was not quite in accordance with our election platform. The minister took part in the debate, and his constructive contribution was "John Bracken's *charter for a better Canada." The hon, gentleman presented it very well and gave us some good advertising, showing what this party would have tried to do had it been in power. The minister also endeavoured to show that of the total amount being requested by the government only $170,000,000, approximately, represented controllable expenditures while all the rest was composed of fixed charges, and he said he could not see any place for economy. That same evening the hon. member for York South (Mr. Cock-eram) presented figures which appear at page 3420 of Hansard, showing that in the minister's own department the navy now has 1,601 officers and 6,388 men, or one officer to command four men. Any military man will know that this is an uneconomic military organization. The incredible thing, however, is that the minister also has 10.187 civil servants to administer the affairs of this force, totalling fMr. Skev.l
7,989; and he rose in this house to say that economies were not possible in the government at the present time.
One other subject to which I should like to speak before I come to the budget proper is the recently published report of the royal commission respecting public officials and other persons who might have communicated information to agents of a foreign power.
Some weeks ago when the crown companies bill was before the house I took the opportunity to suggest to the government, through the Minister of Reconstruction and Supply, that additional measures be taken to ensure that Canada's crown companies, especially those dealing with secret war materials, crown arsenals and matters connected with atomic energy-the plant at Chalk river-should be protected in relation to the personnel employed by them. As was stated in a press report, I was brushed off by the minister. I am pleased to see however that my views as expressed at that time are borne out by the recommendations of the royal commissioners, whose third recommendation is that all security measures be coordinated and rendered as nearly uniform as possible.
The press report indicates clearly that the Labour Progressive party in Canada was used as an instrument for the recruitment of red cells for purposes of espionage against the Canadian people. Shortly before the report was published the annual meeting of the Labour Progressive party was held in Columbus Hall, Toronto. Here is what the national leader of that party said on June 3 of this year-I quote from the Globe and Mail:
"We want 10,000 new members this year. We want a mass Marxist party, a party of communists." Premier Drew of Ontario, Prime Minister King and Premier Duplessis of Quebec were the particular targets on which Tim Buck directed his fire.


An hon. MEMBER:: Hear, hear.


Lawrence Wilton Skey: I am glad I have a little
support on the other side of the house. Then, an editorial which appeared two days after that meeting stated:
Thus easily did Mr. Buck cut the lines with the party's recent past. No longer is it necessary to travel in the convoy of a Liberal party alliance. That union which consummated in the North Grey by-election reached into the Ontario legislature and lasted through the provincial and federal elections of last year. The emphasis has now shifted from political to industrial trouble making.
I have not put this on the record to make difficulty or trouble but rather to place it before the government, because there is now a clear duty placed upon them to tell the

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country whether it intends to give consideration to the advisability of allowing the communist party to continue to spawn red cells in Canada.
I now have a somewhat milder recommendation to make to the government, and it is that the Minister of Finance, who through five or six years has borne the difficulties of finding money for Canada and who, as the Prime Minister said the other day, needs a well-earned working holiday at Geneva, be relieved of some of the difficulties and responsibilities now placed upon his shoulders. I make this recommendation in the light of the budget now before us. It seems to me that of necessity some controls must continue for some time. It must follow from the budget that for many months there will continue to be a scarcity of goods in Canada. As a result of that there is no doubt that the wartime prices and trade board must continue to function; and, as stated by the Prime Minister, it will continue. Therefore I recommend to the Minister of Finance that his colleague, the chairman of the wartime prices and trade board, be brought into the cabinet and the House of Commons, where he can bear the load of questioning, accept a share of governmental responsibility, and take that measure of load from the shoulders of the Minister of Finance. I believe this would relieve the minister of many onerous responsibilities he now carries, and would also place the chairman of the wartime prices and trade board in a cabinet position, where hon. members who, on occasions, have had reason to complain that they did not get all the information they wanted, would be able to question him directly.


Mr. BERTRAND (Laurier):: Would the hon. member give him his seat?


Lawrence Wilton Skey: I should like to respond to the request of the Postmaster General (Mr. Bertrand), but I happen to represent a constituency in which the leader of the Labour Progressive party was a strong candidate in the last election. However if the chairman of the wartime prices and trade board would like to contest that seat, he will be welcomed at the next election.
For a moment or two I now address my remarks to the income tax branch. I have received from many employees of that branch a letter expressing clearly their dissatisfaction. They state that there are small opportunities -indeed, practically no opportunities-for promotion or advancement, that they suffer from crowded working conditions, and that the low wages they receive are causing them financial worries at home. I do not know whether they
are different from any other public servants, but if they are being paid at a lower rate I would recommend to the minister that their positions be investigated, and if possible, their quarters improved.
I now turn my attention to the budget. I have received a letter from a constituent of mine in which I believe he has stated some things which should be put on Hansard. This letter, from Mr. Ivory of Toronto, states:
Regardless of the fact that voters at the last election returned some 190 Liberals and Progressive Conservatives as compared with fewer than 30 C.C.F.'ers, the cabinet and the Liberal party generally appear to believe that we want socialism in Canada. Evidently they think that if socialism is introduced in the guise of social security under Liberal sponsorship it will be O.K. But smallpox by any other name is just as deadly; and no matter who gives it to you, it is still smallpox.
During the dominion-provincial conference the Premier of Quebec went on record as saying something which is remarkably similar to the statement made by my constituent. Mr. Duplessis said:
We all remember the old saying: "A rose by any other name would smell as sweet." Well, centralization by any other name would smell as bad and be as dangerous. In my opinion, if we accepted the proposals of the federal government, confederation could not endure.
My constituent goes on to say:
Now, if Mr. Ilsley allowed those in the middle income groups who carry the major part of the income tax burden a "respectable" income tax reduction now, they would have more "take home pay," there would be little reason for strikes for more take home pay, goods would continue to be produced, and since wages would remain more or less stable prices would not have to be increased-hence inflationary pressures would be reduced.
The reasoning of the government, however, is just the reverse of this, and since they will probably, as usual, get their way, they should accept the responsibility for the inflation, unemployment and hardship which may well follow the passing of his budget.
Continuing the discussion of the budget and endeavouring to prove that what I have already put on Hansard is a reasonably accurate estimate of what this budget will do to Canada, I should like to quote what was said by the Right Hon. Minister of Finance during his budget speech as reported on page 2904 of Hansard, as follows:
Production then should be our primary objective both for its own sake in a world that needs goods so badly, and as a safeguard against the present danger of inflation. We should aim now at high volume production for civilian purposes despite shortages, strikes, delays and uncertainties-
I am of the opinion that my constituent is right, that some greater relief in the income tax field would have a tendency to reduce
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the number of strikes, and that this is the field that should have received attention this year. The income tax this year will be the same as it was last year, and there will be no relief until 1947. This is the sort of thing that leads to strikes. Every housewife in the country knows that prices are rising and that as a result of these higher prices their standards of living will drop during the year. I quote again from page 2905 of Hansard, where the minister is reported as having said:
In the first place, the action we take now in regard to taxes should provide whatever stimulus is possible to increased production.
I contend that if you tax a man to the point where he is incited to strike for higher wages you are not providing a stimulus to increased production.
Turning now for a moment to the domin-ion^provincial conference, we find in the1 speech an analysis of what the government offered at that conference. To summarize, there were three categories of agreements discussed-* public investment, social security and taxation. Under public investment there was an offer to the provinces to cooperate, first, in attempting to level off booms and depressions; second, in the conservation of their economic resources and, third, in the timing of planned public works. That is essentially a long-range programme designed to prime the Canadian economy when necessary and keep it on an even keel. I contend that that is a matter which could have been considered separately from any tax agreement; it was not necessary that it should be tied up to any tax agreement. It was a long-range programme; it was a programme of economic cooperation more than one of taxation cooperation.
The second government basis for discussion was in the field of social security, and had to do with old age pensions, public health, preventive medical activities, health insurance, and so on. The government's contention was that this was an integrated offering to the provinces, that it could not be broken down, and in this connection I should like to put on Hansard a statement made by the premier of Ontario as reported in the Globe and Mail as follows:
. Mr. Drew further emphasized that the dominion financial proposals had nothing to do with its proposals for extended health and social services.
He went on to say that these were to be financed by a new superimposed income tax and a poll tax payable bj' every one over sixteen years of age. I shall not go into this contentious matter at the moment, but I should like the house to note that the Premier of Ontario said that this was not an integrated
{Mr. Skey.]
programme. In fact, he emphasized that the extended health and social services were a separate thing and should not have been tied in with any taxation agreement.
The dominion-provincial conference broke down because the provinces were offered an integrated proposal. The eastern provinces might want one kind of help, while the western provinces wanted another. I think I am right in saying that both the central provinces are on record as being in favour of a fiscal need policy for all parts of the dominion. Fiscal need would not necessarily be the same in the east as it is in the west, yet the provinces were offered an integrated programme without opportunity to adjust it to their own particular sectional needs. I contend that had they not been offered an integrated programme agreement could have been reached then with all of them. The man on the east coast does not necessarily need the same kind of service as the man in the prairie provinces or the man on the west coast.
This is what the minister in his budget speech says about the provinces, and this is the only place where I come fairly to grips with the minister. At page 2909 of Hansard the minister in his budget speech says:
Provincial expenditures have expanded greatly. Over-all provincial budgets, brought down for the current year, call for expenditures higher by about $200 million than in 1940.
That is not such a tremendous overexpansion, Mr. Speaker, when compared with the expanding budget of the dominion government, which is now increased 5 times.
This is an increase of roughly two-thirds. If the provinces again become dependent on income and corporation taxes, some will be forced to adopt taxation expedients far more drastic than those employed before the war. Financial pressure on the less-favoured provinces will give rise to increasingly arbitrary and discrminatory taxation, will lead to interference with interprovincial trade and to the extension of government ownership and operation of business merely in order to obtain additional provincial revenues which of course would mean loss of revenues to the dominion.
I do not think it is fair of the federal government to say that the provinces, which kept their taxation agreement one hundred per cent during the war, might employ taxation expedients far more drastic than those employed before the war.


Mr. ILSLEY:: One of the provinces intimated that they would be compelled to do so.


Lawrence Wilton Skey: One of the western provinces?


James Lorimer Ilsley: Yes.


Lawrence Wilton Skey: I must have missed that part in the report of the conference, which I have read with great care. If it is the only province

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*which has adopted socialism, then the remarks of the Minister 'of Finance would be correct when he says that such might lead "to the extension of government ownership and operation of business." The Minister of Finance went on to say, on the same page of Hansard:
Moreover, the arbitrary and discriminatory provincial taxes would come on top of dominion taxes which, while substantially less than at resent, would still be considerably higher than efore the war.
And so the government comes to the rescue of the provinces to prevent all of them except one from taxing themselves out of existence. The minister went on to say:
The dominion cannot stand aside and allow such a situation to develop.
I contend, Mr. Speaker, that it is the dominion government that has caused that situation or is allowing it to develop in those provinces where these wicked provincial governments might start out to tax their people out of existence. In all fairness I do not think the Minister of Finance should say that the dominion government stands here to protect the provinces from being taxed out of existence.


James Lorimer Ilsley: There was no implication of wickedness, but rather of necessity.


Lawrence Wilton Skey: I was using the word emotionally. The minister said:
The dominion cannot stand aside and allow such a situation to develop.
It is my contention, Mr. Speaker, that it is the dominion government's taxes that are causing that situation. The minister went on to say:
It would seriously impair the capacity of private enterprise to provide high and expanding employment. It would weaken and perhaps [DOT]destroy our federal system.
I have been very critical of the federal government's attitude towards the provinces. I say again that it is unfair to imply that those provinces, every one of which kept its taxation agreement with the dominion government one hundred per cent during the war, might be so hard on their own people as to tax them out of existence. It would be less than fair of me, however, to go on criticizing the conference without offering a possible solution of the present problem.
More than one provincial premier who attended the conference last May advocated the establishment of a standing committee on dominion-provincial affairs. I think it was Premier Drew of Ontario who said that we must have a committee on taxation so that we could start to do what the United States government is now doing so successfully, in
connection with which statistics are published such as are to be found in the booklet I have here entitled "A post-war federal tax plan for high employment." Such a committee would study how Canadian taxes could be so imposed as not to cripple our economy, and in fact impose them in such a way as to try to be a stimulus to business. The premiers I believe were all in favour of the establishment of some kind of permanent committee to assist in ironing out dominion-provincial affairs. Such a committee has been established in the United States and is operating successfully.
I would like to quote from the April 1946 issue of the New York State Bar Association Bulletin, in which appears an article by former Republican Senator Lawrence G. Williams. At page 86 he says:
The joint legislative committee on interstate cooperation of the state of New York was created by joint resolution of the senate and assembly and its rationale, and purpose was to encourage greater uniformity between the states, and the states and the federal government, both in the field of legislation and administration. . . The subjects dealt with fall into eighteen divisions and assigned to as many subcommittees.
Then at page 89 he says:
Every state in the union to-day has either a committee or a commission as a counterpart to the joint legislative committee on interstate cooperation in the state of New York. The states are the principals and their agent or clearing house and loyal servant in the counsel of state governments, the main office of which is in the city of Chicago.
I happen to know that this committee has been a tremendous success in promoting interstate trade and harmonious legislation. We in the central provinces should long ago have sought way3 and. means of buying from the maritimes and from the west the things we need: we should be mining our own coal instead of importing it, developing our economy from within, supporting and assisting one another, rather than operating as disjointed parts of one whole body. Therefore I propose that some form of harmonization committee be formed such as they have in the United States, a committee consisting of non-office holders, civilians, selected by the provinces and the government jointly. I propose that such a committee be appointed immediately to look into all dominion-provincial affairs in an attempt to straighten out the impasse to which we have come.
It seems to me that the dominion-provincial conference should be reconvened. In the light of what has happened, in the light of the replies that have been made to the offer contained in the federal budget, in the light of the views of the provinces in the west and in the light of some of the silence in the
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east, I think it would be wise to reconvene the dominion-provincial conference rather than just sit and wait it out as the government is doing at the present time.
There is one other matter with regards to taxation to which I should have referred earlier when I was speaking about discriminatory taxation. Hansard, page 2910, left-hand column, contains the following statement by the minister, proviso (a):
The agreeing provinces would agree not to levy any taxes on personal income nor permit their municipalities to do so.
Then further down:
. . . the dominion would be willing to give a tax credit to the individual taxpayer of the amount of the tax he had to pay to the province, up to five per cent of the tax payable to the dominion by such taxpayer.
I take that to mean that the provinces, if they impose a five per cent income tax, will be allowed to keep that five per cent. Now on page 31 of the dominion-provincial conference proceedings the Premier of Quebec had this to say on just such an agreement:
I do not say that is a good example, but we were entitled to a dollar and we were getting five cents according to the 1942 tax agreement. The dollar was given to Ottawa and we got five cents. I do not think that the Ottawa statement here is fair.
I do not see how permission to tax up to the point of five per cent can be considered a fair taxation agreement with any province.


James Horace King: Order. I must inform the hon. member that his time has expired.


Mrs. GLADYS STRUM (Qu'Appelle):: Mr. Speaker, the Minister of Finance (Mr. Usley) is to be congratulated, not only on the clarity of his presentation in giving the budget to the house, but on the endurance record he has set for this debate. It is no easy thing to sit for hours on end day after day and listen to your youngest and, no doubt favourite financial offspring being chastised constantly by the opposition. If there had not been a serious omission like the failure to deal with old age pensions I should have taken pity on the minister and resisted the urge to speak at this time. However, this omission is of so serious a nature, that I feel that I should not let this opportunity pass to speak for these people who are not able to speak for themselves.
In spite of the rising living costs over the war period, there has only been one small adjustment in the payments made to old age pensioners. In 1943 the federal government agreed to add its S3.75 to the SI.25 to be paid by the provinces in order to make an increase of $5 a month on the basic S20

a month payment. However, this does not mean that every old age pensioner gets S25 a month; it depends on the province in which he lives and the generosity of the administration carrying out the act. The iniquitous means test works out so that, if it can be shown that you are living in the home of a relative and that you do not need to pay so much for rent or for other accommodation as you otherwise would, the pension is reduced accordingly. The old age .pension inspector advises his office of this fact or of any other fact for which he can have an excuse to reduce the pension, and less is paid. If the old age pensioner has any laudable and worthy ambition to earn some money and has the health and strength so that he can add to his pension, and the inspector finds out about it, the man's pension is reduced until, it is assumed, he will have used up the amount of his earnings to reduce his income so that he shall not have more than S425 at the present time, including the pension.


Mr. IRVINE:: That stimulates the "free
private enterprise."


Gladys Grace Mae Strum: 
James Lorimer Ilsley: The hon. member is referring to a married person.


Gladys Grace Mae Strum: 
Some hon. MEMBERS:: Oh, oh.


Gladys Grace Mae Strum: Of course that is a Tory idea, but neither the Liberals nor the C.C.F. are fooled. They know and we know that the great dividing line between the C.C.F. and the two old parties is this problem of social ownership; they know that is where we part company. We believe that the wealth of the country should be owned by the people of Canada and that this social ownership should take three forms.
First, there should be social ownership through cooperatives and, second, social ownership through municipal bodies. One of the best examples of this that I, know of is the city of Regina which owns its own power 63260-224
company, streetcar lines, bus lines and water supply. If you go to Regina you can ride on the streetcar for a five, cent fare. If you studied the financial statement of the city you would find that these utilities put a million dollars into the treasury last year. That is money that will not now have to be raised by a levy on the taxpayers of the city.
In addition to cooperative ownership and municipal ownership, we should have provincial ownership and federal ownership of the great facilities which extend from coast to coast. We shall have it because the people of Canada are not stupid; they are learning from the other members of the commonwealth how government can serve the needs of the people.


Mr. NORMAN JAQUES (Wetaskiwin):: Mr. Speaker, I have not prepared a speech, but there are a few remarks I should like to make with reference to the budget and to some of the things that have been said by previous speakers. I shall not attempt a financial analysis of the budget but will leave that to the experts. There are one or two things for which practically everybody in Canada condemns this budget. According to my own correspondence, the first is the taxation of low incomes. I think all Canadians agree that there should be a taxation exemption of $2,000 for married people and SI,200 for single persons.
According to my correspondence, which is quite heavy, another bone of contention is the taxing of private business and cooperatives. According to what the C.C.F. say, apparently we should discriminate against private industry becaue it is being carried on for profit. What in the world else does anybody carry on business for? Show me a farmer who says that he is not farming for profit and I will show you a farmer who has escaped either from a lunatic asylum or a penitentiary. I have farmed myself for thirty-five years and I do not think I am much below the average where the question of morals is concerned.
If it can be shown that cooperatives are being carried on without profit, then I agree that there is nothing to tax. But if it can be shown, that cooperatives use their profits- I do not know of a better term-in order to expand their business, then I cannot see why private business which does the same thing should be discriminated against, merely because of a sophistry that the one carries on for the benefit of the people while the other carries on to make a profit.
I have pointed out before in this house that the whole idea of profit is based upon a hope that an undertaking will be profitable because it will supply a public need. Unless a busi-

The Budget-Mr. Jaques

ness is supplying a public need, it is not likely to be profitable unless it is in the nature of a monopoly. We social crediters are absolutely against the idea of monopolies and we do not see that the cure for private monopoly is to create public monopoly. To my way of thinking, both are evil and both should be avoided at all costs.
I think all Canadians will agree with what was said so eloquently by the previous speaker about old age pensions, not only for the old but for the blind and unfit. I have not the time to go into this matter in detail, but I wish to say that old age pensions should not be fixed on the basis of money. To me the whole question is: Can we or can we not produce sufficient goods in Canada to supply the old, the infirm and the blind with enough properly to feed, clothe and shelter them? If we cannot do that, then it is time we stopped talking about the marvellous richness of Canada. Personally I do not think there is any question that Canada can produce ample food, clothing and shelter to look after our old and infirm people in a decent and proper manner.
Before we export goods to foreign countries by means of long-term credits, we should look first to the old and needy in our own country. Exporting our *production under long-term credits is pure inflation. If the government's object is to defeat inflation, why do we have such propaganda as is carried on by the Canadian soviet friendship council to encourage the exporting of goods to Russia on long-term credits?
I have not the time to deal with more than one or two items of unnecessary government expenditure. I should like to refer, first, to the film board, which, I understand, has 700 employees and whose sole purpose is propaganda. I take it that the people of Canada, the grown-ups, the adults, like the people of any other country, want to be amused, entertained by the radio. They do not need to be educated, they do not need to be instructed, and of those who say they do I would ask: Who is to do the teaching? Who is to do the instructing? I believe that the film board and the Canadian Broadcasting corporation have for years been the means of spreading communism, and that is very largely owing to their propaganda that we have the situation that we undoubtedly have in Canada at this time. Do not let anybody make the mistake of thinking that when we have rounded up the last of the spies, that is the end of communism and the end of traitors in Canada. tMr. Jaques.]
With regard to the C.B.C.-I have already referred more than once to its red network- I should like to quote a letter from a constituent of mine:
Dear Sir:
We are to-day registering our very great disapproval to the Prime Minister of the allocation of time by the C.B.C. to the different parties, especially to our own social crediters. The idea of putting social crediters in the same category as these "adjective" communists burns us up.
I want to make the strongest possible protest against this time given to the Labour Progressive party. Here we have mi organization which has been identified by the royal commission as a spy network, beyond question working to undermine and destroy this country, the Labour Progressive party. They have not a member in this house. The one member they did have is now in prison for treachery. They do not run a single provincial government. The social crediters have thirteen members of this house, and for ten years they have conducted the government of the province of Alberta. Yet we get only the same amount of time as is allowed to the communists, the fifth column Labour Progressive party. There is something wrong somewhere and I want to make the strongest protest I can make against that. It is about time that we cleared off the C.B.C. speakers like Raymond Arthur Davis, Elmore Phil-pott and others and put on a few patriotic Canadians, instead of the agents of Moscow. It is not altogether fair to blame the spy ring-and they have not all been caught either. For years there has been propaganda, advocating the surrender of Canadian sovereignty. I have brought attention to it myself in this house. I can remember the film, "Mission to Moscow", which was introduced by the Prime Minister of this country (Mr. Mackenzie King) as the truth at a mass meeting in Maple Leaf Gardens, Toronto. That film has since been proved to be a lie from start to finish-pure propaganda from Moscow. That is one instance of it.
This Canadian soviet friendship council is another. That was identified last February, I believe, by the police as part of the spy ring, and I wrote a letter of protest against the council. But since then they have held meetings in the various provinces for the purpose, as they say, of promoting friendship with Soviet Russia, but the real purpose, of course, is to sell communism to the people. Not only that, but those meetings have been sponsored by the leading people of the provinces, from the lieutenant-governor down to the local mayor.

The Budget-Mr. Jaques
Coupled with that is the Canadian Zionist league. I say, coupled with it, because the directors of one are the directors of both. One begins to see the real aims of the Canadian Zionist league. Personally I have never been able to see the difference between communism and fascism, and I do not believe there is any fundamental difference between them. Let me quote Friedrich A. Hayek on that point. In his book, "The Road to Serfdom," he says, at page 184:
And, undoubtedly, not merely the ideas which in Germany and elsewhere prepared totalitarianism but also many of the principles of totalitarianism itself are what exercises an increasing fascination in many other countries. Although few people, if anybody, in England would prol>-ably be ready to swallow totalitarianism whole, there are few single features which have not yet been advised by somebody or other. Indeed, there is scarcely a leaf out of Hitler's book which somebody or other in England or America has not recommended us to take and use for our own purposes. This applies particularly to many people who are undoubtedly Hitler's mortal enemies because of one special feature in his system. We should never forget that the anti-Semitism of Hitler has driven from his country, or turned into his enemies, many people who in every respect are confirmed totalitarians of the German type.
Put into plain English, I take that to mean this. Fascism you can describe as Gentile communism, and communism you can describe as Jewish fascism. I believe that is as near as you can get to it.
So far as the socialist ideas expressed by hon. members to my right are concerned, may I say that I have been familiar with socialism for thirty years or more, and I have not in the slightest degree altered my opinion that private enterprise, when it is not controlled, when it is not allowed to become monopolistic, when it really is private enterprise, has and does and will produce a far higher standard of living than any planned production that has yet been thought of.


Mr. MacNICOL:: You are correct.


Norman Jaques: The whole case of socialism to-day is based on the false picture that is being painted of Russia-I have not time to go into it-but communism is the logical end of socialism. Communism is Marxism, the ultimate achievement of Marxism. As somebody has said, communism is merely socialism in a hurry. The information I get from my relatives in England-and I am happy to say that I have quite a number of them still living -is that they are not at all satisfied with the treatment they are getting at the present time from their Socialist government. I happened to read in the paper just this week that thousands of housewives paraded to parliament to protest against, bread rationing.
63260-224J


Mr. BRYCE:: Blame the Winnipeg grain exchange.


Norman Jaques: No, I will not blame the Winnipeg grain exchange, not in the slightest. If you want to know whom I blame, and whom I think the world will blame and, in fact, is now blaming, I will tell you. The basis of the protest of these people in England is this. They do not mind tightening their belts to feed starving people, but they are beginning to doubt in their minds as to who is getting the food which would otherwise be theirs. They do not trust the distribution; they begin to see that there is a lot of Strachey communism mixed up in it.
In closing, I cannot let this occasion pass without a reference to the late General Mihailovich, who was shot this morning. I made reference to General Mihailovich when I spoke on March 25 of this year. I then said as reported in Hansard, at page 238:
I am going to say a word on behalf of General Mihailovich, who, I am sorry to say, has been captured. I know the stories that have been told; I know the other side, too. Let me quote a statement of the British ambassador to Yugoslavia, which is good enough for me.
I then quoted the ambassador as follows:
All the accusations of the partisans that Mihailovich is a fascist, collaborating with the occupational forces, are completely unfounded, *and spring entirely from the efforts of the partisans to blacken Mihailovich among the Serbian population, and frustrate him when the moment comes to seize power in the country. General Mihailovich from the beginning of the struggle has loyally collaborated with the allies and no one can doubt his loyalty as an ally or as the representatives in the country of the Yugoslav government.
The statement then was doubted by some, but Tito has condemned himself by speaking the truth at last. In a Reuter dispatch from London, dated July 15, he is quoted as saying this:
The trial showed there is not only unity among the reaction but also among all democratic forces. Mihailovich associated with all forms of reaction at home and abroad. He did not shrink from having connections with the Catholic church, with the Croat peasant party. It was a coalition of reaction, and this coalition was defeated.
Yes; it was a Christian and a nationalist who was shot this morning; and my answer to Tito and all the rest of the bloody murderers is this: I will quote a little Christianity to them, not that I think it will do them any good. It applies as well to all totalitarians, to people who, when they meet opposition, have only one remedy, and that is to liquidate it, as millions have been liquidated in Europe since the war started,
The Budget-Mr. Jagues

as they are still being liquidated, and as we shall be liquidated if those devils ever get the upper hand in this country.
I saw something of these "Reds" in the United States a week ago. I was guest speaker in the city of St. Louis at a mass meeting called in-the interests of Christian nationalism. It took 700 policemen to keep order and preserve freedom of speech in the city of St. Louis. The deputy chief of police came to our hotel and told my wife and myself that he would afford a proper escort for our car between the hotel and the auditorium. We had four police cars, and when we arrived at the Kiel auditorium there were 3,000 communist pickets outside the building trying to get in to break up the meeting. It took 470 policemen in uniform and 200 in plain clothes to restrain them, and the deputy chief of police told us that in reserve they had a gas-bombing squadron in case the thing got out of hand.


Some hon. MEMBERS:: Oh, oh.


Norman Jaques: It is no laughing matter. We were told that the communists had sworn that this meeting would not be held. Thanks however to the police of St. Louis, we held our meeting of 800 people without a single interruption.
But let me finish by quoting, for the benefit of the Titos, the 44th verse of the eighth chapter of the Gospel according to St. John:
Ye are of your father the devil, and the lusts of your father ye will do. He was a murderer from the beginning, and abode not in the truth, because there is no truth in him. When he speaketh a lie he speaketh of his own; for he is a liar, and the father of it.
On motion of Mr. Jaenicke the debate was adjourned.
At six o'clock the. house adjourned without question put, pursuant to standing order.
Thursday, July 18, 1946.