1946-08-20

[Stage Direction]
On the order for motions:
Right Hon. L. S. ST. LAURENT (Acting Prime Minister): Mr. Speaker, I have now had an opportunity of investigating that grave matter of a breach of the privileges of the house about which the hon. member for Lake Centre and several newspapers have been so seriously concerned.
On Friday last the hon. member, after reading the terms of order.for return No. 258, said:
A perusal of the documents produced yesterday shows that in spite of the fact that parliament passed the order without any qualifications that any documents should be refused, a number of the letters have been deliberately omitted and the file is in the position of having been stripped and denuded of four known letters, as well as others. The four letters which do not appear in the file are the following:
(1)	A letter from Mr. Robinette, K.C., of Toronto, dated March 22, referred to in letter of March 26.
(2)	Letter from Mr. Miall to Mr. Anderson, dated the 26th of March.
(3)	Copy of letter, October 12, from Mr. Robinette, K.C., sent to Mr. MacNamara, the deputy minister.
(4)	Letter of the deputy minister of justice to Mr. MacNamara, dated the 19th of October, 1945.
These four letters are referred to in the correspondence produced, but have not been produced.
When the hon. member made that statement I felt, as I am sure all hon. members who heard it must have felt, that it must be serious or no hon. member would be making it. On examining the file this is what it reveals: two of the letters which were alleged to have been deliberately omitted, of which the file had been "stripped and denuded", which, according to the statement, do not appear on the file, are there and were there all the time. One of them is the letter from Mr. Miall to Mr. Anderson dated the 26th of March; it is document 4 of the file,; another is the letter of the Deputy Minister of Justice to Mr. MacNamara dated the 19th of October, 1945; it is No. 6 on the file. The other two documents, being letters from Mr. Robinette to the Department of Justice dated, one, March 22 and the other October 12, are, as I explained yesterday, not letters from one department to another-which were the only things called for in the order-but letters written to the

Privilege-Mr. Diejenbaker
Department of Justice by a lawyer acting as such for the department and which, according to the invariable rule, are not produced in parliament. Now, if there has been any "affront to parliament and to the privileges of parliament", it would seem to be only in the fact that the hon. member has once again allowed his zeal about cases which he calls cases having "odoriferous characteristics" to outrun his discretion and has made, quite inadvertently I am sure but nevertheless without sufficient care, positive statements to this house about a document which on its face shows that the statements are just not true.
Mr. J. G. DIEFENBAKER (Lake Centre):: Now, Mr. Speaker, I trust you will allow me to place the record before the house and the country.


Some hon. MEMBERS:: Oh, oh.


John George Diefenbaker: I am not at all impressed by the jeers.


Mr. GRAYDON:: Neither is anybody else.


John George Diefenbaker: And truculence is no substitute for information. The attitude adopted by the Minister of Justice to-day indicates one thing, that there is a very good reason why the government, through the instrumentality of the Minister of Justice, does not produce the record in this case. And I am going to produce the record because it indicates this, sir, not only was there a deliberate attempt to interfere with the course of justice, but that it is connived at and approved and condoned by the Minister of Justice.


An hon. MEMBER:: "Very loud cheers."


John George Diefenbaker: All right: I will give you the facts and then I will read the record, and I will allow the country to decide whether it was I who made the mistake or whether it was my right hon. friend, who to-day participates in the concealment which I criticized the other day. Let me say this to him: I defy him to produce the record; I defy him to produce those letters which have been taken from the record. He dare not do it.


Some hon. MEMBERS:: Oh, oh.
Mr. DIEFENBAKER.: He may laugh and hon. members may jeer. But to-day, when we speak so much of lawlessness in the land, lawlessness on the part of the government is as serious as lawlessness anywhere else.
Here is the record. In the first place, sir, I asked the question:
Have any criminal proceedings been taken or are any contemplated in connection with an
alleged conspiracy arising out of the improper use of army rejection or medical discharges at Camp Borden since 1943?
The answer is no. The next question was:
Was the matter investigated by the R.C.M.P. and did they recommend prosecution?
Here is the answer:
The R.C.M.P. investigated and reported, which report was reviewed by counsel who was acting as agent for the crown in a prosecution case having to do with mobilization regulations. Counsel expressed the opinion that a review should be made by another counsel although he was also of the opinion that the reports indicated a prima facie case.
Counsel in question was Mr. Robinette, K.C., who I am informed was counsel for the prosecution in the case of one Lennox, on March 22, 1945, at the city of Hamilton, Lennox having been charged with having passed one of these fake medical certificates, and he gave evidence there that he paid one Joseph Bagley at the Humber Hotel in Toronto $1,200 for the certificate. He was charged with uttering a false document and received three months. My information is that Mr. Robinette, K.C., an outstanding counsel, set forth the facts and indicated that there was a prima facie case and then another counsel was brought in. What his report was it is not for me to say, but my information is that it too advised that there was a prima facie case.
Now we go on with the record. As far as the Department of Justice is concerned, Mr. Varcoe, the deputy minister, made sure that tlie responsibility did not rest on that department. Here is the correspondence from the beginning. The first letter is dated October 19, 1945:
Department of Justice
October 19, 1945.



A. 4347

[Stage Direction]
Re: Major James A. Elliott, et al. National Selective Service Mobilization Regulations
Dear Sir: T enclose herewith copy of a letter of October 12 from Mr. J. J. Robinette, K.C., the agent of the Minister of Justice of this matter. I shall be pleased to receive your comment thereon.
Yours truly,
(Sgd.) F. P. Varcoe,
Deputy Minister.
The order of this house was for the production of all documents. Is that order met by producing a letter to which an enclosure is referred and leaving out the enclosure which deals with the facts?
Mr. ST. LAURENT: Is not the letter which the hon. gentleman has just read the very letter which he said on August 16 was not there?	-
Labour Conditions
John George Diefenbaker: Sir, the record
speaks for itself. I am reading the record, and it purports-
Mr. ST. LAURENT: Does the hon. member say that it hurts him to find out that it is there after he stated it was not there?


Mr. SPEAKER:: The hon. member knows that he is absolutely out of order. It is the practice of the house, when a member receives an answer, to refrain from debate upon it. It is not supposed to be debated, nor is a statement made by a minister debatable either. I have permitted the hon. member to make his reply, but I thought that he would do so in a few words. I am prepared to allow a little latitude to the hon. member, but if I permitted him to enter into a debate on this question he can see what the result would be. Other hon. members would like to do the same.


John George Diefenbaker: Surely I have the right to reply to an allegation by my right hon. friend. I am putting the record before the house and the country-


Some hon. MEMBERS:: Order.


John George Diefenbaker: Mr. Speaker, may I continue to put the record before the house? Here is a letter dated November 13, 1945:
Mr. F. P. Varcoe,
Deputy Minister of Justice,
Ottawa.
Dear Mr. Varcoe:
With reference to your letter of October 19th relative to prosecutions of Brother Arnold and Major J. A. Elliott of Toronto.
I would recommend that this file he put away for three or four months and then the matter could be reviewed.
I am sure that I will receive the endorsation from the minister for this proposal.
Very truly yours,
(Sgd.) A. MacNamara.
After it has been put away for two or three months a letter is written by Mr. Varcoe a little later in which he sets forth the following on April 10. Your Honour will have noticed that the cooling off period had elapsed:
April 10, 1946.
Dear Mr. MacNamara:
May I have a reply to my letter of March 16, with reference to Brother Arnold and Major J. A. Elliott.
Yours very truly,
(Sgd.) F. P. Varcoe,
Deputy Minister.
Finally on April 16, 1946 Mr. MacNamara wrote to Mr. Varcoe, the deputy minister of justice, as follows:

Dear Mr. Varcoe:
I have your letter of April 10th, File No. 146298 and I would recommend that this file be closed and that prosecution be not proceeded with.
Now there is the record; the omission of counsel's letter from the file, which was part and parcel of the file that should have been brought before parliament; the omission of all the other letters to which I have already referred. First you have the prosecution of Lennox in 1945; you have evidence there given, and you have the report of Mr. Robinette, K.C.; you have the report of counsel, as admitted by the government in its answer, that a prima facie case had been made out; then you have the deputy minister of labour advising the Department of Justice, first, that they allow the matter to remain for three or four months, and finally that there be no prosecution.
I say, sir, the record speaks for itself and the record establishes everything I said. What is more, the rights of parliament are still being flouted by the refusal of the government to produce the entire file in this case which, if produced, will reveal interference with the administration of justice, which ought not to be condoned in this house.



LABOUR CONDITIONS


Hon. HUMPHREY MITCHELL (Minister of Labour):: I wish to table copy of the report of the industrial disputes inquiry commission established to look into the dispute between the Vancouver Province division of the Southam Company, Limited, and the Vancouver typographical union, No. 226. I promised to do so at the request of the hon. member for Vancouver East.
As I promised the hon. member for Winnipeg North Centre on Saturday last., I now table the report of H. S. Johnstone, industrial relations officer of the federal department of labour stationed at Winnipeg, on the claim for pension rights by certain employees of the Canadian Pacific Railway company and associate companies. There are also a number of appendices having to do with this matter.


Mr. KNOWLES :: They are tabled also?


Humphrey Mitchell: Yes.

Income War Tax



AERONAUTICS ACT


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I wish to direct a question to the Minister of Reconstruction and Supply with reference to an order in council to which he referred in the course of the debate on August 17. He indicated at that time that an order in council had been passed advancing the effective date contained in section 14 of the act to amend the Aeronautics Act. I have endeavoured to get a copy of the order in council from the privy council office, but they do not seem to be aware of the order to which the minister refers. Will he indicate the number and date of the order in council?


Right Hon. C. D. HOWE (Minister of Reconstruction):: My legal department calls
my attention to the fact that there was no order in council.


Stanley Howard Knowles: Oh, oh.


Mr. MACKENZIE:: Just like the letter.


Clarence Decatur Howe: It was a cabinet decision arrived at on February 16 last.


Stanley Howard Knowles: The. cabinet decision was taken under what section of the act?


Clarence Decatur Howe: Under the authority of the government. This was the decision:
The cabinet, after discussion, agreed that the time limit for separation of control of air services from that of railways be extended for another year, i.e., until two years after the end of the European war.


Stanley Howard Knowles: I rise to a question of privilege. The section of the act says that it must be done by the governor in council. There was no order in council, and therefore I suggest that the act has been violated.


Ian Alistair Mackenzie: It does not have to be under an order in council; the government decides in council.


Mr. COLD  WELL@: Without the authority of parliament? May I ask the Minister of Reconstruction, or the leader of the house, if either of these gentlemen means to imply that the government has authority to do what is not authorized by this house or by statute?


Ian Alistair Mackenzie: The government of the Dominion of Canada is a responsible body, responsible to parliament and responsible by answering questions on the floor of the house, 63260-320
and whether there is an order in council or not the government can take action and answer to parliament accordingly.


Stanley Howard Knowles: That is not the way the act reads.



INCOME WAR TAX ACT

[Stage Direction]
Hon. J. J. MeCANN (Minister of National Revenue) moved the third reading of bill No. 368, to amend the Income War Tax Act.
Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, I wish to move, seconded by the hon. member for Yale (Mr. Stirling):
That the said bill be not now read a third time, but that it be referred back to the committee of the whole for the purpose of reconsidering subsection 3 of paragraph 3, and subsection 9 of section 13 of paragraph 4 thereof.
It is not my purpose to occupy the time of the house for more than a very few minutes. I simply wish to put ourselves on record as being opposed to the manner in which this measure as it affects cooperatives has been handled from the beginning, and to the form in which it is now found with respect to the taxation of cooperatives. If it was the law prior to the introduction of this measure that cooperatives should be taxed, and if the law was right, it should have been enforced. If the law was wrong, it should have been changed. But the government refused to take either position. It is leaving the impression with the private trade that it is going to tax cooperatives, and it is leaving the impression with the cooperatives that they can so handle their affairs that they will not be taxed at all. The government is simply trying to play both ends against the middle. The net result will be, if this measure is passed in its present form, that cooperatives will be turned into investment enterprises.
The three renjaining objections I have to this bill I shall deal with very briefly. Some of the objections the government has already agreed to have removed, but I should like to refer to three remaining objections.
The first objection is to subsection 3 of paragraph 3, which I suggest with all deference is discriminatory. It provides that new cooperative organizations will be exempt from taxation for three years if they organize after January 1 next; but it does not provide for any exemptions for new organizations formed prior to that time but not yet three years old. I say that this is a discrimination against new cooperatives. If it is a good policy to apply

Income War Tax


Mr. T. J. BENTLEY (Swift Current):: Mr. Speaker, I am not going to spend a long time dealing with this matter this morning.


Some hon. MEMBERS:: Hear, hear!


Thomas John Bentley: I hear cries of "hear, hear" but I do not mind that. I would not take any time at all if I did not consider it a very necessary duty in the interests of the .people of this country. Before saying what I had planned to say may I just remark in passing that the leader of the opposition (Mr. Bracken), occupying the position he does, being closer to the Speaker, and wearing a light coloured suit of clothes, caught the eye of Mr. Speaker before I did; otherwise I would have moved an amendment similar to the one he has moved. However, we shall take a little different attitude than that taken pro 'ously by the Progressive Conservative party; we shall support his motion, though the other day, when we had a similar motion up for discussion, they did not support us. I want to remind the leader of the opposition that everything he said here this morning is about

Income War Tax
a month and ten days late, because I set out the whole position in my budget speech on July 10.
I regret- very much that the Minister of Agriculture (Mr. Gardiner) is not in his place this morning. When he was speaking the other day he took a tremendous amount of credit to the Liberal party for the growth of cooperatives. At page 4724 of Hansard, when this matter was under discussion, in the last paragraph of his remarks he said:
All I wish to say now is that the whole record indicates that the real founders of the cooperative movement in the Dominion of Canada were the members of the Liberal party. Their policies have been behind the cooperative movement; they are still behind it, and when this legislation gets through it will have the support of the very people who my friends of the C.C.F. party are trying to lead us to believe are opposed to it in the province of Saskatchewan.
Since this matter has been under consideration, and particularly since the minister made that speech, I have had many letters from people in the province of Saskatchewan concerned with the cooperative movement, but none of those letters bear out the minister's statement that they support this action. The minister took occasion to refer to a gentleman who was very highly regarded in the province of Saskatchewan, Hon. W. R. Motherwell, and I heartily endorse every personal tribute he paid to that notable gentleman of the prairies. The members of this party take second place to no one in honouring and paying tribute to Bill Motherwell; everybody in Saskatchewan who follows things will do that. He was a grand old rebel, and in the front line of the farm forces all the time in the early days of the century, and -he always had the interests of the farmers and cooperatives at heart. If he -had any fault at all it was his loyal belief that his hopes could be realized through the Liberal party, and he tried to move that party in this direction. Because of his personal ability he achieved a remarkable degree of success, and we honour him for that. His successor, however, cannot lay claim to any such achievement. He has had to be pushed into every progressive movement ever undertaken in our province, and only the fear of the loss of votes ever made him take a stand in support of the progressive movement. So when he takes to the Liberal party credit for building up cooperatives he is far from the facts. The cooperative movement in Saskatchewan was built by the people of Saskatchewan, of all shades of political opinion. It is open to all people, of both sexes, of all colours, all races, all creeds. Those are the people who 63260-320J
built it. Hundreds of them went out on horseback and on foot in the early days in support of these cooperatives.
If the Minister of Agriculture had been correct in his statement it never would have been necessary to remove the Liberal party from power in Saskatchewan. I want to give the house a little history in regard to the record of the Liberal party with regard to cooperatives in that province. A very close personal friend of mine, my seat mate, the hon. member for Humboldt (Mr. Burton), sat in the Saskatchewan legislature from 1938 to 1943, during which time he served on the public accounts committee. During that time the public accounts showed that the provincial government purchased large quantities of petroleum products for their power commission and other government departments, but not a dollar's worth during that five-year period was bought from the consumers' cooperative refinery in Regina, right at the seat of government. Nor did the Liberal government during that period give any business to any cooperative enterprise in the province except in those few cases where farmers who were on relief took their meagre relief slips and spent them at cooperative stores. Practically no government printing was given to what was at that time the only cooperative owned newspaper of that province, the Western Producer, owned by the Saskatchewan wheat pool. In fact their whole record has been one of lip service, with absolutely no record of active, good support.
The bill before us for third reading is a vindication of what I have said previously in this debate and what I am saying now. I have said before, and I say again, the introduction of the provision compelling a cooperative to show a three per cent profit before it can pay dividends and so on is in itself a clear indication of the antagonism of the Liberal party toward the building up of this great cooperative movement. Had it been my good fortune to catch your eye first, Mr. Speaker, I was going to move that this bill be not now read a third time but that it be referred back to the committee of the whole with instructions that it have power to reconsider the provisions already set out in the amendment of the leader of the opposition, and also those having to do with the three per cent tax on cooperatives. As I have said already, our group are going to follow a different line from that of the Progressive Conservatives or of the Liberals. We are not only going to give lip service; we are going to support the amendment moved by the leader of the opposition, as we would have
Income War Tax

hoped-rather faintly-that perhaps some of them might have stayed in the house and voted for our amendment had we been able to move it.


Mr. A. W. STUART (Charlotte):: Mr. Speaker, during the discussion which has taken place on this matter I have sat quietly in this chamber and said nothing. In the county of Charlotte, as I have tried to point out in this house, we have a big fishing industry. During the past five or six years all those fishermen have paid income tax. By way of comparison let me say that in that county, with its population of 25,000 people, the fishermen have paid more income tax in the last six years than have all the farmers in the province of New Brunswick.
In my county there are four or five owners for each sardine fishing right. There is no reason in the world why those fishermen could not form a cooperative and clear themselves from paying income tax, like the farmers in western Canada are trying to do. I believe in fairness; and if one group in the country is going to be compelled to pay income tax- and I have every respect in the world for hon. members who will rise in their places and look after the interests of their constituents-other groups should pay also. There are hon. members in the house who would tax one class of primary producers although excluding another, and in my view that is most unfair. I believe that if every hon. member votes according to his principles he would1 vote to tax all the primary producers in Canada on exactly the same basis.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, we have held the view throughout that the budget legislation dealing with cooperatives was detrimental to the growth of a movement to which thousands of people in this country have devoted a great deal of time and attention, and which they have endeavoured to 'build up to meet their own needs.
On July 8 we moved a subamendment to the amendment moved by the official opposition. The official opposition of course had already moved its amendment, and in it there was no criticism of the taxation of cooperatives. May I point out that in our subamendment we said:
That the budget fails in its tax proposals to recognize the principle that cooperatives are non-profit-making organizations.
I have been unable to understand why, at a late date, the official opposition suddenly picked up this view, a view they had officially opposed by voting against it. My experience throughout the years, when this has been

under discussion, has been that Mr. Thorvald-son, president of the Income Tax Payers Association, so called, who was responsible for the circulation of thousands of cards in this country, and also the only Progressive Conservative member from the city of Winnipeg who sits in the Manitoba legislature, represents the point of view of the party rather than the leader of the official opposition (Mr. Bracken).
However, I am glad indeed to have an opportunity of voting for reference back to the committee this morning, because that is precisely what we had intended to do had the amendment not been moved first.
I do say this, in the interests of open, free and frank discussion, that hon. members who sit in the house-on all sides of the house- who have expressed disagreement with the position we take regarding the taxation of cooperatives, should rise and express their opinions so that the country may know exactly where they stand in this matter.
I think this proposal transcends party issues; we have said that throughout. It so happens that this party, in common with others, and in common with other people in various parts of Canada, takes the view that these, nonprofit organizations should neither be taxed nor compelled, as the leader of the opposition has said, to operate as investment corporations.
To my mind, apart altogether from any other provision of the bill, the proposal to compel cooperatives to compute interest of three per cent on the capital employed strikes at the very roots of cooperative philosophy, cooperative thought and cooperative endeavour.
I shall not prolong the discussion, because I believe this matter has been thoroughly discussed, and little more could be added to it. I do say, however, as leader of this party, that we intend to support the amendment moved by the leader of the opposition.
Mr. SOLON E. LOW ({Peace River): Mr. Speaker, I would say just a word on behalf of the Social Credit group respecting the amendment offered by the leader of the opposition (Mr. Bracken). I am not at all interested in the fight for place that seems to be going on between the two parties sitting to my right. It does not matter to me who receives the credit-


Major James William Coldwell: Or to me.


Mr. LOW:: -for the moving of this amendment. I find however that this group is favourable to the amendment proposed this morning. Because of the fundamental differ-

Income War Tax
enees between cooperatives and corporations it is our opinion that, with justice and equity, cooperatives simply cannot be placed in the same category as corporations for taxation purposes.
We are definitely opposed to anything which would be prejudicial to the growth and continuation of cooperatives as a vital force in the Canadian economy. We believe the bill as it now stands before the house for third reading is prejudicial to that growth and continuation. We reiterate the recommendation offered some days ago by the hon. member for Lethbridge (Mr. Blackmore) when he spoke for the Social Credit group in this house. Perhaps I might outline quickly what he said. In the first place we hold that the government should withdraw the bill as it applies to cooperatives, and should concern itself for the next year with the drafting of a new cooperatives act, which act should carefully define what is meant by a true cooperative. In that act it should be made definitely clear that the wheat pools would not be required to pay income tax retroactively. The act should also lay down the conditions which in fairness and equity would make possible the continuation in the future of true cooperatives as a vital organization or group of organizations in the Canadian economy.
Because of the failure of the present bill to do those things, the Social Credit group will support the amendment proposed by the leader of the opposition.


Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, I am sorry I did not hear clearly what was said by the hon. member for Swift Current (Mr. Bentley), but from what I did hear it would seem that he was saying something that has become familiar to those of us in Saskatchewan-that the great friend of the cooperatives is the C.C.F. party. That has been said over and over again, and anyone who has lived in Saskatchewan for any length of time knows that it is an attempt to put something across on the people of Saskatchewan and the people of Canada. Our people know, for example, that long before the C.C.F. was ever heard of, Saskatchewan was noted for its support-particularly under the Liberal party-of the cooperative movement. They know that long before the C.C.F. was ever heard or thought of, one of the greatest cooperatives in the whole world, the Saskatchewan Cooperative Elevator Company, had had its beginning. They know that the Liberal party set up a branch of one of its departments of government for the purpose of promoting, developing, supporting and encouraging cooperatives.
We have been deluged with the suggestion that the present government in Saskatchewan is the first one in that province to have a department of government directly concerned with the development and promotion of cooperatives. Of course everybody in Saskatchewan laughs at that suggestion because the present deputy minister, Mr. Arnason, has just been given another title. Previously he was in charge of a department which had to do with the development of cooperatives, a branch of another department. But by changing the name and making him a deputy minister, by actually appointing a man to be minister of cooperatives, they tried to put the idea across that they are the first people who have actually intervened in the promotion and development of cooperatives. Every C.C.F. member in this house knows that for many years we had a branch of government under Mr. Arnason, the present deputy minister.


Mr. NICHOLSON:: How large a staff?


Walter Adam Tucker: How large a staff? We do not judge the effectiveness of our work by talking about tlhe large number of civil servants drawn from all over the world who are there. Perhaps that is the idea of the C.C.F., and it looks like it. Consider the number of experts they have imported from all over the world. It looks as though they had no confidence in the home grown product; in fact I have heard them boasting about the number of people they have brought in from the outside.
I want to say, and I say this after some study of the development of political affairs, that any movement which feels itself constrained in order to develop itself to base its development upon fallacies, upon partial statements of fact, upon half truths, is bound to be found out in the long run. I want to tell hon. members that that is actually happening to-day in Saskatchewan. Mr. Arnason, the present deputy minister of cooperatives, has been an employee of the Saskatchewan government for at least the last ten or fifteen years.


Alexander Malcolm Nicholson: As what?


Walter Adam Tucker: As director of cooperatives. He is doing exactly the same, work now as he did ten years ago under the Liberal government. There has been no real change of principle in regard to government support and help. The Saskatchewan government supported and helped cooperatives. In that regard there has been nothing but misrepresentation of the facts. That cannot be denied, and every hon. member knows it. They know also that public moneys are being spent by
Income War Tax

the Saskatchewan government to propagate that idea all across that country, that half truth, that misrepresentation. I say to the C.C.F. party that if they have to base themselves upon half truths like that they are not going to get very far in the long run.
I come back again to the Saskatchewan Cooperative Elevator Company, one of the greatest grain handling cooperatives that had ever been developed anywhere in the world up to the time of its being taken over by the pool. Every C.C.F. member who knows anything about the situation knows that the Liberal government of Saskatchewan assisted in the development and promotion of that great cooperative institution. They know that they assisted in the development of the pool elevators, which also was developed before the C:C.F. party was ever heard of.


Mr. McCUAIG:: May 1 ask the hon. member who said "for God's sake read your contract"?


Walter Adam Tucker: The man who said that asked the people who were signing contracts with the wheat pool to read their contracts so that they would know what they were signing. Had some of them read their contracts perhaps they would have known that they were agreeing to join a cooperative institution to which they were pledging themselves, to deliver their wheat for a definite period of years-three years I think it was. Perhaps had they read those contracts many who signed them would not have claimed later on that they did not know what was in them and refuse to carry them out. I do not know what was in the mind of the gentleman who said, "For God's sake read your contract", but I do know that that same man was the man who was placed in charge of the Saskatchewan Cooperative Elevator Company and who brought it from small beginnings to the place where it became one of the greatest farmer-owned and cooperatively-controlled grain handling institutions in the whole world.
*One of the bases of the development of the C.C.F. movement, in Saskatchewan has been the pretence that some of the great servants of the farmers and of the cooperative movement were at heart really not their friends. I have listened to the maligning of great founders of the cooperative movement such as the late Mr. Motherwell.


An hon. MEMBER:: Nobody maligned him.


Walter Adam Tucker: Oh, yes; I have heard him maligned all over Saskatchewan by the C.C.F. who claimed that they were the friends of the cooperatives, that they were the friends of the farmer, and that this man who had given

his whole life to the service of the farmers and the service of the cooperatives had sold out, that he was a traitor to the west. We have heard those claims in the west about people who served the west.


Some hon. MEMBERS:: Oh, oh!


Walter Adam Tucker: I can understand that hon. members hate to be told the truth, because it is coming home a little bit too close. That is the whole trouble. Every C.C.F. member knows that one of the bases on which that movement is founded is the pretence that the people who faithfully tried to serve the farmers and the cooperative movement turned against them. I want to tell them this-


An hon. MEMBER:: Wait until you get to Saskatchewan.


Walter Adam Tucker: I am anxious to get there and tell them.


An hon. MEMBER:: Why don't you go? You have a chance.


Walter Adam Tucker: When I get there some of these half truths and misrepresentations are going to be nailed. Every hon. member here knows that what I say is the truth. One of the reasons why the hon. member for Humboldt (Mr. Burton) supported the Liberal party in days gone by was that he was a great supporter of the cooperative movement. He cannot deny that; I defy him to deny that. I repeat that every man in this house from Saskatchewan knows that the Liberal government of Saskatchewan-*


Thomas John Bentley: What Liberal government of Saskatchewan?


Walter Adam Tucker: My hon. friend was another who supported the Liberal government of Saskatchewan and voted for it because he was a believer in the cooperative movement. There is a proud history behind the Liberal party in Saskatchewan in regard to its support of cooperatives.


Stanley Howard Knowles: A long way behind it.


Walter Adam Tucker: I want to say to the hon. member for Winnipeg North Centre that he reminds me of a meeting which I attended in Rosthern, my home town, and which was addressed by a man for whom I have the greatest respect, the leader of the CjC.F. party (Mr. Coldwell). I remember that one of my arguments at that time was that if liberal-minded men, men who did not believe in socialism but who believed in advanced Liberalism, in reform, would stay in the Liberal party and help fight to make that a real party of reform instead of splitting the forces of

Income War Tax
Liberalism, we might accomplish what we would not be able to otherwise. My hon. friends of the CC.F. remember that. It is upon that basis that I have modelled my life in politics.


An hon. MEMBER:: He was a Tory.


Walter Adam Tucker: No, I do not think the leader of the C.C J\ was a Tory.


An hon. MEMBER :: Oh, yes, he was.


Mr. COLD  WELL@: That was before I cut my political teeth.


Mr. MacNICOL:: The hon. member had good judgment then.	''


Walter Adam Tucker: Before you cut your political teeth-


Mr. HOMUTH:: Now he has lost his teeth altogether.


Walter Adam Tucker: I found that at that time the hon. member seemed to believe that the salvation and the whole hope for the future lay not in the reform of our present system, but in the government taking over the ownership and control of all means of wealth production. That is laid down in their platform.


Karl Kenneth Homuth: You had better move over with the C.C.F.


Walter Adam Tucker: Don't worry; I do not belong to them and I never did. That was the beginning of the C. C. F. party. All liberal-minded people had to look into the situation very carefully, and I tried to do it. I said to myself that a party is what the members of it make it; that if all liberal-minded men throughout Canada would join the Liberal party they could make it exactly the type of Liberal party they wanted to make it.


Mr. JAENICKE:: Did you ever try it?


Walter Adam Tucker: There was this new organization-I know hon. members hate to hear this, because it must bring back searchings of conscience to any people who are conscientious about such things. The point that had to be decided was, am I a Liberal and do I believe in the reform of our present system; or do I intend to start to destroy the foundations of our present system under the pretence that I am advocating reform? I say this to hon. members opposite that when they fight and work to get the support of reformers, of people who believe in the reform of our present system, in order to put into power people who believe in socialism and want to destroy the present system by taking over all the means of wealth production, they are preaching something which is fundamentally false.


Mr. BURTON:: Who is the hon. member talking about?


Walter Adam Tucker: I am talking about the C.C.F. The hon. member understands only too well. I can say that he is one who, I am sure, must be struggling with his conscience day after day; because the hon. member for Humboldt, if I mistake not, is not a socialist. If he is a socialist, let him get up and say so; if he is not a socialist, he should not be in the C.C.F. party. I say this to the hon. member for Humboldt, that when he asks people to join a party that believes in socialism, on the pretence that it is a reform party, he is getting them into his party on false pretences.


Joseph William Burton: That is not right. I object to the hon. member saying that I induce people by false pretences to belong to this party.


An hon. MEMBER:: Come over here.


Walter Adam Tucker: Let the hon. member tell us whether he is a socialist.


An hon. MEMBER:: And let him say why he has joined the socialist party.


Joseph William Burton: I am a socialist according to my conscience, and maybe that is more than the hon. gentleman can say


Walter Adam Tucker: The hon. member sidestepped the question whether he is a socialist or not. The basic principle of the C.C.F. party is that they will not rest until they have eradicated capitalism and established a full programme of socialism.


Stanley Howard Knowles: Hear, hear!


Walter Adam Tucker: I notice that the hon. member for Humboldt did not applaud that. Once the people of Saskatchewan know the sort of basis upon which they are being asked to join the socialist party-


Mr. MacINNIS:: They know it now.


Mr. REID:: But they won't tell the farmer.


Walter Adam Tucker: -and when they realize where it is leading, they will reject that party. Let me tell the hon. member for Humboldt that he cannot kid himself. If he thinks that the people of Saskatchewan believe what he believes in, let him tell them what he actually believes in, and it will finish the C.C.F. party in Saskatchewan.


Mr. PROBE:: You hope!


Thomas Reid: They are soft-pedalling socialism to the farmers.


Walter Adam Tucker: Let him (Mr. Maclnnis) go out to Saskatchewan and make some of the
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speeches he makes in this house, if he believes in socialism. I give the hon. member for Vancouver East (Mr. Maclnnis) credit for believing in the principles of the party he supports. He believes in socialism, and when he asks people to join the socialist party-


Angus MacInnis: I would not.


Walter Adam Tucker: He is working for things he believes in. But let him go to Saskatchewan and preach the. same doctrine and see what happens to his party.


Stanley Howard Knowles: May I ask a question?


Some hon. MEMBERS:: Sit down.


Stanley Howard Knowles: May I ask the hon. member a question?


James Horace King: Order.


Walter Adam Tucker: Yes.


Stanley Howard Knowles: Does the hon. member believe in the legislation which is now before this house with respect to the taxation of cooperatives?


Walter Adam Tucker: I will answer that very shortly. It brings me back to the little meeting which I started to talk about. I said to the hon. member leading the C.C.F. party to-day that there were just about enough Liberals in this country to fight the forces of reaction.


Stanley Howard Knowles: Where are they?


Walter Adam Tucker: A good many of them are here; I will tell you that; and they are not vitiating their desire for reform by pretending not to be socialists and at the same time actually being socialists in fact. You cannot be a socialist and a true reformer of our system at the same time. Once you go far enough along the lines of socialism, along the line of bringing in state control of the means of wealth production and of the ownership of the natural resources of the country, you have got to the point where the government is so all-powerful that there is no possible distinction between it and a communist dictatorship.


Stanley Howard Knowles: Come on, answer the question.


Walter Adam Tucker: Once your government owns the means of wealth production, once it owns the assets of the country, I defy any C.C.F.'er to tell me the difference between that and communism.


Thomas Reid: Get up and tell us.


Walter Adam Tucker: That is why I say that the C.C.F. is the way-maker for communism.


Stanley Howard Knowles: Then why not encourage cooperatives?


Walter Adam Tucker: The C.C.F. is not a party of real reform; it is a party which is moving back towards dictatorship by way of loss of personal liberty, and all the rest of the processes which are associated with dictatorship.


Thomas John Bentley: What has this to do with
the tax on cooperatives?


Walter Adam Tucker: I am coming back to that question. One of the amazing features of the situation is this, and it is coming to a head in Saskatchewan-


Stanley Howard Knowles: Don't forget the question.


Walter Adam Tucker: The Wawanesa is one of the oldest mutual life companies in the west,


Major James William Coldwell: Fire insurance.


Walter Adam Tucker: Fire insurance-right. It had many policies on school buildings throughout. Saskatchewan. What did the present socialist government of Saskatchewan do? Because it gave a grant to the schools of Saskatchewan, it insisted on these schools taking that business away from this cooperative company and giving it to a government-owned company.


An hon. MEMBER:: Bribery.


Walter Adam Tucker: Is not that dictatorship?


Thomas John Bentley: No; he said it was bribery.


Walter Adam Tucker: I know that when I mention that it is seemingly funny. But is it not striking at true cooperation? That action of the Saskatchewan government is not true cooperation. These individuals banded themselves together and worked together to help cooperation along.


An hon. MEMBER:: That is what Saskatchewan is doing.


Walter Adam Tucker: When the state steps in and forces the schools to take business away from a cooperative company and give it to the government, is that true cooperation? And that is just the beginning. I repeat, that is just the beginning. They have not started yet. If Saskatchewan to-day is one of the greatest cooperative provinces it is largely due to what a Liberal government has done in the past.


An hon. MEMBER:: In spite of it.


Walter Adam Tucker: Hon. members may laugh at that, but they know in their hearts that it is true. The present government is beginning to take over control of other businesses as it has done of insurance.


Ian Alistair Mackenzie: Horses.

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Walter Adam Tucker: Then what is going to happen to the cooperatives of Saskatchewan?


Stanley Howard Knowles: What is going to happen under this legislation? Do you believe in it?


Walter Adam Tucker: My hon. friend is very anxious to hear about that.


Stanley Howard Knowles: Do you believe in it?


Walter Adam Tucker: My hon. friend's anxiety to hear about it brings me back to this meeting.
I said to the leader of. the C.C.F. that there are just enough Liberals in this country-


Stanley Howard Knowles: That is all.


Walter Adam Tucker: -to hold their own.


Ian Alistair Mackenzie: To form a government.


Walter Adam Tucker: And over there we see some people who may pretend to be Liberals but are really masquerading and are actually socialists, or vice versa; nobody knows what they are. They have got to be one thing in one place and another thing in another in order to catch votes. But what are they in their hearts? Where do they stand? Where does the hon. member for Humboldt stand in connection with the interference with the Wawanesa company, when the government takes insurance away which the people wanted to go to a cooperative and insists that it be given to the government?


Joseph William Burton: What about all the other businesses?


Walter Adam Tucker: The hon. member is wrestling with his conscience, unless he has almost managed to kill it and thus perhaps give himself some sort of ease of mind. However I do not think he has killed his conscience. He is one of those whom I am hoping to see rejoin the Liberal party, which his hon. leader himself seems to be thinking about so much.


Major James William Coldwell: Quite the opposite.


Walter Adam Tucker: When I think of the remarks I have heard as to joining our party-


Stanley Howard Knowles: Don't forget my question.


Walter Adam Tucker: The leader of the C.C.F. party must be a true Liberal at heart, and if so I can understand his preoccupation about rejoining the Liberal party, and in that attitude he is right. I would say to the hon. member for Humboldt: Listen to the teachings of your conscience.


Ian Alistair Mackenzie: Be a little more definite than that.


Walter Adam Tucker: Well, let him listen to his conscience. If the hon. member for Rosetown-Biggar and the hon. member for Humboldt
are not true socialists, if they do not believe in paving the way for this country to be a communist country, if they do not believe in that, then what have they done?


Stanley Howard Knowles: Don't forget to answer the question. Your time is running out.


Walter Adam Tucker: My hon. friends have persuaded many true Liberals to turn down good things, they have persuaded sincere reform Liberals from Saskatchewan to turn down those things, and you have the result over there-people who do not know whether they are Liberals or Socialists, people who, when it comes to a question of true Liberalism, still have to try to meet other people like the member for Vancouver East half way, because they cannot let him down. And then he of course has to be careful about what he says in Saskatchewan, for fear of letting them down. There is no doubt about it. And what is the result? I want to say this, Mr. Speaker: If it had not been that we had eighteen C.C.F.'ers in this house from Saskatchewan, which pleases the hon. members; if we had eighteen Liberals here instead, I want to tell hon. members that in the councils of our party this thing would have been fought out and I think this particular clause in regard to the tax on a minimum income of three per cent would not be here. It bears out what I have said many times, that by splitting the force of Liberalism, by getting people to join other parties, they have weakened the forces of Liberalism in the' country, and particularly is it so in regard to western Liberalism. Western Liberalism has been in the past and will be in the future one of the real forces for progress and true Liberalism in Canada. The place of Liberalism is not in a truncated opposition that sits there year after year, session after session, pretending to be the friend of reform, but actually being led by people who believe in socialism, people who are not making a real contribution to the formation of the policies of the country. I admit that some of them, have the ability to make good speeches. I admit they can appear in the eyes of the country as putting up a real fight. But if they believe in reform and Liberalism they should be in the party that can do something.


Mr. IRVINE:: And vote for this bill.


Walter Adam Tucker: I did not interrupt the hon. member when he was speaking. I know this argument may bother him. He hates to hear it, but he and his ilk will hear it and they will hate it worse and worse in the days that lie ahead in Saskatchewan. Nevertheless
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the truth will be spoken; it will not be silenced by derision and sneers and laughter. The truth will be heard in Saskatchewan.
And now I wish to say a wordi to the hon. member for Swift Current. If the true Liberals who should have been in this house as representatives of Saskatchewan had been on this side it could have modified this legislation. There is great anxiety as to how I am going to vote. Well, I feel so strongly against this particular provision that I do not really know what I should do.


Some hon. MEMBERS:: Oh, oh.


Stanley Howard Knowles: Now who is battling with his conscience?


Walter Adam Tucker: I know that statement of honesty amuses hon. members; it amazes them.


Stanley Howard Knowles: Amazes is right.


Walter Adam Tucker: Because, of course, they are so ready to take their conscience out of the corner and kill it, voting for everything they are told to vote for, that any simple statement of fact surprises them. I want to say that on this particular principle I would gladly vote to take out this three per cent principle because I never believed in it and do not believe in it now. But there is more than that involved-other useful sections of this act; and also my hon. friends know very well that this is parliamentary government, and I would rather have-


Stanley Howard Knowles: Who is battling with his conscience now?


Walter Adam Tucker: -the Liberal party, with its great past and its record in the provision of social security in this country, unemployment insurance, old age pensions-


Mr. GRANT:: And family allowances.


Walter Adam Tucker: Yes, family allowances, prairie farm assistance and all those great measures, not forgetting its programme, which it laid before the dominion-provincial conference, with all that it offers in the way of security to the people, health insurance, and so on-


Stanley Howard Knowles: When?


Walter Adam Tucker: I would rather have the Liberal party, which has not hesitated to lay that programme before the people, and which is ready to stand and fight for it, as no other party is doing to-day-I would rather have that party in power than any other. I hear it said by some people: "Why don't you call another conference?" Well, why do not those people who are talking say what they would like to do at such a conference?


Stanley Howard Knowles: Why doesn't the government go ahead and act?


Walter Adam Tucker: There speaks the dictator, Mr. Speaker. There is the dictator speaking. Why doesn't the government go ahead and act, with the provinces unwilling to agree? Yes. The hon. member would act all right; I have no doubt about that. He would tell them what to do.


Stanley Howard Knowles: The people of Canada
want better old age pensions, and my hon. friend knows that.


Walter Adam Tucker: My hon. friend believes
in dictatorship, but the government believes in trying to get people to agree. The government believes in the constitution of the country, and not overriding it.


Stanley Howard Knowles: Do the thing the people of Canada want.


Walter Adam Tucker: As I said, I want it distinctly understood that when I vote against this resolution I am voting for the general policy of the government. I want to see this government stay in office because I believe in what it has done and what it promises to do, and it is the only party that has a real chance of carrying out these great programmes for the' benefit of the people in the future. Let me say to my hon. friends over here who do so much talking that if this government were defeated and a general election held, they know in their secret hearts that they have no chance of forming a government in the country.


Ian Alistair Mackenzie: None.


Mr. COLD  WELL@: Sure.


Walter Adam Tucker: My hon. friend over there is too honest to say "sure" with the vehemence of some of his followers. Now, what is the alternative to this government if it is defeated on a measure like this?


John Ritchie MacNicol: The Progressive Conservative party.


Mr. MARTIN:: There is no Conservative
party.


Walter Adam Tucker: Did somebody say the
Conservative party?


John Ritchie MacNicol: I said the Progressive
Conservative party.


Walter Adam Tucker: Where is it in Quebec,
in Saskatchewan, in Alberta?


John Ritchie MacNicol: It is strong enough in
Ontario.

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Walter Adam Tucker: Where is it anywhere but in Ontario? Where is it in Nova Scotia, in Manitoba? Is there any hope of their forming a government without some dickering with somebody else, without some deal with somebody else, which might bring this country we know not where? Just let anyone answer me this question: What is the alternative to this Liberal party of o-urs?


John Ritchie MacNicol: I repeat, the Progressive
Conservative party.


Walter Adam Tucker: Where is there any hope
for the future there?


James Horace King: Order, I would suggest
that the hon. member address himself to the . chair.


Walter Adam Tucker: I am sorry, Mr. Speaker. When I see such anxious faces across from me, anxious to hear what I am going to say,
I am prone to forget myself and speak directly to them; but I hope it may be taken that when I look at my hon. friends across the way, in spirit I am looking at the Speaker.


Ian Alistair Mackenzie: That is not fair to the Speaker.


Walter Adam Tucker: I have hopes that the dominion-provincial conference will be reconvened and will bring forth the fruits which it should have brought forth in the first place had it not been for the opposition of certain people. I believe the only party that has any hope of putting the dominion government behind these proposals is the government of the Liberal party. I do not think there is any question about that.


An hon. MEMBER:: How far behind?


Walter Adam Tucker: That being so, no matter whether I like this particular little provision or not-little as compared with the bill as a whole-and I admit I do not like it; I admit I was against it; I admit that if I had ten or fifteen Liberals to support me in fighting against it, it would not be here. Where were they? They are across the floor-


Stanley Howard Knowles: What an admission that is!


Mr. COLD  WELL@: Have you not fifteen Liberals in that party?


Walter Adam Tucker: Not from Saskatchewan. I started out by saying that Saskatchewan has been a great cooperative province under the leadership of the premiers andi leaders of the Liberal party of Saskatchewan since it became a province. Everybody knows where the Liberal party of Saskatchewan stands.


Some hon. MEMBERS:: Oh, oh.


Walter Adam Tucker: My hon. friends may make hollow laughs, but they know in their hearts that it is true. But here is the very situation that I pointed out to the leader of the C.C.F. in days gone by: that they had no hope of forming a government of Canada with a socialist party; that if he were a true Liberal or a true reformer he should join with others of like mind who are working to mould and reform the government of this country; but he saw fit to go off in another party. Now year after year and election after election the^ are making predictions that they are going to increase their membership. The only reason that they increased-


Joseph William Burton: It is gaining all the time.


Walter Adam Tucker: Let us admit that was so in Saskatchewan. But when they went to the people did they not have a member from Ontario? They lost the only member they had. They had a member from Nova Scotia; they have him yet. They had some members from British Columbia whom I know well; they are not here. The only place in which they really gained was in Saskatchewan; it was a temporary gain, a gain based upon the troubles that we went through.


Mr. COLD  WELL@: What about Manitoba and British Columbia?


Walter Adam Tucker: I would say to the leader of the C.C.F. party that he knows in his heart that his increase in membership from Saskatchewan is not based upon an actual acceptance of the doctrines of his party by the people of that province.


Mr. COLD  WELL@: Who said so?


Walter Adam Tucker: He knows in his heart it is true that Saskatchewan is not socialist; that the farmers of Saskatchewan are not socialists. He knows that his party there is a very ephemeral thing.


Mr. COLD  WELL@: No.


Walter Adam Tucker: Yes, he knows that; that is why he is talking all the time of going back to the Liberal party himself.


Major James William Coldwell: He is not going back to the Liberal party; you wish he were.


Walter Adam Tucker: There is the situation. And when I am asked whether I would rather take the great programme of our party in the past and its great programme looking to human betterment, human security, human welfare in the future, or by my vote attempt to turn the government out of office in these crucial times in our nation's histoiy, I say that I will vote with the government in this, although I do not agree with it on this one
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point, rather than turn this government out of office.


Stanley Howard Knowles: What did you say about conscience?


Walter Adam Tucker: But I will say that I shall reserve the right in the days ahead to ask for a change in this section, and I hope-


Stanley Howard Knowles: Now is the time to vote against it.


Walter Adam Tucker: I hope that as a result of my work in Saskatchewan I shall send back or help to send back to this parliament fifteen or twenty Liberals.


Stanley Howard Knowles: What a hope!


Walter Adam Tucker: Who will sit within the Liberal party of this country to help to make it an advanced reform party and government which will set the pace for Liberalism throughout the whole world in fighting for the common man.


Stanley Howard Knowles: Who is whistling in the graveyard now?


Walter Adam Tucker: We in Canada are going to draw the line between the people who say that the hope of the future is in state control, state domination, and those who say that it is not. We are going to turn our faces definitely against that teaching, as they are doing in western Europe.


John Oliver Probe: Try it in an election.


Walter Adam Tucker: Yes, I shall try it in an election, and with great success, I hope, because it is truth.


Stanley Howard Knowles: When are you going to take the chance?


Walter Adam Tucker: Already the truth is being realized in western Europe and in Great Britain. For example, the young people in the universities of Great Britain are realizing that socialism is the way back to dictatorship, the way back to absolutism, and that the hope of the future is in Liberalism, in reforming our present system. I say to you, Mr. Speaker, that the wave of the future is with us, the hope of the future of mankind is Liberalism, not in the hateful system of state dictatorship and state control. I will not support that sort of thing. I pin my faith to Liberalism, the hope of the future.


Mr. CLARENCE GILLIS (Cape Breton South):: I am sorry that the time of the house has been wasted for the last forty minutes-


Mr. McCANN:: Take another guess.


Mr. CHEVRIER:: You think so.


Mr. BRADETTE:: It is going to be properly used now.


An hon. MEMBER:: Wasted for the C.C.F.


Clarence Gillis: -and I trust that I do not hear any more from the other side of the house until the close of the session about sitting until twelve o'clock midnight in order to conclude our business.
The speech just made by the aspiring premier of Saskatchewan-


Ian Alistair Mackenzie: You mean "inspiring".


Clarence Gillis: -was completely out of order. It had nothing to do with the motion before the house. I think that ninety-nine and a half per cent of what he had to say-


James Joseph McCann: Is true.


Clarence Gillis: -would have done him a lot more good in his ambitions to beat the C.C.F. in Saskatchewan than it will on the record, having in mind the discussion of this morning. There is one thing which encourages me greatly in his prediction. I saw him stand in his place in the house and shake his fist at us and say that Tommy Douglas would never become premier of Saskatchewan.


Walter Adam Tucker: I rise to a point of order. I never said such a thing, and I defy the hon. member to show that I did. I think he should not resort to that sort of thing to score a point.


Clarence Gillis: I imagine-


Mr. SINCLAIR (Vancouver North):: You are imagining, all right.


Clarence Gillis: that under the leadership of the hon. gentleman who just gave us a demonstration of hysteria-


James Joseph McCann: No.


Clarence Gillis: -the province of Saskatchewan or any section of the country would be in danger, in my opinion. Those who lead people must at least have stability themselves, and we certainly did not get a demonstration of stability by the injection of the kind of discussion which was carried on on this particular question.
I am a member of the C.C.F. party. I think I have as much intelligence as the hon. member who has just spoken.


Some hon. MEMBERS:: You think so; does anybody else think so?


Clarence Gillis: I carefully examined its platform and I have no illusions as to

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*where it is going. I want to tell the hon. member that during the past two years many overtures were made to the C.C.F. party by the communist party.


Walter Adam Tucker: They will get you yet.


Clarence Gillis: And on the eve of the election-


Angus MacInnis: Whom did they support in the last election?


Clarence Gillis: On the eve of the election we threw their proposals in their faces, because we have no illusions as to what their programme is.


Walter Adam Tucker: The government in Saskatchewan is employing communists to teach the people of that province.


Clarence Gillis: Let me remind my hon. friend that the communist party were largely responsible for sending back to this house many hon. members who sit over there. You had an official alliance with them. There are very strong rumours that you paid most of their election expenses.


An hon. MEMBER:: Who paid yours?


Clarence Gillis: I paid them myself.
Some hon. MEMBERS'. Oh, oh!


Clarence Gillis: That rather surprises you fellows, because most of you got your election expenses either from St. James street in Montreal or Bay street in Toronto.


Joseph-Arthur Bradette: You know nothing
about it.


Clarence Gillis: I know this, and I can speak with authority on it. I had one of these commie boys running against me. I know he would take the air and tell the electors, "If you don't vote for me, vote for the Liberal candidate." The Liberal candidate would take the air and make the same statement: "If you don't vote for me, vote for this other fellow." I know your agents worked together at the polling booths.


Walter Adam Tucker: I venture to say that no Liberal candidate in Canada did that.


Clarence Gillis: I am telling you it was done
in my constituency.


Walter Adam Tucker: What was the name of the Liberal candidate who said that?


Clarence Gillis: He was the official candidate; you had him in this house at one time. I can show you the newspapers during the North Grey by-election; I can show you almost every known communist in Canada, members of their national executive, in newspaper advertisements paid for by the Liberal association of that riding advocating the election of the Liberal candidate. You see, when you make statements of that kind, as I said a moment ago, you do yourself a disservice.


Walter Adam Tucker: Will you explain the difference between your party w'hen it finally gets everything socialized, and the communist party?


Clarence Gillis: All the difference in the world.


Walter Adam Tucker: Just different people, that is all.


Clarence Gillis: No; the difference is this. We believe in parliamentary government. We are prepared to fight for it. We do not intend to throw any of its principles overboard on the eve of an election, or at any other time, as you have demonstrated you are prepared to do.


Walter Adam Tucker: When you get an allpowerful government what will be the difference?


Clarence Gillis: Mr. Speaker, I had no intention of getting into this sideline discussion. When the hon. member for Rosthern (Mr. Tucker) was waving his arms so energetically -he has undertaken a difficult task, as he well knows-he reminded1 me of Nero fiddling while Rome burned, because this country is in a sorry mess to-day. I am not concerned about party tags. I am concerned about some honesty in the application of government to the problems that confront us. I am going to say this, with regard to the question of taxing cooperatives. I am afraid that if any hon. members over there believe in a continuation of the cooperative movement in this country, they are taking the initial step to kill it. In this legislation you are definitely classifying the cooperatives as profit-making organizations and corporations. When the McDougall commission sat, they did not have a precedent like this before them. They examined the question as it really existed and brought in recommendations which in my opinion were fair and reasonable. The crux of the whole matter is this three per cent and the classifying of cooperatives as profit-making organizations. If another commission sits -and there will be another-this is the thin edge of the wedge driven in by those who want to destroy the movement; for when the next commission sits on this question it will be placed in the position, whether it likes it or not, of saying that the government of Canada by this legislation has already classified the cooperatives as profit-making organizations. Then it will go on and take the next steps to tax them as such, and will gradually force
5U90
Income War Tax

them out of the picture. I have no illusions as to how far this step goes. Neither do I doubt that many hon. members who may not have been actively associated with these organizations think this is only a gesture, and that it is going to stop there. It is not. As I see this legislation it is going to preclude the payment of patronage dividends by most of the organizations across Canada, if they are required to set aside that three per cent.


Walter Adam Tucker: No.


Clarence Gillis: That may not be the intention.


Paul Joseph James Martin: And it will not be the result.


Clarence Gillis: But based upon these recommendations there will be regulations, and unfortunately neither the hon. member for Rosthern nor the hon. member for Essex East (Mr. Martin) will be administering that legislation. You are merely developing another tangle that will have to be untangled by a commission later on. You are setting a precedent that is going to tie your hands. That is all.
The test of whether or not you believe in cooperatives is going to be very simple this morning. The hon. member for Rosthern cannot say that he thinks they should not be taxed. I judge that he is opposed to this particular legislation; but he admits that the party whip places every member over there in the position that he has to support the government.


Ian Alistair Mackenzie: The party whip has gone home.


Clarence Gillis: Nevertheless the principle is there.


Walter Adam Tucker: If I may ask the hon. member one question, does not this legislation exempt patronage dividends from taxation, and is it not a fact that if the legislation does not go through they will be subject to taxation?


Clarence Gillis: No, I do not interpret it in that way.


Walter Adam Tucker: Well, that is the case.
Mr. GILLIS.: And unfortunately those who are writing these regulations may not interpret it in that way either; they may see it the way I see it and apply it in that way.
I just want to make the point that I think the time has come in this parliament when members should be prepared to show their independence. I would not care what the members of this group thought about any question; if I thought it was wrong I would get up and say so and vote against it. I believe, as the hon. member for Rosetown-Biggar (Mr. Coldwell) said, the question we are now considering is a bigger issue than [Mr. Gillis.J
party labels. I believe we should exercise our own discretion freely on this matter, and if we do not think it is right we should not vote for it. Any hon. member who. votes for the motion is merely asking for reexamination of the question, for the postponement of a decision, for the matter to go back to be further considered and, following that further consideration, to be brought back to this house. Any revenue the government is going to get will not amount to anything, but in my opinion they are establishing a principle that is going to halt the cooperative movement in this country, while in the case of the consumer stores it is apt to bring about a price war. It is the principle of the thing that should be sent back for reexamination. You can get up and try to excuse yourself any way you like, but the test of the matter this morning is whether you vote for it or against it, because in my opinion if we pass this legislation here to-day we are driving in the initial wedge that is going to halt the expansion of this movement in the country.
Why am I so anxious that this should not be done? The hon. member speaks about communism. I am just as much opposed to communism as he is, and I know perhaps just as much about it.


Walter Adam Tucker: So was Kerensky against communism in Russia.


Clarence Gillis: Well, we have had the lesson of Kerensky, and we have learned something from it.


Walter Adam Tucker: We should have.


Clarence Gillis: We have.


Walter Adam Tucker: I think the people have.


Clarence Gillis: There is only one alternative in this country, in my opinion; that is, you have to start lifting up your people. Give them a start. Give them some ownership. Give them a chance to drive their roots into the soil. Give them a stake; and in the cooperative movement they have that opportunity. I have heard many people, not Canadians at all but from outside Canada, after looking over the cooperative movement in this country, with particular reference to that movement in Nova Scotia, say that it was building in this country the basis for a new order, and that to destroy it would be to destroy the only alternative to what Stalin has to offer. We have to consider that very carefully, because if this wedge is driven in and that movement is disrupted, that movement which offers a middle course, the alternative may be violent revolution and the overthrow of everything we know that is clean

Income War Tax
and decent. If we pass this legislation we are going to harm people who have sacrificed a great deal for the cooperative movement, because there is a storm of protest from every cooperative leader in this country as well as the rank and file of the movement, by letter, by telegram, by brief and in every other way. This is going to be looked upon as a hostile act on the part of the government in behalf of the larger monopolies in this country, to smash the only bulwark that exists to-day to guard the consumers against a small group at the top who have control of everything in the field of distribution. That is the principle, as I see it, in the two sections concerning which the amendment has been moved. I suggest to anyone who believes in it and who wishes to go forward in a democratic way in this country, that a reexamination of those two sections is necessary. Everyone should exercise his own judgment, and should vote without regard to party labels.


Mr. F. S. ZAPLITNY (Dauphin):: Mr. Speaker, I shall be brief. However, while the hon. member for Rosthern (Mr. Tucker) was speaking, I had occasion to consult the record to see how accurate he was in some of his statements. First of all I would refer to an editorial in the Winnipeg Free Press, a paper which is known not to be particularly hostile to the present government. In giving an account of the recent convention of Saskatchewan Liberals, at which the hon. member was chosen provincial leader, it has this to say about the new platform of the party. First of all it says:
For what happened? The Liberal party convention moved to the left.
And then it goes on to say:
Three-quarters of the resolutions adopted, by actual count, might just as well have been passed by a conclave of C.C.F.'ers.


Walter Adam Tucker: They stole our platform when they started. Then they added socialism to it, and that was what I found fault with.


Frederick Samuel Zaplitny: I am not going to argue about who is doing the hijacking in this case, but it appears evident that for some reason or another the Liberal party of Saskatchewan has changed its leadership, and changed its policy, too. In which direction did they go? They went to the left. Those are the words in the editorial of the Free Press, which I believe the hon. member will accept. If he denies that we will have to-


Walter Adam Tucker: The Liberal party has always been a reform party, or it would not be a Liberal party.


Angus MacInnis: It always had a lot to reform.


Frederick Samuel Zaplitny: The hon. member for Rosthem has been almost an hour setting up straw men and knocking them down, and in that time I believe he made many statements which he will have reason to feel sorry for. One of them was when he accused the Saskatchewan government of leading toward a dictatorship. I never heard anything more ridiculous or nonsensical in my life. Here is a government that has been in power a little over two years, and has already had three by-elections. It has given the people of Saskatchewan three opportunities either to endorse or condemn it. And, incidentally, it won all the three by-elections in which the Liberals participated-


Walter Adam Tucker: All former C.C.F. seats.


Frederick Samuel Zaplitny: It is not as though the government were not giving the people an opportunity to throw them out of power. Only recently the premier of Saskatchewan made an offer to the hon. member for Rosthem for which the hon. member does not seem a bit-grateful, or even gracious. The premier offered that .as soon as any of the Liberals in Saskatchewan saw fit to resign, thereby leaving a seat for the hon. member for Rosthem in a by-election, he would be glad to call a byelection immediately, in order to get the hon. member in there in a hurry, and be able to give it to him personally-which I hope he will.


Walter Adam Tucker: Give what to him?


Frederick Samuel Zaplitny: The hon. member did not express his gratitude for that. He did not reciprocate in a good spirit of sportsmanship.


Walter Adam Tucker: What is there to be grateful for? If there is a vacancy, the people should have a chance to be represented.


Frederick Samuel Zaplitny: I should have thought that the hon. member would be a good enough sport to show some appreciation to the premier of Saskatchewan for what was offered by him.


Walter Adam Tucker: I will get there in due course.


An hon. MEMBER:: That's what you
think.


Frederick Samuel Zaplitny: But it is going to be a zigzagging course, I can. see that.
The hon. member talked about Saskatchewan as though it was the only province in Canada interested in cooperation, and that the issue was being fought out only in
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Saskatchewan. May I inform him that the issue is nation-wide. It affects also the province of Manitoba, from which I come. Where does the Liberal party in Manitoba stand on this question? I have mot a full record respecting every member from that province, but I have a letter in my hand which was written to the hon. member who represents Brandon constituency. This is written by the acting secretary of one of the credit unions in Manitoba. I think I should .put it on record, because it shows where at least one of the Liberal members from that province stands. The letter is addressed to J. E. Matthews, M.P., Brandon constituency. It is dated at Virden, Manitoba, July 26, 1946, and sates:
At a meeting of cooperative representatives of the organizations named, the enclosed resolution was passed and forwarded to the M.F.A.C. for copies to he sent to all Manitoba members. We believe this to be a very vital matter and have certainly no intention of meekly accepting a brushoff, as your letter replying to the one submitted by myself from Hargrave Cons. Co-op. was considered. The meeting to-night wished you to know they were not satisfied with your answer and will request your attendance at a meeting this fall to account for what happens in this proposed legislation. This committee represents approximately one thousand voters in this area and desire an accounting.
That sets out where at least one of the Liberal members from Manitoba stands on this question. Apparently he gave the cooperatives the brush-off, to use their own expression. And that is what the hon. member for Rosthern tried to do to-day: He tried to give the whole house the brush-off. He got up to discuss the amendment moved by the leader of the opposition (Mr. Bracken), and after talking for more than forty minutes, trying to tell us what to do about it, he ended up by saying, "I do not know what I am going to do." I do not know what kind of leadership that is.


Walter Adam Tucker: I did not say that. I said I had difficulty in making up my mind.


Frederick Samuel Zaplitny: I took his words down when he said it. He said, "I do not know what I am going to do." Now, if he tells the people of Saskatchewan that he does not know what he is going to do, he is not going to get very far.


Paul Joseph James Martin: That is honest leadership.


Frederick Samuel Zaplitny: It may be honest leadership, but I am reminded of the Nimrod who said that if you aim at nothing you are sure to hit it.
Then there is one other thing I want to refer to, and that is that the cat is finally out of the bag-and it is not the same tom-cat
fMr. Zaplitny.]
referred to yesterday. Yes, the cat is out of the bag. The hon. member for Rosthern raved about Liberalism and tried to leave the impression that if it had not been for the Liberals on the other side of the house there would be chaos. Well, we have them both. But what I want to point out is this, that a little later on he admitted there were not even fifteen Liberals on that side of the house.


Walter Adam Tucker: From Saskatchewan.


Frederick Samuel Zaplitny: Because he said if he had fifteen supporting him-


Walter Adam Tucker: I said fifteen Liberals from Saskatchewan.


An hon. MEMBER:: No, you didn't.


Frederick Samuel Zaplitny: No; if I heard the hon. member rightly he tried to correct it by saying that he meant Liberals from Saskatchewan.


Walter Adam Tucker: I said "with me", and I meant from Saskatchewan.


Frederick Samuel Zaplitny: Oh, I did not know there were different brands of Liberals from the different provinces in Canada. I thought if they were Liberals, they were all Liberals.


Walter Adam Tucker: There are certainly different brands of C.C.F.'ers.


Frederick Samuel Zaplitny: He wants the Saskatchewan brand in here. I am afraid he is going to be disappointed.


Walter Adam Tucker: Do you all think alike
over there?


Frederick Samuel Zaplitny: That is a serious charge, and I wish to protest to him on behalf of the rank and file Liberals on the other side of the house. Such an insult should not be thrown at them. Just imagine being insulted by the aspiring-or perspiring-leader of the Saskatchewan Liberal party when he tells his colleagues that they are not Liberals any more! What are they, if they are not Liberals?


Walter Adam Tucker: I did not say that.


Frederick Samuel Zaplitny: You implied that. You said there were not even fifteen there.


Walter Adam Tucker: From Saskatchewan. You jump at a half truth like a cat at a mouse.


Frederick Samuel Zaplitny: I have no intention of playing cat and mouse with the hon. member.
One more thing in closing which I also consider was a mistake on the part of the hon. member. He seemed to take advantage of the occasion to take a few stabs at the leader of this group when he asked him why

Income War Tax
he did not come over and join with the Liberals, why he did not try to reform them from the inside.


Walter Adam Tucker: I was just gently pleading with him.


Frederick Samuel Zaplitny: Apparently we cannot both speak at the same time unless we say the same things. I do not know with whom he would join over there if there are no Liberals left. I should like to know how the hon. member can invite anyone to join the Liberals when he admits himself that there are no more than fifteen of them left on that side of the house.


Paul Joseph James Martin: He did not say that.


Frederick Samuel Zaplitny: Read Hansard to-morrow. The situation is clear after this long debate. The hon. member for Rosthern admits that any member on the other side who was a true Liberal, and there seems to be precious few of them left, would have been opposed to this legislation in the first place and then it would never have got on the order paper. The answer seems to be that the great majority of the members on the other side have deserted Liberalism, have gone reactionary and are trying to snuff out the cooperatives.


Solon Earl Low: Mr. Speaker, on a point of order, I have been under the impression that we were to discuss the third reading of bill No. 368, to amend the Income War Tax Act, and not take part in the battle of Saskatchewan. While the battle of Saskatchewan has been interesting up to this point, it is beginning to wear a bit. I suggest that you call hon. members to order and see that the business of this house goes forward as it should.


James Horace King: The house is considering the third reading of bill No. 368, to amend the Income War Tax Act, and I would ask hon. members to see that the discussion is relevant to the bill before the house.


Mr. GLEASON BELZILE (Rimouski) (Translation):: Mr. Speaker, we have a very fine spectacle in this house to-day. The Progressive Conservative party, which has always been the friend and the supporter of private enterprise, to-day takes up the cudgels on behalf of the cooperatives. The anomaly is not so great as it would appear at first sight, because if we consider some powerful organizations from the west, especially the wheat pools, we are less surprised. There is no doubt that such organizations are included in those bodies which can be called big business trusts.
I rise in defence of the Liberal party's policy in this respect. I do so with the conviction that bill No. 368 which is now before this house, can on the whole in no way harm the cooperative movement in Canada and particularly in the province of Quebec.
I am a supporter of the cooperatives. I was brought up in that movement and it is a source of deep satisfaction to me to recall that, as early as 1908, my father, Notary Belzile, of Rimouski, established the second credit union in the province of Quebec.
I shall not go so far as to say that the cooperative idea is a religion to me, but it is certainly part of my economic and political creed. I have studied the cooperative movement for a long time, and I have realized how beneficial it can be to our province and to the country at large. Therefore, when the resolution was first introduced in this house, I made it a point to study it most carefully.
The matter gives rise to much controversy. Some people are in favour of the taxation of cooperatives; others hold an opposite view. All bring up arguments according to their point of view, and they cannot but be conflicting. However, there is one point on which there seems to be general agreement, and it is that in certain cases cooperatives are business ventures and their income must come directly under the Income War Tax Act. They make profits, and this is generally admitted. All transactions between the cooperatives and non-members represent income derived from their investments.
Without any doubt, in the case of operations between members and non-members, there is direct competition with ordinary business concerns, and the reason why the campaign for their taxation was launched lies in the fact that for several years some cooperatives have repeatedly resorted to that method of doing business.
Numerous representations have been made to the government which has duly considered them and taken action. They have appointed the McDougall commission and conferred on it well-defined powers. The members of that body have been chosen from all walks of life. They are Mr. Justice Errol M. W. McDougall, Mr. B. N. Arnason, of Regina, at present deputy minister of the cooperation department in the Saskatchewan government; Mr. G. A. Elliott, of Edmonton; Mr. J. M. Nadeau, a well-known economist from the city of Montreal, and Mr. J. J. Vaughan, of Toronto.
At one o'clock the house took recess.
Income War Tax

The house resumed at three o'clock.


Gleason Belzile: Mr. Speaker, before the one o'clock recess, I explained that the government, in reply to the representations that had been made to them in connection with the taxation of cooperatives, had appointed a commission. I gave the names of the members of that body. However, I wish to emphasize the personality of Mr. Amason. He is an expert on the cooperative movement, and is well qualified to propound its ideas and aspirations. He is at this time deputy minister of the cooperation department in the C.C.F. government of Saskatchewan. The commission has conducted an inquiry throughout the country. It has had a great number of public sittings. Many briefs-more than 175, I believe-were submitted for its consideration. After sitting in many places from Vancouver to Halifax, three of its .members have even made a trip to England in order to make a survey of the cooperative movement in that country. They have -met British experts in London, Liverpool and Manchester. The object of that trip to England was to ascertain the effect of taxation on the cooperative movement there. As everyone knows cooperatives are taxed in. England. In September, 1945, the commission submitted its report. It was unanimous, which is rather surprising, if we consider the opinion of the various members, and the fact that their occupations were quite dissimilar. Its recommendation was to the effect that cooperatives should be taxed. It stated as follows:
We are of the opinion there is no general class or group of cooperative associations in Canada to-day whose income should be declared not to be liable to taxation .'. .
That was the unanimous opinion of the commission. The situation which the commission had to investigate was this. In 1930 the Income War Tax Act was amended by the insertion of section (4) (p), whereby cooperatives were exempted from the income tax. According to a quite authoritative legal construction that provision did not imply complete exemption. Under that interpretation of the clause, the cooperatives could be taxed. As a result, some important western organizations have been advised that they would have to pay income tax. The cooperatives who were so advised have disputed the construction placed on section 4 (p) and they have brought the matter before the courts, where it is still pending. In view of that imbroglio, the commission deemed it necessary that section 4 (p) be repealed and it made in its report a recommendation along that line that was also unanimous. It stated:
As a result of the ambiguities of language and the difficulty of administering the section, we are of the opinion that the section, in its present form, cannot survive the attacks made upon it. In suggesting its repeal, we do so in the consciousness that enterprises which are truly cooperative in organization and operation, have no need of the exceptive provisions thereof. If they make no profit they are not taxable. Those associations which do not so qualify, should not be accorded a blanket exemption to which they are not otherwise entitled.
That was the unanimous report of the Commission and even Mr. Arnason endorsed that principle. Consequently, the Government has proposed the repeal of section 4(p). Before that recommendation, the position was this: under that interpretation of the act, the cooperatives were liable to the income tax- they have been so taxable since 1931. No prescription can be invoked against the government. A claim for taxes does not lapse in favour of the rate-payer. That is a well known law .principle. Therefore, in. opposition to the representations made by the cooperatives, the government deemed it necessary to make the latter liable to taxation, and I think they were right. The principle underlying taxation .is that equal treatment should be meted out to all taxpayers. Under no circumstances can there be any discrimination' as between the various taxpayers. If it is admitted, as the commission did admit, that some of the operations conducted by cooperatives are of a purely commercial nature, and that they compete directly with private concerns, it is obvious that .the exemption of cooperatives from taxation would mean a discrimination, and under certain circumstances, an injustice which could not but give rise to discontent. Under the provisions of the provincial laws that apply to cooperatives, the latter are corporations and their members or shareholders are responsible only for the unpaid amount of their subscriptions or shares. The corporation is a person as distinct from the individuals who belong to it. Under the law, the establishment of a cooperative creates a legal entity that is new and distinct from its promoters; it has rights and obligations different from those of its members. It is "a person" as defined in the Income War Tax Act. Its members only have a limited responsibility, which places them on a par with the shareholders of a company. In its operations, the cooperative resorts to the usual business methods; if its operations bring no surplus the cooperative has no income and therefore is not taxable.. But if its operations show a surplus, it is an income within the meaning of the law, and that .income is therefore

Income War Tax
taxable. We have to consider where the income ultimately goes; it is a matter of distribution or non-distribution. If the income is distributed, it becomes an income for the shareholder who receives it, and as such it is liable to taxation in the hands of that shareholder. If the income is not distributed; if on the contrary, it is put, by some method or other, into the capital of the cooperative, such action on the part of the board of directors does not change the nature of the income. Consequently, it remains taxable, but in this instance, in the hands of the cooperative. If, out of the income of a taxpayer an amount is put into some kind of fund and that amount is said not to be taxable, this constitutes an inequality as regards the rate-payer and, of course, in the case of all the taxpayers in this country. Such is, in essence, the principle underlying the taxation of cooperatives, and I think it is fair.
To sum up my argument, I may say that the cooperatives are organizations whose immediate object is the elimination of middlemen's profits.
No one will gainsay this statement of principle. Therefore, they operate in order to realize these profits for themselves; and the commission is very clear on that point. Then the cooperatives must pay the tax on the same grounds as the middleman with whom they compete,-if they have profits, of course. To exempt them would be a discrimination in their favour, as far as the law is concerned. Such an exemption would be of no particular advantage to the public at large and its burden would fall proportionately on the rest of the taxpayers, which would give rise to dissatisfaction; as I said a while back, it would be unfair.
In order to implement the McDougall commission recommendations, the government has submitted, with the budget, a certain number of resolutions. These resolutions, as is now generally known, relate to three different subjects. They exempt credit unions, but bring mutual fire, life and accident insurance companies under taxation, except church mutual associations. As for ordinary cooperatives, the commission declared that those that were making profits had to pay the tax, while those that did not were exempt.
These resolutions have given rise to numerous representations from the cooperatives of the province of Quebec.
A large number of representations were submitted to me from supporters of taxation, on the one hand, who pointed out that the government was most generous towards the cooperative movement, in fact, too magnanimous in their opinion. Other representations were put forward by cooperatives complaining of the treatment meted out to them. The problem thus put on a dual aspect, and the two opponents assailed the recommendations of the commission which were incorporated in the budget resolutions.
As I said a while ago, I am in favour of cooperatives. Indeed, a group of members from rural districts submitted representations to the government. We explained that equal distribution of patronage dividends to members and non-members alike might foil the development of the cooperative movement. In fact, since one need no longer be a member of these organizations, that is, need run no risks and assume no responsibilities to draw patronage dividends, non-members would no longer hav* any incentive to join such an enterprise. These representations, put forward by the cooperatives of my province, were justified. We submitted them to the Minister of Finance (Mr. Usley) and to the officers of his department, and they understood our grievances. We also pointed out to the government that the six months delay set for the payment of patronage dividends was too short. In fact, some of our cooperatives, and more especially the creameries and others whose activities are of a rather seasonal character, need most of their funds in the spring. We pointed out, therefore, that under the circumstances, a twelve months period was essential. Here again the government agreed to our representations.
As to cash payments, no more than a method of administration is involved. The cooperative need only, in some way or other, credit the shareholder with the patronage dividend to benefit from an exemption for said amount on which, as I said a while ago, the shareholder will be taxed. The statement of the Acting Minister of Finance (Mr. Abbott) was based on these representations.
Therefore, since.the government has agreed to our proposals. I deem it my duty to support this bill. By means of this bill, and as a result of the amendments allowed, our claims are satisfied in full. It fully meets the requirements of cooperatives. Not only will it cause them no harm, but I would go so far as to say that it will help them, and foster their further development.
The present debate is probably-and even unquestionably-the greatest propaganda ever put forward in Canada in favour of the cooperative movement. It is my hope, there-
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fore, that our cooperatives will appreciate the value of their movement and the advantages of communal endeavour.
But what remains of those resolutions? There remains the very object of the two amendments now under consideration: the three-year exemption clause and the one commonly described as the 3 per cent clause.
As regards the three-year clause, whose removal is sought in order to make the exemption retroactive over three years, its suppression would be unfair. There is no provision for the retroactive application of a legal measure. Legally the proposition is quite unsound. You cannot go back and exempt an organization that might have been liable to taxation.
As for the 3 per cent clause, it has been woefully misconstrued. In a generally well-informed newspaper, I have read, under the by-line of an alert financial editor, an interpretation that was quite wrong. This is what it said:
The government wants to put a three per cent tax on cooperatives' employed capital. The application of such a measure would be comparable to taxing a farmer on the value of his chattels.
This interpretation is quite erroneous. This is not a tax on capital; it is a tax on income. It is the Income War Tax Act we are dealing with here. The 3 per cent clause is merely a basis, a schedule of taxation. We say to the cooperatives:	"You are using a certain
amount of capital for the purposes of your business. If you make a profit-there is no commercial profit without capital-and if this profit is greater than 3 per cent of the capital employed, you must pay income tax on your real profit. If your profit is less than 3 per cent, you are left with some income at least, with a real profit subject to taxation. Here is how the rule applies:	you may not
reduce an income of 10 per cent to less than 3 per cent by subtracting depreciation allowances, by distributing patronage dividends or by paying interest rates. If you bring it down to less than 3 per cent, you will be taxed on the basis of 3 per cent. In other words, if a cooperative tries to reduce an income of $1,000 to less than $300 by means of deductions, patronage dividends, interest payments and depreciation allowances, it will be taxed on the sum of $300 at the current rate. It will pay 30 per cent of $300; or $90, which is far from 3 per cent of the capital.
All in all, I believe that the cooperatives will benefit by the enactment of the present legislation. It will force them to make statutory reserves under provincial laws, to put aside certain taxable funds derived from their
fMr. Belzile.]
business profits.
I am convinced that the implementation of the act will not prove detrimental to cooperatives but will compel them to set aside reserves, thus permitting them to redeem their total debt within a period of ten or fifteen years.
The passing of this measure will lead to the establishment of a standard system of operations in all cooperatives. In such a vast country as ours, laws vary from one province to another and their terms are not uniform. As a result, operations are conducted on a different basis in various cooperatives. They will immediately profit by the adoption of a standard system. I humbly submit that, in view of the situation, the amendment introduced by the leader of the opposition (Mr. Bracken) should be rejected.


Mr. ABBOTT:: I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted I would have voted against the amendment.


Mr. LESAGE:: I was paired with the hon. member for Kamloops (Mr. Fulton). Had I voted I would have voted against the amendment.


Mr. POULIOT:: I was paired with the hon. member for Edmonton East (Mr. Ashby). Had I voted I would have voted against the amendment.


Andrew Wesley Stuart: I was paired with the hon. member for Lambton West (Mr. Murphy). Had I voted I would have voted against the amendment.


Mr. SENN:: I was paired with the hon. member for Gloucester (Mr. Richard). Had I voted I would have voted for the amendment.


Mr. McGREGOR:: I was paired with the hon. member for Algoma West (Mr. Nixon). Had I voted I would have voted for the amendment.


Mr. CARDIFF:: I was paired with the hon. member for Chateauguay-Huntingdon (Mr. Black). Had I voted I would have voted for the amendment.


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


Mr. CASE:: I was paired with the hon. member for St. Johns-Iberville-Napierville (Mr. Cote). Had I voted I would have voted for the amendment.


Mr. STOKES:: I was paired with the hon. member for Nipissing (Mr. Gauthier). Had I voted I would have voted for the amendment.


Mr. HARKNESS:: I was paired with the hon. member for Mount Royal (Mr. Whitman). Had I voted I would have voted for the amendment.


Mr. JACKMAN:: I was paired with the hon. member for Bellechasse (Mr. Picard). Had I voted I would have voted for the amendment.


Clarence Gillis: I was paired with the hon. member for Inverness-Riehmond (Mr. Mc-Garry). Had I voted I would have voted for the amendment.
Langlois
Lapointe
Laurendeau
Leger
McCann
McCubbin
Macdonald (Halifax) McDonald (Parry Sound)
Mcllraith
Mclvor
Mackenzie
MacKinnon
MacLean
Marier
Marquis
Martin
Matthews (Brandon)
Mayhew
Mitchell
Mutch	_
Raymond (Wright)
Reid
Richard (Ottawa East)
Rinfret
Robinson (Simcoe East)
Ross (Hamilton East)
St. Laurent Sinclair (Ontario) Sinclair (Vancouver North)
Sinnott Tucker W arren Winkler Winters-82.
Income War Tax


John George Diefenbaker: I was paired with the hon. member for Winnipeg South Centre (Mr. Maybank). Had I voted I would have voted for the amendment.


Mr. SHAW:: I was paired with the hon. member for Provencher (Mr. Jutras). Had I voted I would have supported the amendment.


Mr. HERRIDGE:: I was paired with the hon. member for Bonaventure (Mr. Arsenault). Had I voted I would have voted for the amendment.


Mr. CLARK:: I was paired with the hon. member for Kent, Ont. (Mr. Desmond). Had I votedi I would have voted against the amendment.


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


John Bracken: I was paired with the Right Hon. Prime Minister (Mr. Mackenzie King). Had I voted I would have voted for the amendment.


Gordon Graydon: I was paired with the Right Hon. Minister of Finance (Mr. Ilsley). Had I voted I would have voted for the amendment.
Main motion (Mr. McCann) agreed to, and bill read the third time and passed, on division.
The house having reverted to the order for motions:



INDUSTRIAL RELATIONS


[Stage Direction]
Mr. MAURICE LALONDE' (Labelle) moved:
_ That the second report of the committee on industrial relations, presented to the house on Saturday, August 17, 1946, be now concurred in.
Mr. A. L. SMITH (Calgary West):: Mr. Speaker, in order to restore the house to its usual state of complacency may I say that I rise to support the motion of the hon. member for Labelle (Mr. Lalonde). Inasmuch as I had something to do with the beginning of this committee, or at least having it set up, I assure the house, as I did then, that I intend to consider the matter objectively and without heat.
I hope that you, sir, and the house, will see the distinction between my method of approach and that which we saw this morning. What happened this morning reminded me of
fMr. Gillis.l
the churches we used to have in western Canada, where a boy would pump wind into the pipe organ to make it go. I was one of those boys; we worked in relays. This morning I heard an organ playing with all the stops pulled out and there were at least two boys applying the wind. I trust that I shall not fall into that position this afternoon.
I cannot begin without complimenting and commending our chairman. I realize that it is not a compliment to a chairman of a committee to congratulate him upon his impartiality-the chairmen of all committees in this house surely must be impartial-but I do want to compliment him upon the way in which he administered' that impartiality, creating a basis of action which reached a new high both in dignity and' generally in the conduct of the proceedings of a committee.
I should like to say something about my fellow members on that committee. My experience in the House of Commons is limited to two sessions, the one which has gone and this one which, let us hope, is passing. Having sat on a number of committees, this was a new experience to me. I think all the thirty-five of us who were there were deeply impressed by the seriousness of the situation-except for the odd momentary outburst which was confined to the first two days in our forty-nine sessions, and we had that many. There was no sign of anyone seeking political advantage. They were a bunch of grand1 men trying to do something for their country.
In saying this I must also include the members of the press gallery who so fairly and fully reported this matter across Canada. But in saying that to them I stop short of the editorial chairs of the papers of this country. I say about those people, some of them only of course, that I do not envy them their position sitting on their air-cushioned seats in their ivory towers continuing this twofingered clacking on a typewriter which has lulled them into such a sense of somnolence that they cannot stand the accouchement of a new idea. It is very easy in that position to be always criticizing, but they have been unable to give birth to any new ideas. We have found that throughout the course of the sittings of this committee in some of the newspapers in this country.
I intend to deal briefly with this question of industrial unrest, and in doing so I go away back to the time perhaps when a member of the tribe from rocks and wood fashioned the first instrument of destruction. The creation of the first knife was by an individual for the chief. That was because of industrial unrest, a seeking to get along. We have that

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now, and I hope we always will have industrial unrest, because therein lies ambition and therein lies improvement. The maker of a mousetrap seeks to make a better mousetrap, and the -man who does the work seeks always a larger portion of that dollar which is brought forth by the mousetrap once it reaches the consuming public.
I am anxious to make a clear distinction between industrial unrest and industrial chaos, because that is the position this country is in at the present time. Perhaps here it might be advisable for me to tell the house of a message I have just received. It is supposed to be a Canadian Press message put out about fifteen minutes ago. It indicates that the gates at the steel plant at Hamilton have been opened and that traffic is moving freely back and forth into and out of that plant.


Clarence Gillis: Have they taken off the
picket line?


Arthur Leroy Smith: I shall read this. It reads:
After first paragraph saying picket line open on authority Stelco, Canadian Press then on own authority says (in paraphrase).
Autos filled with Stelco employees passed through gates escorted by city police.
At least ten ears filled with employees entered the plant.	.
"We want to stop them, but what can we do?" a picket captain was quoted. The constables told us they have a legal right to go in and out of the plant.
A meeting of union executives was called at the main gate to decide the next move.
A thirty-year employee of Stelco is quoted by Canadian Press as saying that 900 men have telephoned Stelco officials to ask that they be given work.
The growth of the labour movement in the civilized world has been an amazing growth. It has been a splendid growth and, broadly speaking, it has been a very proper growth. But as we know, in all growth sometimes we find a canker, and attached to labour-I do not want to be criticized until I finish this sentence-at the present moment is the canker of communism. I say that that is no part of the labour movement; it is a political movement boring into labour movement, seeking by the instillation of fear, by the preaching of false doctrine, with the ultimate goal of a general strike, to grasp and hold completely political and executive authority in the Dominion of Canada. That is admittedly the end sought by the communist party in this country.
The mere fact that they have sought to go where there are masses of men is not a criticism of those men and the labour movement. It is something which they themselves-on
our committee I know there were two men holding union cards, and they were not in my party-are fighting, and have been fighting- there are three individuals because I am looking at another one-in a constant battle against that subversive political movement. It is unfortunate that they have made some progress, but I say that the heart of the labour movement is still sound. It beats with a rhythm both healthy and patriotic. It seeks for itself, and it justly seeks its proper place in our Canadian economy. The action of labour-there were a few blow-offs here and there-throughout the whole war was complete proof of what I have just said, and of the basic soundness of labour in this country. There were excesses, but I am quite sure that there always will be. We must remember when we speak of excesses in the actions of labour that they are no greater and no more than those that occur in other segments of our Canadian economy. I do not care whether you come from agriculture, from the dairy men, from the stock men, from the owners or from the manufacturers, it does not do for you just to speak of one segment of our economy and say: You are blameworthy because you have gone to excesses in the normal conduct of your business.
I must say that I was greatly impressed by one remark made by Mr. Pat Conroy when he was giving evidence during the sittings of the committee. I think I have him accurately, and he said this: "It is plain that aside from this continent all the rest of the world has gone or is going either socialistic or communistic." It seems to me that that is a thought which we in this House of Commons and in this dominion may well ponder. If you look over the map of Europe, if you look over the map of Asia, what Pat Conroy said, gentlemen, you will find is true. Therefore it behooves us here, if we are to continue our way of life-I do not like ordinary expressions, but there is no better one than that-if we are to continue our methods of doing business, to look- beyond our immediate business and the colour of the ink at the end of the year in our ledgers, and realize that we have three important interests in this country-the employer, the employed and the consumer, and unless we can find a place where they shall be satisfied, then indeed are we in danger of wrecking all that we so long have held so dear.
Now what of labour organizations? It began of course with the craft unions, and those unions generally speaking were gathered together under the American Federation of Labour. Then we had the Committee of Industrial Organization: you remember that it was set up by Mr. Lewis, and then Phil
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Murray took over from him, then they quarrelled, and now Mr. Lewis and his coal miners are back with the American Federation of Labour. But the thing was new. It was not an organization of labour by craft; it was an organization of labour by industry. In that it was comparatively new, and with that new method of organization new and sometimes reprehensible methods were adopted. We are fortunate indeed that until very recently we in Canada have been free from such methods. But it must be remembered that these unions are new unions. They are having or they will have their growing pains. That of course is obvious. It is also true that they are largely composed of and certainly led by younger men without much experience ini the labour movement. The hon. member for Cape Breton South (Mr. Gillis) explained that situation very well and very clearly to us in our com? mittee. So, growing so quickly, troubles have developed.
On the other side of the picture, what is the position of capital? I make this simple statement to you, that if capital had always been fair to labour there would be no need for the organization of labour. That is a very simple statement which I defy anyone to contradict. Even in recent years what has happened? The market falls off, and men are laid off by the thousands. It is all right to talk about high hourly pay, but if the work is not there so that at the end of the year.a man may add up those hours when he did work to provide a decent- living for his wife and his family, the talk of high hourly pay is complete nonsense in the budget and in the kitchen of that man and his family. It is all right to say that employment is seasonal, but what has been going on? Take your motor car industry: it does not need to be nearly as seasonal as it is. What happens? The men are out of work and the municipalities are called upon to help them; municipalities in Canada-rarely, it is true-have been paying them when a little different organization in that industry would have had the industry doing the paying for the twelve months, as of course it should.
I opened this matter some weeks ago in a speech which I made to this house. I am going to make a political remark about that speech -and this remark is not picking on anybody, which is unusual in a political remark. But I am just a little bit annoyed at being told, particularly by newspapers that are supposed to be on my own side, that this fellow Smith took a wildcat off the knees of the Prime Minister, or words to that effect. The point I have in my mind is that I am sorry that anyone should think I was quite so dumb. I assure you, Mr.. Speaker, and all hon. mem-

bers, that what I did on that occasion was done after discussion with my chief and after a caucus of this party-why? Because we felt- and it was a unanimous caucus-that the time had come when we dare not play politics, when we had to be Canadians and do what we could in the present desperate situation. If any of you think it is not desperate I commend to you the letter written by Mr. Donald Gordon to either the minister or the deputy minister of labour; if that does not give any man in this room pause, I do not know what will give him pause-whatever "pause" may be. But I mean that it will impress upon him the seriousness of the situation in which we find ourselves at the present time.
On that occasion, the house may remember, a controller had been appointed. And now, having mentioned the word "controller", I want to refer to an article in the Toronto Star of to-day. The heading is:
Kilbouni would examine every striker secretly.
After giving a recital of this sort of thing the statement continues-I am only reading a bit of it:
However, if it is put up to him, he said he believed his first step would be to find out the facts of the situation. He said he thought this could only be done by a thorough examination into the desires of the workers. He said he believed this could be done only by having all workers in the affected plants answer a set of questions.
The survey, he said, would be conducted as balloting in an election is conducted, in complete privacy. The worker would go into a booth and write his -answers and the sheet, which would bear no method of identifying the worker, would be deposited in a ballot box.
He said the survey, if it were held, should be made by entirely impartial people, with even the government eliminated. He suggested young lawyers or a firm of accountants whose impartiality would tbs beyond question should be employed.
If that is a correct statement of the methods to be adopted by this controller, he could not do that in less than nine months, with fourteen thousand men concerned. If that is the method to be adopted-and I have nothing more than the newspaper statement, the correspondent being Mr. Robert Taylor-if he has nothing more than that, it is time we had a new controller appointed in the steel industry. This of course, as everybody realizes, is just a lot of nonsense.
Now I pass on to this. First, I am anxious to compliment the Prime Minister (Mr. Mackenzie King) on the speed with which he acted; because you will remember it was in the afternoon that I made the suggestion for reference to a committee, and the committee was set up and met that evening. I do not

Industrial Relations
not need to read again to this house the terms of reference. They were to inquire into industrial unrest, and this committee of j'ours realized that we were not specially commissioned to settle the steel strike. What we did was this. There it was in an acute form. We were not greatly concerned with any limitation you had put upon us, because we knew that if we could do something towards the settlement of that strike, you would not chastise us; you would probably praise us. So we immediately sent for the people involved in that dispute, first, in the hope of settlement, and second, because we felt that an actual examination of a concrete case would give us a good idea of the broader picture.
In the first instance we failed. In the second we have, we think, accomplished something, and we believe we learned a great deal about the broader picture of labour relations by the action we took in dealing with those who are at present on strike. Aside from specific recommendations which I intend to go over hurriedly before I shall have finished, what else did the committee accomplish? Surely at least it did this. For the first time, I believe, the people of the Dominion of Canada, the broad number who are neither organized labour nor large employers, have received, as I am sure our committee received, a liberal education in industrial relations, and certainly at the moment know a great deal more than they did before the committee met as to what makes the economy of our country tick, what are the problems facing the different segments of our people, all of whom make up our total economy.
In my judgment at least that was worth while, and that is an accomplishment of this committee. I am not one of the I-told-you-so people, Mr. Speaker, but you may remember that last fall, speaking of the matter of labour in this House of Commons, I made this statement, which I think is still true, that no strike and no lockout can long continue in Canada without a certain amount of public 'support; 'because after all, these two elements, employer and employee, great and powerful as they are, are as nothing compared with the great consuming public in this dominion. They cannot operate this country. Temporary setbacks to the ordinary fellow may come, because he is unorganized. But, in pursuing the even tenor of their way through people like you and me, those of us who are their parliament, the ordinary people will continue to be the backbone of our democracy, the backbone of our economics. That will always, I hope and believe, be so.
Now I may turn to some incidents, some subjects perhaps, which were discussed in the committee itself, and I am going to criticize, I hope justly and, I am sure, with restraint, two things in our industrial relations picture which I think require amending. In doing that, I think it is esential that I mention the evidence given by two or three of the witnesses.
I refer first to Mr. Donald Gordon, chairman of the wartime prices and trade 'board. He appeared before us. I had not the honour of his acquaintance prior to that time, and I believe that was true of many members of the committee. We were all greatly impressed by him. I was particularly impressed by his fearlessness and by his power. I am afraid I was not equally impressed-at times only-by his logic. But I give him this credit: he is a man doing a very unpopular job, he is a man doing a very big job. I do not know, as someone said in the committee, who could have been found to replace him. I am anxious'to pay him all the compliment I can, but at the end of the road I was unconvinced, even when he was supported by the Acting Minister of Finance and by the Minister of Labour, that he had made a case for a ten-cent maximum in the rise in wages in the steel business.
I am not saying that he is wrong. I do not say that for a moment. His opinion is entitled to very great respect, and it seems to me he would be a foolish member of that committee, thirty-five amateurs, who would disregard it. Now we are. being frank about this business and I am sure everybody else will be. Certainly I will be, and I have no hesitation in saying to you, Mr. Speaker, that if Donald Gordon, with all his experience, says, "If I go substantially beyond that, I feel I could not control; it would be dishonest to try", then who am I to say, "You are wrong"? The most I can say is that my judgment, according to the old Scotch verdict, would have been, not proven. On the other hand, and I am frank again, when Donald Gordon says that to me, I, an amateur, am not going to come into the House of Commons and assume the responsibility of saying that he was wrong, because-call it cowardice if you like; call it what you will-if he were right and the collapse did come, I would have difficulty facing you or any other honest people in this country whom I know.
I intend to go a little farther with the tencent theory. It was supported by the Acting Minister of Finance (Mr. Abbott)

and permit me to say very respectfully of the Acting Minister of Finance that he added nothing at

Industrial Relations

all to the evidence of Mr. Gordon. He merely came there with a statement covering six or seven pages and said that Mr. Gordon was right. That is not said critically. I do not know what else he could do; I do not know what else there was to be said.
I endeavoured-and I tried very hard-to find out from the Acting Minister of Finance whether this ten-cent maximum was a matter of government policy. If it were government policy, the farthest he could go would be to say it was his personal opinion. It strikes me that when a minister of finance, dealing with a matter' of finance, gives it as his opinion, it should be government policy whether it is or is not; because, though we heard the other day that this country was not governed by experts, I still think that responsible ministers of the crown, and I am quite sure I am right, should continue to accept responsibility for the things done by persons in the departments over which they have control.
We had a lot of trouble with that ten-cent proposition. Facing us was the fact that in British Columbia fifteen cents had been granted by the regional war labour board. The chairman of the regional board in that province is Mr. Pearson, the Minister of Labour. We had that fifteen cents rate approved by the Minister of Labour on two occasions in the house, who said that it was sound and sensible, and who strongly advised the men to accept it. That put us amateurs in a rather difficult position in trying to form judgments of our own.
May I say at once that the lumber business may be-may be, remember-somewhat different from the steel business. The steel business operates twelve months of the year. The logging end of the lumber business operates nine or ten months a year in seclusion and in faraway places. But let us not forget that there is no ceiling on logs. There is a ceiling on lumber. Fifty per cent of the lumber is exported to places where the owners or the corporation can get whatever prices they care to ask for it. Losses incurred in domestic sales or wages do not matter so very much if they can get it back from Great Britain- because that is where most of it is going- from the United States, and from other places to which these exports go.
May I continue with this ten-cent offer? On the first day of April the prices board granted an increase of $5 a ton in the price of steel. It was plainly said to us by Mr. Gordon that at that time, the first day of April, having made a complete and thorough examination of the position of the steel companies, that in that $5 a ton there was some-

thing for an increase in wages. Mr. Hilton of the Steel Company of Canada told us that so far as he was concerned there was ten cents an hour in that $5 a ton. I say this critically of the government. It seems to me-in fact I am sure of it, and it was sworn to in the committee and I believe it-that if at that time ten cents had been given to the steel workers we would have no steel strike in Canada to-day and the committee on industrial relations would never have been set up. I do not think there can be any question about that.
This brings me to a major criticism, namely, that there has been no direct contact, no proper liaison between the national war labour board and the wartime prices and trade .board. We realize that to hold down prices we must have a ceiling on them, and as a part of that effort we must stabilize wage positions. I do not think anyone in the committee disputed that. What do we find? We find the wartime prices and trade board operating in an airtight compartment. We find the wages board operating in another airtight compartment and no practical liaison between them. Just now we expect to hold the price ceiling, admitting that wages enter into that ceiling as a part of the cost, without these two elements coming together somewhere, is something that I have been utterly unable to understand. The government must accept responsibility for that.
Perhaps I had better read another quotation from the evidence taken before the committee, and it will be the last extract that I shall read. It is a brief statement by Mr. Gordon on that point, and there are many of them. These answers were given in response to questions asked by myself. I am reading from page 343 of the minutes of proceedings and evidence of the committee:
Q. But there is no direct contact between you?
A. That is right.
Then a little further down:
Q. Then who does?
A. Well, each board looks after its own job. The wage control board of the government, as far as industry is concerned, and the national war labour board and the regional war labour board; it is a completely separate field in that respect than the jurisdiction of the prices board.
Then a little farther on:
Q. Yes, but let us take steel. Would the increase given by the prices board, and as you have said, there was machinery whereby these men might go to the labour board and find out what portion of that increase belonged to them. That, in effect, was what you have said?
A. In respect to that, I do not want to split hairs, but I do not want to leave the impression that there was anything in the price increase which was ear-marked in the wage increase. That was entirely in the hands of the management.

Indwtrial Relations
Q. Let us admit that, but what portion of that increase would be determined by the war labour board? You do not fix it?
A. No.
Q. And you leave it to the war labour board to do that?
A. That is right.
Q. There was no liaison between you and the war labour board in this specific case?
A. That is right.
Q. So it could be fairly said, with respect to our machinery in regard to prices and wages, that they are entirely separate and there is no direct contact between them?
A. That is right.
Having read that, may I again say, at the expense of repetition, having regard to these elements which enter into prices, how anyone could ever expect the thing to operate without some meeting place somewhere, .particularly in times of stress such as we are in now, is something which is quite beyond me. Let no one think, sir, that I am indulging in mere condemnation of any board. I realized that the regional board and the war labour board have handled and settled many disputes, and have done so satisfactorily. I realize that the prices board has done splendid work in many instances. But here we have reached a pitch, here we are approaching that place in inflation which Mr. Gordon told us may mean collapse. Under these circumstances, the failure to have contact between these two boards at this time is in my judgment inexcusable.
I want to say a word in defence of the position taken by the labour witnesses on the question of inflation. The evidence they brought was roughly that we, the members of the House of Commons, were mentioned in dispatches and that our $2,000 and ail these things were contributory factors toward inflation. Mr. Conroy did present three sheets of double-spaced typewriting, all containing instances of price increases. On the other hand he gave us instances of increases in wages. I am not covering the whole period. I realize, as it was proven, that generally speaking since 1941 wages as a percentage matter have risen higher than prices. The thing we were up against is that in this very year, in this very spring, the cost of.living index has gone up five points. We have had nothing like it, except after the first great war; five points in a matter of months. That is the situation, we are now facing. What they said was this. How is it there can be all these price increases with no strikes-they were not caused by strikes-yet when labour asks for more than ten cents, anything beyond that is inflation? I am not for a moment saying they proved that Mr. Gordon was wrong, but they did 63260-321J
prove to a humble individual like myself that there are two sides to most arguments, and they did produce quite a number of facts in. support of their position. But I repeat that as far as I am concerned their position also was not proven, and as far as I am concerned I have no intention at this moment of departing from the advice of the man I think best equipped to give us advice at this time.


James Horace King: Order. I am sorry to inform the hon. gentleman that his time is exhausted.


Some hon. MEMBERS:: Go on.


James Horace King: If the hon. gentleman has the unanimous consent of the house?


Some hon. MEMBERS:: Agreed.


Arthur Leroy Smith: I am sorry to have been so long; I shall try to conclude in a few minutes.
I turn now directly to the report of the committee, whose recommendations begin on page 3 of this loose leaf report, and which also appear in the Votes and Proceedings of August 17.
Our first recommendation is the immediate calling of the proposed dominion-provincial labour conference. It may occur to some that this is a bit of sidestepping. It is not, for this reason. Nearly everyone on that committee was convinced, as I am convinced, that one of the things we most require to take care of industrial unrest is a country-wide labour code. I am for it; there is no doubt about that. Why, in this particular case we are up against differentials at Dosco which do not exist at other places, and so on. But may I add that I am not in favour of seeking any change in our constitution under the British North America Act which would force any province to come under a dominion-wide code if it did not want to do so. That is their own business, and you will never find me arguing that they should be forced to do anything like that. I will add this, however, that I can see no reason why, in regard to those provinces that wish to cooperate, we should not have a code affecting them. We are doing that with respect to taxation. The budget speech dealt with that matter; and I feel sure that if we can evolve something of that kind we can have the provinces pass concurrent legislation as we did with other legislation-I forget the name of it-


Humphrey Mitchell: The old age pensions.
Mr. SMITH (Calgary West); -having to do with the settlement of labour disputes. That was done in several of the provinces, so there are no legal difficulties in the way.
Industrial Relations


Humphrey Mitchell: That is the Industrial Disputes Investigation Act, not the Old Age Pensions Act.


Arthur Leroy Smith: Yes. I was not talking about old age pensions; I should like to, but not at the moment. That course could be very easily followed. The next recommendation was:
That in the interval much closer contact be established between the wartime prices and trade board and the regional and national war labour boards.
I have covered that fully, and I need not repeat my argument. That was a criticism, and nothing would be gained by going into it .again. The next recommendation was:
That matters coming before the regional and national war labour boards be handled expeditiously.
That is in there for this reason. If my memory serves me aright we were unanimous on recommendation No. 1; I may be wrong, but in any event we were nearly unanimous. That paragraph merely means this. The men who appeared before us did complain of delays. Those complaints were answered by the vice-chairman, I think it was, of the national war labour board; but whether or not they were answered the fact remains that the process was somewhat slow. This is not a judgment against anybody; it is a suggestion, and a very wise suggestion, for expedition in dealing with disputes of this kind.
Paragraph 2 of the recommendations is simple; I do not need to argue the point, because it is admitted;
2.	Your committee is convinced that continued price control is only possible with a reasonable measure of wage control.
The next recommendation is;
3.	Your committee recommends that a measure of union security should follow certification.
As far as I am concerned I am prepared to accept holus-bolus the remarks made by the hon. member for Cape Breton South (Mr. Gillis) in this house last fall during a discussion of labour matters, in regard to the implementation of this clause. Then I want to spend perhaps a moment or two on the next paragraph:
4.	Law being the basis of our society, your committee condemns:
(a)	the policy adopted by some unions and some employers of disregarding the legal machinery provided for adjusting wages and settling disputes;
(b)	breaches of the law of Canada by the use of physical force or otherwise either by employer or union.
I suppose some bright people will ask, "Why did you include the employer?" Certainly at present all the newspapers are picking on

the worker for being in breach of the law; and he is. There is no doubt about that. As far as I stand and those who stand with me, the right of a man to go to work without being molested while going and coming is his; and let me hope and pray that it always will be. On the other side, however, those of us who have lived for some time know there are what are called goon squads, and these goon squads are not confined to labour. They can be hired in the larger cities of Canada to-day, and within the memory of all they have been so hired. So these words are not put in just to get us by; there is meat in each of them, and something should be done on the other side of that picture because surely we are entitled to live in a country where the enforcement of law is in the hands of officers duly appointed to enforce the law be it on one side of this picture or on the other side. If you will look again at the Toronto Star of to-day's date, a little lower down on the right-hand side of the page we see a heading over an interview with Mr. Millard in which he urges the prosecution of the Steel company for triple pay. If a company are in breach of the law in respect to triple pay they should be prosecuted the same as anybody else. But at the end of that article he makes the charge that there were gunmen in that plant who wounded five of these workers; and if that is a fact prosecutions should be launched in that connection. So I think we are all in agreement in this house. We will never permit the law to be used as a strike breaker, I trust, but we will permit it to be used and will insist that it be used so that individual liberty shall remain and a man may go where he will.
Now I turn to the next recommendation, which was put in at the request of the hon. member for Spadina (Mr. Croll):
5.	Your committee recommends that the law of picketing be studied with a view to its modernization and clarification and for the purpose of making it more effective for the protection of the rights of all elements in the community.
I have promised to assist the hon. member any way I can in respect to that, but I do not think we need weary the house with it just now. Then I come to recommendation No. 6. We had a great deal of trouble with this one, particularly with the hon. member for Vancouver East (Mr. Maclnnis), who led the attack, in which he was joined by the hon. member for Spadina and one other hon. member whose name I have forgotten for the moment. What we were seeking there was this, and it comes as perhaps the joint thought of all. Perhaps I hadi better read it:
Your committee recommends that the Minister of Labour may. at the request of either party to an industrial dispute, and if he deems fit,

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either before or after a strike is in progress, direct that a strike vote be taken under government supervision to determine the wishes of the men affected as to whether a strike will take place or otherwise.
What does that mean? It means this: It is -the right of the secret ballot. To copy the words of the hon. member for Cape Breton South (Mr. Gillis), it is the introduction of the rule of law into these matters. I am not criticizing the upper bunch in the top drawer of union leadership. But I am supporting, and will continue to support, and I trust this house will continue to support and affirm the principle of the secret ballot in any organization of this kind, just as we have it when we are elected to come here to the House of Commons.
It has been suggested that the words "before or after a strike is in progress" are meaningless. Well, let us look into the coal mining business, because I know at least a little about it. There we have what are known as pithead strikes. They are illegal. It simply comes up when someone has been called a son-of-a-gun by a foreman, or something of that kind. Out they go from the washhouse and they say, "Nobody goes down the mine to-day, daddy. We are on strike." In other words, the strike is on before anyone has voted or has a chance to vote.
So what we are saying, in No. 6, is that in strikes of that kind, after the strike is in effect the minister can go in and take a vote of those persons concerned. That is all it means. In my judgment-and I know I will be criticized for saying it-section 6 will be the biggest advance-when it is made into legislation-in labour legislation ever made at one time by this House of Commons. I have no doubt about that. I am told that it will create resentment throughout labour across the country. Well, if it does, I cannot help it. If assuring to the individual, by ballot, the right to determine his own future is a matter of resentment by labour, against me, then let them resent it. I am for the man who wishes to run his own life in his own way. .
I now turn to two simple ideas of my own.
I have said before, publicly, and I have said it privately, that any man in the Dominion of Canada who is willing to work is entitled to a wage, not just a living wage, but a wage which will keep him and his family in some comfort and with some of the luxuries of life. That is where we stand; that is where we should stand; that is the foundation from which all these wage rates are negotiated.
May I add this-and with this the house will be pleased to know that I shall close- that I think one of our main troubles in industrial relations in Canada lies in the fact that management and labour do not know one another. It seems to me a strange commentary that I am permitted in this House of Commons to rise in my place and say that Mr. Millard and Mr. Hilton, the director of the union and the manager of the company respectively, had to be introduced to one another in this building by Mr. Brockington.
Mr. Speaker, we shall never have decent industrial relations, peaceful industrial relations, until we are ready to credit the other chap with some honesty and some intelligence.
I realize that in some places you cannot do that. I realize that we had before us one witness who, in my judgment, did not seek a settlement of the strike, but who sought only continued commotion. But that is not true of the great majority. If we can but get to know one another, and have employers and the representatives of employees really get to know one another, and to learn that the qualities of each are not bad, we shall have made some advancement. The office calls the organizer a communist; then the labour organizer in turn calls the office a fascist, and that is about the way things begin in labour relations in Canada.
So that in this, as in all other things, with a bit of tolerance, a bit of understanding, with a broader outlook aside from our own business, and with an understanding of what we are doing for the future of our whole economy, no one need worry, nor need anyone despair for the future of this great Dominion of Canada.


Mr. DANIEL McIVOR (Fort William):: Mr. Speaker, I think I have some right and some qualifications to speak on this question. It is a great pleasure to me to follow a former hero of old Wesley college, and an opponent in athletic contests. He gave a good account of himself then, and he has given a good account of himself to-day.	.
W'hen I sat across the way I stood up and commended the Prime Minister (Mr. Mackenzie King) upon his appointing a real labour man to the position of Minister of Labour. I said this, Mr. Speaker, that the present Minister of Labour (Mr. Mitchell) had a record second to none in Canada as a labour leader, a labour organizer and a man who had backbone enough to stand up and hit out from the shoulder. I do not think there is any man in Canada who has taken more punishment than our Minister of Labour. But when I used to take part in the manly art I found it was the man who could take the most punishment who often won out, because he could bide his time, take it in his stride, and then hit when he had the most chance for success.
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If there is a man in Canada who should have the gratitude of the workers of this country, it is the Minister of Labour. I am tempted to quote from Bums these lines:
Man's inhumanity to man
Makes countless thousands mourn.
He has taken it in his stride, and has stood for peace, order and good government. I commend him for it, and will support him to the limit. Any angel Gabriel who came down *here to-day to take the position of Minister of Labour would have one of four or five organizations, or perhaps all four or five of them, on his back. If that Minister of Labour did not support the C.I.O., then he would not be good enough for them. If he did not support the C.C.L., he would not be good enough for them. If he happened to support the Catholic Union in Quebec, there would be those who would say he was out to hold Quebec for the Liberal party in Canada.
Our Minister of Labour has a job; it is a man's job, a job for a man with a head on his shoulders, a man with red blood in his veins, with lots of health and strength who would not run away from a job like this. That is our Minister of Labour.
It has been stated by many experts that we have the best labour code produced by any country in the world, and for that the minister must be commended. I do not ask the house to take that on my word. When the labour code was passed this appeared in the Montreal Herald:
Mr. A. :E. Mosher, president of the Canadian Congress of Labour, in a press statement made on F ebruary 17, 1944, and which is reported in the Montreal Herald, under date of February 18, 1944, is quoted as follows:
"In my opinion the regulations governing the wartime labour relations, as adopted by the federal government, will go a long way toward meeting the demands of organized labour for a satisfactory labour code ana I feel the government deserves credit for its action.
One of the privileges labour unions appreciate most highly, and for the maintenance of which the free peoples of the world are fighting, is the right to criticize a government when its policies or actions are considered objectionable: but it would be unfair if it failed to be equally outspoken in commending any government for what appears to be a sincere effort to promote good relations between workers and employers.
In view of the difficulties which were inevitable in handling the unprecedented problems involved in legislation of this character, it is scarcely to be expected that there will be entire satisfaction at the outset, but I believe the government has done a good job in the circumstances and I do not hesitate to congratulate most heartily both the government and its officers who were responsible for drafting the regulations."
I could refer to what was said by Mr. Harold Crabtree, chairman of the executive of the Canadian chamber of commerce, when [Mr. Mclvor.l
he paid a tribute to the minister and to the government. The official publication of the trades and labour congress, namely, the Trades and Labour Congress Journal for March, 1944, contained the following statement on its editorial page in connection with the appointment of a labour relations board:
We have at all times protested and resisted the introduction of orders in council which, in our opinion, were unnecessarily drastic. We will just as readily commend our governments when legislation is enacted which, in our considered opinion, is in the best interests of the many thousands whom we represent, and we state without fear of successful contradiction that order in council P.C. 1003 is a good piece of legislation and warrants expressing our appreciation to the government for its enactment.
The labour congress of Canada expressed its appreciation, and other leading organizations in Canada have paid a tribute which practically amounts to saying, "Thanks to you, Mr. Minister of Labour." I know the Minister of Labour has had his testing times and I confess that I was guilty of putting him through one. When the seamen were on strike I called him at one o'clock on a Sunday morning. I received a call from the trades and labour council of Fort William that eighty-four men were stranded there who had to be at work on Monday or they would suffer a $20 a day fine. Sometimes it is not easy to get a man on Sunday morning because he may be at church or he may be some place else. I took the risk of calling the minister and I told him what had happened. He replied-, "Dan, we will do our best for these men." As I say, eighty-four of them were stranded at the head of the lakes because those who wanted to break the seamen's strike had taken away their boats. As a result of the minister's action, these men received their fares and were able to go back to work. So again on behalf of the seamen's union of Canada, I say, "Thanks to the Minister of Labour."
I was surprised and pleased at the discussions that took place in the industrial relations committee. I was surprised to see two leading members of the C.C.F., both keen and honest men ready to do the right thing for Canada, taking sides and voting against each other. It shows that there is some hope even for the C.C.F. notwithstanding what some people may think or say.


Major James William Coldwell: They vote according
to their conscience, which is more than the Liberal side do.


Daniel (Dan) McIvor: I stand for a square deal for the man who toils. He should have a living wage. The thing that causes a great deal of

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trouble in Canada and in other countries is the fact that a man has to toil six, eight, ten or more hours a day and is unable to get more than a living wage. Then he sees the man who employs him able to go to California in the winter time, able to send his children to the university. If the mother of the children of that worker puts up fifty cents an hour for a music lesson for a child, they have to skimp on something else. Somebody has said that he would rather see the great masses of the citizens of our country living in peace, in health, with sufficient food and clothing and opportunities to educate their children, than a few rolling in wealth. I do not think anybody wants the irritable discontent that follows when our workers are not properly looked after.
I stand for a living wage for every toiler. If he does not get it, it is just too bad. I must admit that the fault is not always on the one side. There are those in this house who will remember the Winnipeg strike of 1919.
I took part in that strike. I interviewed the striking committee, although I was not one of those in that position. When the strike first started we were sure that the strikers were bound to win. Then the strike committee called out the bread wagons, the milk wagons; they shut off the water in some places, and they called out the firemen. I told the strike committee then, "You have gone too far." Public opinion just came back with a surge and beat the workers. It took them years to get back again what they had lost. It was not until the Liberal party in this house gave labour a square deal that they regained their ground. They have had better success than they ever had in the history of Canada.
The secretary of the trades and labour council of Fort William says that there has never been better legislation than that which was passed by the Mackenzie King government, using my own words. I would pay a tribute to the trades and labour council of Fort William because I do not think there is anything better in Canada. We have been remarkably free from strife. The head of that union was able to find time to lead a campaign to provide $40,000 for a Salvation Army hostel. That shows that he has a heart for the man who is down and I want to pay him a tribute.
As I said, strikes are not always caused by one side. The hon. member for Calgary West (Mr. Smith) has suggested that there should be a secret ballot, and I think the same way. I support the resolutions which were passed by our committee. I think they will go a long wav to help, and I think we should have a secret ballot. I can tell the story of one man, an employer of labour, who said, "If any man
comes to this ballot box to vote in favour of a union in our place he will be kicked to some place out of here." Of the two men who were the first to vote, one had had twenty years service in that plant, and they both lost their jobs. I heard of rival unions that took a strike vote in a plant. They had two boxes with a union man standing at each box, one for "no" and one for "yes". That is not secret enough. A man should have a secret vote; and I think this resolution will be helpful.
In this committee I heard a statement from one of the members about which I have thought a good deal. He said that there were three stages in the development of a union leader. One was the agitation stage. I think we had an example of it in our committee, and I did not agree with that particular individual. Then there is the administrative stage, when he is willing to go a little farther and listen to what the other fellow has to say. Then there is the cooperative stage; and in that class I would put men like the late Tom Moore, who was, willing to go all the way and lead his workers in cooperation with capital. Capital and labour must get together. You may have a cure for this trouble; I have it. Labour and capital must get together;^ if they do not, both will lose out and something else will take their place.
I have here a quotation from the Ottawa Journal:
Perhaps both management and labour in this country still have to learn . . . that there exists a public interest which is over all. The mood of "the public be damned," whether coming from capital or labour, has no place m our modern life, and the sooner capital and labour come to know that and to act accordingly the better it will be for them and for us all. Labour will have to learn that there can be no hope for it, no gain for it ever, beyond processing ot our resources, which is our only wealth, at reasonable profit. Capital will have to learn that labour is more than a commodity, more than part of its raw materials, that it is entitled to share justly in the fruits of production.
I cannot close better than by giving a summary of a resolution passed by a group of men in Fort William, headed by a gold medallist, Doctor R. K. Dewar. These gold medallists have a little more grey matter than most of us, and if it runs in the right channel it can do some good. The resolution they sent to me stated that the men who put their money into a business have a right to a fair profit; the management and the labour who put their lives into it have an equal right, not a commodity right, but a living right to a living wage; and if there is anything available over and above that, it must be divided between those who toil and those who put their money into the business. I am glad to know that at the head of the lakes we have business
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concerns which are sharing their profits with their workers; and, so far from being dead, or nearly so, they are the most vigorous businesses at the head of the lakes. When a man gets a living wage he has more incentive to produce, and the more that is sold, the better it is for him and for those who employ him. The more production there is, the more money is available for the employer and the better the income for the individual.
In closing, I would just say that to my mind the remedy for our trouble to-day is to observe the old injunction, "Love your neighbour as yourself". If you hate your neighbour there is little hope for you; if you follow the leadership of Him -who said "Love thy neighbour as thyself", you will go far on the way to personal and industrial peace and good will.


Angus MacInnis: As one of those who had the honour to serve on the industrial relations committee I wish, in saying a few words, to associate myself with what the hon. member for Calgary West (Mr. Smith) said in regard to the chairman of that committee. It has been my experience also that the chairmen of our standing and special committees of parliament are always fair and conduct the proceedings with dignity. I may go farther, and associate myself with the hon. member for Calgary West when he said: that it was a pleasure for him, to work with all the members of that committee-up to a certain point.
I am sorijy, however, that I cannot go so far with him as to approve the recommendations made by the committee. Not that, with one exception, there is anything wrong with those recommendations, but in my opinion the report is an anti-climax, following the urgency of the circumstances under which the committee was set up, and that urgency has not lessened during the time the committee was sitting; if anything, it has become more grave.
Let me quote briefly from the speech made by the hon. member for Calgary West the day the committee was set up. When he proposed the committee he said this as reported in Hansard, at page 3489:
My suggestion is this, that this house should immediately set up its industrial relations committee. To that committee should be invited__
yea. brought if necessary-those persons who might not like to come. I think I am not saying anything very unusual, because there, and only there, can meet the big three, so-called-the three important people, the consumer, labour and management in industry.
A little later on, he said:
Then it seems to me to these people on strike, and those who are talking strike, such as the meat people the railway people and so on, this parliament should say: We have given you the last and best tribunal this Dominion of Canada TMr. Mclvor.]
knows. Come there with your problem. Meet your opponents face to face in the presence of that great referee, the consumer of Canada . . .
The consumer of Canada, if that is what the committee is, having met these people face to face, having heard their troubles, comes to this house with a solution. What is it? To call a dominion-provincial conference to set up a labour code; make a recommendation condemning the use of force in the settlement of disputes; urge that a committee be appointed to investigate the law on picketing; recommend that a measure of union security should follow certification; assert that price control is only possible with a reasonable measure of wage control.
All of that, of course, I can support. But there is nothing in it that can do anything toward settling these disputes which are disrupting the economic life of the country at this time. They do not touch the fundamental causes of these disputes. The one I do not agree with-and I might as well deal first
with the recommendations of the committee_____
is No. 6. The hon. member for Calgary West read it; now let me read it:
Your committee recommends that the Minister of Labour may. at the request of either party to an industrial dispute, and if he deems fit, either before or after a strike is in progress, direct that a strike vote be taken under government supervision to determine the wishes of the men affected as to whether a strike will take place or otherwise.
I imagine that the words "or otherwise" means, or continue". The hon. member for Calgary West mentioned the sort of circumstances in -which a vote of this nature would likely take' place. He said it might happen in a mine where the men might come to the pithead- some morning and, if the superintendent or the foreman did not take off his bat to the men as they came to work, they might say, "We will go on strike". Those were not his words, but it might be anything. But that is not what is in this recommendation.
It says something quite different and does not refer to a pithead strike or to any particular kind of strike. It refers to any strike, befbre it begins or after it begins; and if this is approved- by this house, the Minister of Labour, having the approval of this house, can take a strike vote in any industry where there is a strike. He can go over the head's of the elected representatives of the workers' organization and take a vote to determine, without reference to the organization at all, whether the men want to go back to work or stay on strike.
If there is a better way of destroying the trade union movement, that way has not yet

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been called to my attention. I say that as definitely as I can because it is implicit in this recommendation:
. . . either before or after a strike is in progress, direct that a strike vote be taken under government supervision to determine the wishes of the men affected as to whether a strike will take place or otherwise. .
That is, or continue. Before dealing wiith that, the hon. member for Calgary West referred to the interview of F. B. Kilbourn, the controller appointed in the steel dispute. Mr. Kilbourn says this-and let us see in what respect it differs from the recommendation made by the committee.
However, if it is put up to him-[DOT]
That is, the settlement of the strike.
-he said he believed his first step would be to find out the facts of the situation. He said he thought this could only be done by a thorough examination into the desires of the workers. He said he believed this could be done only by having all workers in the affected plants answer a set of questions. The survey, he said, would be conducted as balloting in an election is conducted, in complete privacy. The worker would go into a booth and write his answers and the sheet, which would bear no method of identifying the worker, would be deposited in a ballot box.
He does not advocate that .the government should take the vote, or that it should be taken under the supervision of the Department of Labour, but taken by some impartial individuals. But he did not say who is to choose the impartial individuals? As a matter of fact, Controller Kilbourn is proposing, in this interview, the recommendation made by the committee in No. 6 of the report. If iwe do not like it we had better be quite sure of that before we adopt these recommendations.
As far as the report is concerned, I think I can leave it at that. The other six or seven recommendations are not of great value; they are neither here nor there. If they have no great value, at least they are not harmful. But as regards No. 6, as I warned the committee, so I warn this house. If you pass this you are putting your stamp of approval exactly on what the hon. member for Calgary West denounced when it was proposed by Mr. Kilbourn.


Arthur Leroy Smith: You do not expect me to agree with you, do you?


Angus MacInnis: I am sorry my hon. friend will not agree with that, but I am glad to leave it to any impartial tribunal, that what I say is 'based on the wording of our recommendation and on the similarity of the method Mr. Kilbourn is recommending, and if my hon. friend cannot see that, he is less logical than I think he is.


Arthur Leroy Smith: One of us is; that is true.	[DOT]


Angus MacInnis: I imagine we cannot agree which one is not.


Arthur Leroy Smith: I cannot get that.


Mr. ROSS (St. Paul's):: That is too deep.


Angus MacInnis: It is not deep at all. A part of the preamble to the report states:
An opportunity was thus afforded for the first time for labour and management to present to a committee of parliament such statements as the terms of your order of reference required and such are on record.
It may or may not be strange, but although numerous labour organizations made representations to the committee to be heard- more labour organizations than in fact were heard-no employer, as far as I know, had asked to come before the committee. We had three employers of labour before the committee. They were all asked to appear, and no other employer of labour in Canada expressed any desire or even gave any hint that as far as he was concerned there was a committee of parliament investigating the cause of industrial unrest in Canada. If I may be allowed the expression, Canadian employers treated the committee with the utmost contempt. Perhaps that in itself should give the key to the cause of labour unrest in Canada, namely, that employers want to ignore labour in the same manner as they ignored the parliamentary committee. As far as they are concerned, the industries of Canada should be run for the profit of employers and not for the benefit of the Canadian people.
I do not think any member of the committee will deny or can deny that the real cause of the labour disputes that are at present wrecking the economy of Canada is the demand by the workers for increased wages. That is one side of it. The other side is the insistence of the government that wage increases of over ten cents an hour will not be allowed. That was the question we always came up against in the committee. As a matter of fact other questions really were not of great importance.
As was pointed out by the hon. member for Calgary W'est, the Minister of Labour had intensified the situation by putting his stamp of approval on increases of fifteen cents an hour in one section of Canada and then stating that in other parts of Canada increases of over ten cents an hour would not be allowed.


Humphrey Mitchell: I never said anything of the kind.

Industrial Relations


Angus MacInnis: The minister says that he did not say. anything of the kind. Perhaps in a sense he is correct. In the committee we could never get a direct answer as to whether a ten-cent limit w'as the policy of the government or not. The fact remains that regional boards-


Humphrey Mitchell: Would my hon. friend dictate to the regional boards?


Angus MacInnis: The Minister of Labour does.	.


Humphrey Mitchell: No, he does not.


Angus MacInnis: The statement of the deputy minister of labour in the committee was that he had instructed the regional labour board. Not only did he do that, but he said that he would give an undertaking that the national board would pass it as well.


Humphrey Mitchell: Let us be fair about this. Perhaps my hon. friend will give me credit for this. He may have misunderstood me. We certainly had that out in the committee. There was the definite statement that I would recommend. I said that we were going to do the bold thing to try to prevent this strike. What I said, and what the deputy minister of labour said, was that we would recommend. We argued that out in the committee. To say that I was telling them what to do is to say something which is not right. I think I have more sense than that.


Angus MacInnis: The Minister of Labour will have to decide for himself just how much sense he has.


Humphrey Mitchell: Be fair about it.


Angus MacInnis: When I put the question to the deputy minister of labour he said that he did it and that he would do it again.


Humphrey Mitchell: Yes, recommend.


Angus MacInnis: Not to recommend.


Humphrey Mitchell: Let the record speak for itself.


Angus MacInnis: That is what I am doing. The record is there and it can speak for itself. I say that that is the root cause of the labour unrest in Canada to-day. It can be put in this way: The cause of all our labour trouble, the cause of all disruption in industry is the difference between ten cen-ts and fifteen cents. The steel workers gave an undertaking that if ten cents were granted now and an assurance that the other would be granted at some time decided upon by an arbitration board, they were prepared to go back to work at once.


Clarence Decatur Howe: When did they say that?


Angus MacInnis: It is in the letter from Mr. Millard to Mr. Brockington and in the proposals made by Mr. Millard to the committee itself. They were prepared to go back with ten cents now, on the understanding that the other five cents would be paid later, at some time within the calendar year.


Humphrey Mitchell: With 20i cents at Sydney.


Angus MacInnis: With the differential at Sydney. If my memory serves me aright they were prepared to refer that to arbitration.


Mr. MAYBANK:: No; that was ruled out of arbitration.


Angus MacInnis: I will not argue the point.
Whatever Donald Gordon may say, I am convinced that the labour disputes which are disrupting industry in Canada during the last six or seven weeks, two months in some instances, are doing this country a great deal more harm than the increases which the workers are asking if they were granted.
Let us remember this. I know the minister will not agree with me. He always regales us with what happened in Germany in 1919, and the danger that it may happen here. Really that does not impress me, and I should be very much surprised if it would impress the minister himself if he gave it a little thought.


Humphrey Mitchell: The minister says without equivocation that the working classes always pay the freight when you get into an inflationary period. That has been true in every country where it has happened, just as they are paying the freight in the United States at the moment, in France, in Holland, in Belgium and in any country to which you wish to go. The working classes always pay the freight.


Angus MacInnis: I will go much farther than that and say that the workers have paid the freight whether there has been inflation or not. They have always done so. They have carried the world on their backs, and those people who sympathize with labour are prepared to do anything except get off their backs.


Arthur Leroy Smith: The hon. member does not mean that.


Humphrey Mitchell: The hon. member does not mean that.


Angus MacInnis: Of course I mean it; there is no reason why I should not.
There are a number of factors which enter into our industrial difficulties. The first is the natural hostility-I say "natural hostility"- which exists between workers and employers.

Industrial Relations
It is the hostility which exists between buyers and sellers, no matter where you find them. In this country the employers have not yet reached the stage where they are willing to accept their employees as citizens of the community and deal with them as citizens with equal rights with themselves.
One of the things which impressed me in the various documents placed before the committee is that, despite all the education, all the laws and regulations which w-ere passed during the war years, the employers of Canada are still opposed to meeting and negotiating in good faith with their employees. When you have employers acting in that way you will have employees who will use their power to the limit, the moment they feel that they have power. Let me quote briefly from some of the documents which were placed before us. I have in my hand a report on Brunner Mond, by Magistrate J. A. Hanrahan, who was appointed a commissioner in this dispute by the Minister of Labour (Mr. Mitchell). The report states:
The contract between this company and workers expired last November. Amendments suggested by employees were submitted last September. Members of negotiating committee complain very bitterly of what they describe as the disheartening delaying tactics of company from then until July of this year-
That is from September of last year until July of this year. Do you wonder there are strikes?
-which prevented a new agreement being completed and finally made strike action imperative. This is a factor that has undoubtedly-contributed to the present very firm demand for some form of union security and warrants the conclusion that it comes ' from deeply affronted employees rather than having been inspired by union officials.
Then from the same document:
The general good will and earnest desire of this local to act fairly with company is further evidenced by fact that when strike was called no objection was taken to main office staff, engineers of pump house and purification plant, boiler room and engine room, engine crew to haul coal, crane operators to load cars of coal and remove ashes, the chief engineer, the fire protection chief and the chief electrician for safety remaining on duty. As you are aware this is somewhat contrary to local practice. The company does object to what they describe as illegal picketing.
I have wired appeals to Mr. Robert W. Atkinson, sales manager of Brunner Mond of Canada, Montreal, and Mr. Carlton Bates, director of operations, Solvay process, Syracuse, N.Y., whom workers believe are really determining company policy in this matter for a modification of their instructions to Mr. J. B. Aylesworth, K.C.
But no matter what the appeals were, these people do not want to deal with their employees, and they are willing to disrupt the 63260-322J
industry of Canada in order to defeat the efforts of their employees to organize. I was also interested in the report of Judge Cameron, who was commissioner in another dispute. I thought his report, in putting blame on both parties, was most fair and in that way was in direct contrast to the report on the steel strike, made by Commissioner Roach. In his report, at page 985 of the reports and proceedings of the industrial relations committee, Judge Cameron said:
The extreme rigidity with which the strategy committee regarded the "seven point programme" is seen in the case of one company which had negotiated a contract in February, 1946, and which resulted in substantial wage increases. The union stated that in spite of wage increases then given and after discussion of the "seven point programme," it still insisted that an additional 20 cents an hour should be granted by that company.
Then he continues:
On the other hand. I think it fair to say some of the companies have not approached the negotiations in a realistic manner. The union's programme was presented to the companies as a basis for local negotiations more than six months ago-
Those who recall that there is a rubber strike in progress in Canada at the present time, which has been going on for some two months, will remember that the rubber workers had tried to negotiate for six months before the strike was called.
-and in a number of cases concrete counterproposals were never made by management. I am satisfied that a more reasoned approach to the problems involved, rather than a mere rejection in toto of all the requests made, would at that stage have brought about satisfactory results on a plant basis in some cases.
The reply of the committee to that is a recommendation that the government take a strike vote, after the employees have been on strike for two months or more, to see how they feel about going back.
A good deal has been said in the press and elsewhere about the attitude of trade union officials. A remarkable report or finding was made by a justice of the Supreme Court of Canada, Mr. Justice Rand, last fall in the Windsor automobile dispute. I do not know how many hon. members have read it, but if they have not already read it I suggest that they do so. They will find that this justice of the Supreme Court of Canada does not agree that the labour leaders or trade union leaders in Canada are irresponsible. He says:
I have had an opportunity of sizing up the leadership of this union so far as it is represented by the committee of negotiation. The members are all of English-speaking origin and British citizenship. They have impressed me as being made of the stuff of which ordinary Canadians are made. With the exception of Messrs. Burt and MaeLean who are on leave of absence
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from General Motors at Oshawa as international representatives of the union, they are men with seniority in the Ford plant ranging from ten to eighteen years. They conducted themselves in negotiation with intelligence and reasonableness. I have no doubt their dominating interest is the job of those they represent in that industry and that their object is to attain for those employees and their families a secure and self-respecting living, which seems to be the object of most Canadians. That aim is legitimate. whether or not attainment is possible.
It has been suggested that the union officers, as other labour leaders, are primarily concerned with the maintenance of their positions and power and no doubt some of them have experienced stirrings cf that nature. But union organization is admittedly necessary in the present set-up of our society and we cannot expect these men who have gifts of leadership-and it is by such leaders that movements against wrongs are initiated-to be quite free of those human frailties from which only a few saints escape. The only effective remedy for abuse of this nature is a greater democratization of the union.
And may I say that greater democratization of the union cannot be brought about by taking away the powers and prerogatives of union members by insisting that the government may take a strike vote at any time it wishes. We cannot get democratic unions unless we give union responsibilities, and insist, too, that they discharge those responsibilities as citizens.
The second reason-and I have dealt with it before-for industrial disputes is the refusal of employers to deal fairly with their employees. The third, in my opinion, is the failure of the government to impress upon employers, upon workers, and upon the public generally, the urgent need for production.
Even before the war came to an end, a cry went up for the removal of all controls- "Let us get back to business as it was". Of course that meant business as it was before the war when employers had hundreds of thousands of unemployed who could fill any jobs which might be offering. Hon. members fell for that sort of thing. Demands were made on the government every day from this side of the house by the official opposition for removal of controls. I was amazed to see how quickly those lion, members were impressed by Donald Gordon when he appeared before the committee.
Consequently there is no recommendation from the committee stating that in its opinion it would be better to grant the increases in industries where they are asked, and get those industries operating. With our improved productive capacity, in my opinion we would in no time catch up with demand. We would not be looking for commodities to meet needs, but for needs which could take the commodities we had to offer.
[Mr. MncInnis.J
I do not think we have any idea of how the productive capacity of this country has increased during the war. Even in Great Britain, where the whole economy of the country was put to war uses, they have made a remarkable, one might almost say a miraculous come-back in the production of ordinary consumer goods. But in Great Britain employers, labour, the government and consumers got together to discuss production, and the needs of production.
I have here an item from the London Daily Herald of July 31, 1946, which states:
Important plans for close consultation at top level on economic matters between industry and the government were outlined in parliament yesterday by Mr. Ness Edwards, parliamentary secretary to the ministry of labour.
This consultation is to be through the minister of labour's national joint advisory council, on which the trades union congress and the British employers' confederation are represented.
That council, superseded during the war by a smaller body, is being reconstituted, and will hold its first meeting soon.
Mr. Edwards said:	"there is no intenton of
departing from the government's declared policy of entrusting responsibility for determination of terms and conditions of employment to the joint machinery of negotiation between employers' and workpeoples' organizations.
"But the government considers that it will assist and reinforce this machinery of joint negotiation if there is the closest possible contact between the two sides and the government."
I notice, Mr. Speaker, that you are going to tell me my time is up. I shall just say that on various occasions I have urged the Minister of Labour to bring the different factors in industry together and to impress upon them the urgent necessity for production, not only for our own welfare in Canada, but for those things for which our young men died during the war. That is of the utmost importance. But it cannot be accomplished with Pollyanna proposals such as are contained in the report of the committee on industrial relations.
Mr. DAVID A. CROLL (Spadina): Mr. Speaker, I wish to join with the hon. members for Calgary West (Mr. Smith) and Vancouver East (Mr. Maclnnis) in paying tribute to the chairman of the committee.. Perhaps I could sum up in these words, he was a happy choice.
I enjoyed working in the committee with all its members at all times. I was particularly impressed to-day when the hon. member for Calgary West drew on his wide knowledge and experience, his broad understanding, and gave us a treat in what I believe was a brilliant summation of what took place in the forty-nine sittings of the committee. But it left very little for me to say. To follow the hon.

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member for Vancouver East, with his thoroughness and knowledge of his subject, leaves even less.
I do believe this, though, that it can fairly be said the country expected too much and got too little from the committee. Rather than devote myself to a discussion of the various portions of the report, I shall discuss only one or two phases of it. The hon. member for Calgary West has already indicated that I opposed section 6. Members of the committee know that full well. 1 consider it important, however, that this section be understood by the house; we have already had some misunderstandings.
I feel strongly in the matter, and this prompts me to read the section once again, because each one who has read-it has emphasized a different part. It states:
Your committee recommends that the Minister of Labour may, at tire request of either party to an industrial dispute, and if he deems fit, either before or after a strike is in progress, direct that a strike vote be taken under government supervision to determine the wishes of the men affected as to whether a strike will take place or otherwise.
What does that mean, as a practical solution of labour disputes which have already been carried to the point of strikes? I suggest that we should examine the clause carefully. Let us assume for the moment that a strike is in progress. Hon. members know full well that this means that all or part of the men have walked out. It means, too, that a picket line has been established. It may be that the machinery in the plant is silent, or that machines are being manned by employees who are not on strike. It may also mean that machines are being manned by others who have been brought in as strike-breakers.
The recommendation says that the minister is empowered to order a vote at the request of either party to a dispute. Once a strike has taken place, all the minister can determine is something that is self-evident. A vote by whom? It says, "The men affected." We have the right to assume that "the men affected" means both sexes of all ages. I believe that was the intention of the committee.
Let us see who are the men affected by a strike vote. No one will deny that the strikers, the people who are on the picket line, have a right to vote. No one will deny that those who disagreed and continued production, whether they passed through the picket line or whether they were parties to a lock-in, are entitled to vote. The third group would be the persons who were hired by the company since the strike began and who are dependent upon the company for their present and future livelihood, the people who are
commonly known as strike-breakers. The fourth group included in the term "the men affected" would be the office help, the messenger boys, the stenographers, the foremen, the superintendents, the technical people right up to the vice-presidents.
Can anyone suggest that they are not all men who are affected by the strike? Can we afford to accept this recommendation and turn our backs on the Rand formula which brought about a new equation in labour relations, which said in effect that union security equals company security? In my opinion that was the most progressive and socially minded document on labour relations that this country has enjoyed in the forty years since the industrial disputes act was passed. We ought to give it an opportunity to see if it will work before we disregard it.
The decision was first given in the Ford case at Windsor. I have known of the labour relations in that company for twenty years. The annual report of the Ford Motor Company of Canada Limited was presented before the committee, and a portion of it indicated that they were in complete and absolute agreement with the Rand formula. More than that, it had brought peace to the plant; it had brought unity to the plant; it had improved the man to man relationships. It has been said that the Ford Motor Company was decentralizing, and one of the reasons offered was its labour relations. However, to-day plants on the outside are being sold and they are moving in again to Windsor. They are doing this because labour relations are such that they once again feel they can carry on in Windsor.
The Rand formula laid down fundamental principles for this country. Mr. Justice Rand made the bold statement that all workers in a plant benefit from union representation; that all should contribute but that they need not join the union unless they so wished. He declared that in case of a strike every employee, whether he be a union member or a contributor, should have the right to vote. No one could quarrel with that and I think this house generally endorses it. In effect he said that those who share the benefits should also share the penalties. If we accept the committee's recommendation we turn our backs on Mr. Justice Rand's decision and the government will be disowning the very child that it brought into being.
The other part of the clause speaks of a vote under government supervision at the request of either party to the dispute. If we have a strike, we have already had a vote and the union has had a mandate. Will the union ask for another vote? Can anyone conceive of any possible circumstance under which the
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union would ask for a vote? Let us examine the other side for a minute. I think we can appreciate that there will be occasions in a dispute when an employer would consider it advantageous, particularly if all the men affected would have the right to vote. Let the strikers' morale sink to a low point. Let the compaign reduce the resistance of the strikers' families. Let the plant be loaded with strikebreakers. Let the employees who have not gone on strike be paid triple pay. Let those things happen, and the employer will certainly call for a vote.
Let us assume for a' moment that the employer has picked the time properly. A vote is taken and the minister then determines that a strike does not exist. What happens when the minister says that there is no strike? It is obvious that it then becomes a disturbance of the peace. It is inevitable, if we are to have law and order in this country, that either the police or troops will have to be called in to deal with the matter of the disturbance of the peace. The only alternative is that production resumes on the employer's terms. That is what I think this clause means and I so submit to the house. I think the government is put in an impossible position, because under these circumstances it may well be accused, not without some justice and some truth, that it is in the business of strikebreaking.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. CROLL:: Before this house rose at six o'clock, I was dealing with section 6, and pointing out to the house that this section lends itself to many and varied interpretations. My second point is that section 6 in its present form will defeat collective bargaining, which is now the law of the land under P.C. 1003, in that it will result in a greater reliance upon the state, which betrays a lack of faith in collective bargaining and the democratic processes of unions. If section 6 stays "as is", it will inject the government into almost every labour dispute, with the result that in the final analysis it will be fixing not only wages but working conditions, and it may well be interpreted to be attempting a legislative short-cut to bring about industrial peace. That, I submit to the house, has already been tried. May I point out that the German labour front-and I apologize to the minister for even mentioning that as a labour movement in the same breath with our own-was TMr. Croll.]
modeled exactly on that principle. In times of a dispute they immediately used a referendum, with the result that unions lost their independence, lost their identity, very shortly became instruments of the state, and faded and vanished from the scene completely. I think hon. members will agree with me that it would be a catastrophe to weaken responsible trade unions, because they have a niche in our way of life and they belong.
My third point is based on the words "before a strike is in progress". I assume that would mean the negotiating stage. Let us assume that the company offers six cents and the union counters with twelve cents. The minister is then put in the difficult position of having to decide if six cents is a fair offer, and he may step in and take the vote. I submit to the house, is it not quite possible that without a dislocation of industry the final result would be that the union would receive nine cents? Those who were members of the committee will remember this particular evidence. Stelco first offered five and a half cents, then ten cents, and finally eleven cents-ten cents straight and a cent for holidays.


Arthur Leroy Smith: Where was the evidence of that?


Clarence Decatur Howe: There is no evidence of that.


David Arnold Croll: Oh, yes; there were six
holidays there, which made up another cent. Mr. Brockington's report indicates it. Algoma made an offer of six cents and finally raised it to eight cents. I do not think Dosco ever made an offer; it was consistent throughout. But I remember very well Mr. Justice Roach giving evidence and using words to this effect: "When they close the books you will have had the final offer." It is a matter of judgment whether you have had it or not. He was then talking about a conference which he was holding in Algoma on July 8. As a matter of fact the evidence discloses that at that very time when Mr. Justice Roach thought he had the final offer, an offer of ten cents was being made here in Ottawa. That is not a criticism of Mr. Justice Roach; he had every reason to believe what he did, but it is difficult to say when you have had the final offer.
I think the minister can perform a useful function without departing from his nonpartisan role. What we want is a vote of the men who are concerned, a secret vote by qualified voters. We are opposed to telegraphed votes and we are opposed to voting deadheads. With that I think the house and country will generally agree. And, rather than the clause as it stands, it occurs to me

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that a clause reading something like this would be more useful: "That a strike vote will be taken under government auspices of members of the bargaining agency and other employees within the bargaining unit who contribute to the maintenance of the bargaining agency." There is a natural desire on the part of the non-union employees, the management, the public and the government to find out how great the sentiment is in favour of the strike. Is the strike desired by the members of the bargaining agency, or is it a mockery for the furtherance of minorities' ambitions? There can be no objection to that, and I certainly have none. My objection is that the present clause is so ambiguous that it becomes highly dangerous, and under it unions will be compelled to fight what may appear to them and may actually be unfair or unjust decisions; they will be forced to fight for their very existence, and they will often be placed in the invidious position of striking against the government, with the result that it may lead to such industrial strife that only two sections in this country will profit, t'he people on the extreme left and the people on the extreme right.


Karl Kenneth Homuth: How would they be striking against the government after a vote?


David Arnold Croll: If a vote were taken and
they continued with their strike they would be striking against the government.


Arthur Leroy Smith: Oh, nonsense, nonsense. The hon. member is too bright to say a thing like that.


David Arnold Croll: Mr. Speaker, my suggestion
is that if the clause is not deleted the minister should make a considered statement as *to his understanding of that particular section. In its present form the section may well be a menace and1 may mine the road to industrial peace.


Humphrey Mitchell: I can do that and I do not think I am a fool. I believe my judgment is just as good as the judgment of the hon. member who has just spoken. I am not going to embarrass a trade union and I am not going to embarrass an employer. What I shall endeavour to do is to be fair, and if both sides are "on- the up and up", if they are playing the game as it should be played-


Karl Kenneth Homuth: You will not need to have a vote.


Humphrey Mitchell: -you will not even have the vote. I do not want to take up too much time, but I can tell the committee lots of things about votes. I have sat in on more disputes than any other man in the country,
and I can tell my hon. friend a lot of things about votes. It is not only the politicians that are accused of stuffing ballot boxes.


Clarence Gillis: Why not give us now your interpretation of clause 6?


David Arnold Croll: The fear I had was that some day in the far distant future the present Minister of Labour may not be Minister of Labour-


Karl Kenneth Homuth: There is no question about that.


David Arnold Croll: -and for that reason-


Ian Alistair Mackenzie: I am glad the hon. gentleman agrees that it is in the far distant future.	.


David Arnold Croll: -I thought it would be in the interests of all concerned if we had a considered statement from the minister. I close by saying this. I think it would be very wise that, in our anxiety to correct what appears to be a badi situation, we do not overreach.


Mr. J. H. BLACKMORE (Lethbridge):: In the steel strike and the other strikes in progress or threatened in Canada we are witnessing a clash between the old order and the new, between the old order of scarcity, of want, and of fear, and the new order of plenty and of freedom from want and fear. On the one side we have the government and the companies striving to force this nation back into the shackles of scarcity; on the other side we have the workers' unions struggling to strike from labour's limbs the age-long fetters of poverty. More specifically, it is a conflict between the labour unions and the government of Canada. In a deeper sense the battle is between the workers on one side and the orthodox financial system on the other, between progress and reaction.
The task assigned your committee was, and I quote from the terms of reference:
to investigate, immediately, all issues connected with and appertaining to the present industrial unrest in Canada.
And again:
and to report their findings and conclusions to the house.
Before proceeding, I should like to join the other members who have spoken in a word of appreciation of the members of the committee. I found the chairman fair and conscientious; I found the steering committee industrious and thorough; I found the members of the committee devoted to their duty and, in very large measure, tolerant and patient. I enjoyed every minute of the long periods we spent together.

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The report of the committee aims to be unbiased, not to take sides. It aims to be judicious, not to aggravate the difficulties, and it aims to be helpful. But. the report falls far short of expectations-the expectations of labour, of industry, of the government and of the country. What the committee did was to hear briefs for labour, for industry, and for the government against granting labour's request, and for the government to show why its machinery for dealing with industrial disputes is adequate.
Without desiring to reflect at all on the steering committee, I may say that, as I review the whole situation, it does look to be a peculiar bill of fare for a committee charged with the responsibility with which this committee was charged.
The committee found an apparently impossible situation. I believe every member of the committee was consciously or unconsciously aware of that fact. We had labour demanding in effect fifteen cents an hour increase and a 40-hour week. We had industry affirming that it cannot or will not pay that amount. We had the government insisting that any wage increase above ten cents will cause inflation. We had this fact; that the 15-cent increase to the steel industry would be taken as a pattern all over the country and would cause demands in every industry for similar increases. We found each increase in wages tending to cause a corresponding increase in the cost of goods and consequently in the cost of living; and each increase in costs of goods tending to force demands for higher wages. This was a situation which I think everybody realized and it caused everybody a measure of frustration. There was this additional truth underlying the whole situation, that if costs of production in Canada were increased too far through wage advances, then two serious results would come about. In the first place, Canadian industries would be unable to sell their goods in Canada in competition with goods of a similar nature coming in from outside, and, in the second place, Canadian industries would be unable to sell their goods in competition with the goods of other countries on the world's markets.
It would be extremely difficult to find more complications for one committee of men to deal with in one month. What could possibly be done to provide a square deal for all? The whole Canadian economy was thus in reality found to be in an economic strait-jacket. No matter how much we produced, men could get no more. As a matter of fact, the more we increased our production in Canada, the more we increased our real wealth,

in all probability the worse would be our poverty. Obviously, something was radically wrong. The committee was not given an opportunity to investigate that which, was wrong or what might be done to correct the strange paradoxes which were discovered to exist, the strange conflicts and contradictions.
The committee failed to do a number of important, things. It failed to get. evidence to support Donald Gordon's contention that an advance of more than ten cents would cause inflation or an increase in the cost of living. I was astounded at the readiness, almost the abject humility with which the committee listened to this man lay down the law to them, accepting him without question. After seeing these same men act in the House of Commons, I found myself at a loss to understand what had happened.
The committee failed to get a clear picture of the situation as regards inflation. Donald Gordon said that an increase of more than ten cents would cause inflation, but we never had clearly defined for us what inflation was. It was never laid down in so many words, and we never demanded that it should be so laid down, that, after all, inflation is only a rise in prices. It was never laid down to us that the ordinary cause of inflation is a shortage of goods. It was implied several times, but never specifically stated. The committee never had given it the causes of inflation. There are three of them; first, the scarcity of goods in relation to the amount of money in circulation in the. hands of the consumer and coming into the markets to buy; second, an increase in costs which will force up the price, and third the manipulation or the writing-up of the price. These causes of inflation ware never laid down definitely before the committee.
The committee never learned, or never had the evidence brought before it, to show the safeguards which might be used against inflation or the remedies for inflation. It was never shown, in any scientific sense, to what extent the causes of inflation are operating in Canada to-day, the extent to which the safeguards against inflation are being employed in Canada, or the extent to which the remedies for inflation are being recognized and used by the Canadian government, or are available to the Canadian government, or could be. made available to the government, or could be used by the government. The result was that the whole concept of inflation was left nebulous.
The committee failed to get evidence to show whether each of the steel companies could, without increasing prices of its products, pay the minimum wage demands of the union.

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We had the statements of the companies, but never an examination in any scientific and thorough way by anybody, by men appointed by the government to do just that thing and give a report to the committee. We never learned exactly what is the financial position of each of the companies, how fat it is, to use a common and rather vulgar expression, how much of the fat the Canadian people have the right to oblige the companies to lose. The committee never had set out before it how much capital is legitimately invested in each company, or how much was put into it; how much of its savings had been reinvested in equipment, how much watered stock is in the capital of each company. I was astonished to find that matters of that sort were never outlined to us in any detail.
We never had brought before us how much yearly profit each company had made, or the average yearly profit over say twenty-five years, which I think is an important matter, or whether or not that rate of profit was reasonable; that is, whether it was enough in comparison w'ith what ought to be reasonable. We never had a standard set before the committee to show what should be the reasonable profit of a company. We never had the question answered, is that profit rate large enough to encourage men of means to invest their money in this industry, or is that profit rate large enough to stimulate the company to optimum production, or is the financial strength of the company all that is required to enable it to compete successfully in the Canadian market against steel coming in from other countries; and then to compete in foreign markets? Until these questions could be answered regarding each company, it was obviously utterly impossible for the members of the committee to form any accurate conception whatsoever as to whether the companies could pay.
The committee failed to get evidence to show whether, under the present financial system, it would be economically feasible for the government to subsidize each of the steel companies sufficiently to enable it to pay increased wage demands without increasing the prices of the product, to subsidize either with money from taxation or with money borrowed. This matter was never canvassed, yet is one which I think was an important issue pertaining to the problem which the committee had to study.
The committee failed to get evidence to show whether or not the wage demands of the steel union are excessive. At present prices in Canada what is the wage required to support a family in health and decency? No evidence whatsoever was submitted. Apparently the government gave no attention to that problem, whereas it would seem.to me that that matter should have been gone into with great care as applied to Hamilton, Sault Ste. Marie and Sydney.
The committee never did get evidence to show whether, under the present financial system, the Canadian economy can stand to nay the union wage demands, financially or physically. Considering the fact that there would be corresponding increases throughout all industry, when we remember the broad terms of the problem submitted to the committee it must be surprising that no such evidence was brought before the committee which was supposed' to examine into all the issues pertaining to the industrial unrest in Canada.
The committee never did get evidence to show whether or not, under the present financial system, it would be practicable to bring down by subsidies the cost of living to the level, say of January 1, 1945. This matter would have had an important bearing upon the wage demands of the union. We never went into that question.
The committee never got evidence to- show whether or not each of these steel companies, namely, Steleo, Algoma and1 Doseo, is essential to the welfare of the Canadian people. It did not get evidence to show whether, and to what extent, the manufacturing of steel for export is essential to the Canadian economy. It failed to get evidence to show whether or not government ownership of these three steel companies and of other companies if necessary would enable the Canadian government to provide the workers with a living standard of decency and health without increasing prices, without impairing production, without jeopardizing the economic and competitive stability of the companies, without curtailing freedom to strike and bargain collectively.
The committee did not get evidence to show whether and to what extent debt-free money created by the state could be safely employed to pay either subsidies requisite for bringing down the cost of living, or wage bonuses to the workers, thereby increasing their incomes without increasing the cost of producing steel. Certainly this would be an important issue pertaining to the whole problem of industrial unrest in Canada. Lacking information as regards each of these important issues which I have mentioned, connected with and as pertaining to the steel strike as a manifestation of the present industrial unrest in Canada the committee, I submit, failed to report conclusions upon the matters of wage rates and hours of labour, the

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two vital bones of contention in the whole struggle. This fact I think must be looked upon as being surprising.
When the committee commenced its operations I believe everybody realized that the two vital questions being asked were whether we could grant wage increases in the amount demanded and whether we could give the workers hours of labour which they requested. Tet we made no report bearing on either one of these essential matters, largely because we failed to get the evidence which would have enabled us to form a sound opinion upon these two most important matters.
We found, Mr. Speaker, that the problem was exceedingly grave, as I have already indicated.


Solon Earl Low: Mr. Speaker, on a point of order, I do not think it should be necessary for an hon. member to rise and ask for the courtesy of a decent hearing for an hon. member who is speaking. This thing has gone on so long that it gets under my skin, and I ask that you call order.


John Horne Blackmore: From the amount of talking that is going on in and around the chamber one would think hon. members were not the slightest bit concerned about this strike, or that they assume that hon. members of this group know absolutely nothing about it, notwithstanding the fact that they themselves do not know what in the world to do with this problem. If anyone can imagine a more grotesque situation than that I should be glad to have him call me up some morning and tell me about it.


Arthur Leroy Smith: Don't two of you jump on us; one is enough.


John Horne Blackmore: That is good: I hope it will not become necessary again. It is an easy matter just to start talking, you know, and make it absolutely impossible for an hon. member to be heard even by those who wish to hear him.
The gravity of the problem, Mr. Speaker, becomes manifest when you consider the psychology which is abroad in the country at the present time. There is a dangerous psychology on all sides. First, with respect to labour, the present labour leaders in Canada have seen strange things in this glorious country of ours. Let us not forget for a moment that these memories have been in their minds all through this struggle. After the first world war, in the twenties, the labouring people saw a period of almost unprecedented prosperity in Canada. Trade was buoyant; production was bountiful; credit was relatively easy to

get. But the incomes of the great rank and file of the Canadian people were meagre; they were shamefully low.
Then suddenly in. 1928 and 1929 something happened. Then came the baffling thirties. All the farms, the forests, the mines, the fisheries and the factories were still in Canada. All the splendid people of Canada were still in this country; skilful, ambitious, industrious, patriotic, patient and cooperative; the same people who eagerly produced and gloriously fought in world war I; the same people who within ten years were to dazzle the world with their magnificent production for world war II and their splendid and heroic striking impact wherever they found1 the foe.
All through the terrible thirties, I say, these great resources were in Canada; the same Canadian people were present in Canada; the warehouses were bulging; Canadian store shelves were sagging with goods. Yet Canadian industries stood half idle; Canadian workers, yearning for work, languished in idleness or rode the rods or camped on the roadside, while a Liberal member of parliament honoured the men who were to become the heroes of Dieppe, of Sicily, of Ortona, of the Falaise Gap by styling them "spineless yaps and street-corner bums."
Canadian misery was widespread. "There is no money" was the plea in parliament and press, on platforms and in the offices of bank managers. The cry was repeated and reiterated dismally, " There is no money."
Then suddenly war broke out. Money soon was everywhere. It sprang up like grass blades in the spring. Whereas previously we had spoken of a .million dollars with considerable respect, if not reverence, we now began talking and thinking glibly of billions; billions for tanks, aeroplanes, ships; billions for guns and gasoline; billions for pork and eggs; billions to lend abroad or give away. Government officials and cabinet ministers declared sternly that what was physically possible would be made financially possible. The only factors limiting our war effort were to be materials and man-power.
By 1944, though more than one million of our finest producers were overseas fighting, Canada was able to produce an almost stupendous quantity of tanks, aeroplanes, guns, ships and so on; of food, clothing and other necessities with which to supply our fighting and auxiliary forces; food and supplies to provide for our allies; food and clothing for ourselves, to provide the people at home with a higher standard of living than they ever enjoyed before in history.
Now labour and all thoughtful citizens in Canada want to know; is our Canadian peace

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effort to be as successful as was our war effort? Is our peace effort, as was our war effort, to be conducted upon the principle that what is physically possible will be made financially possible? And if not, why not?
This question is in the minds of the labouring men all over this country, and the whole situation causes a dangerous psychological setup. Already labour has been told that the Canadian Liberal government cannot afford money for the payment of subsidies to keep down the price of milk for the poor man's family, to keep down the prices of jams, jellies, corn syrup, corn starch, raisins, prunes and other vital commodities for his table; to keep down the price of clothes for himself or his children.


Ian Alistair Mackenzie: Two hundred million dollars for it.


John Horne Blackmore: The hon. member will have plenty of opportunity to talk when I am finished, but then he will not feel like talking. We cannot find money for anything to help the poor, struggling Canadians who fought or who gave sons to fight; who paid the taxes; who toiled at the wheels. Already men in high places are beginning to think, and soon will begin to say, "There is no money." Common sense clearly tells us that in that direction lies depression, misery and black despair. If anyone supposes that this sort of thinking is not in the mind of practically every labouring man in Canada, then he needs to learn what is in the minds of the labouring men; he needs to get ::hem talking. We experienced poverty in the midst of plenty in the hungry thirties. Are we being led toward an even more hopeless poverty in even more hungry fifties? And shall we, as Canadians, tamely submit to this sort of thing?
With respect to the psychology in industry; the industries of this country themselves, the very industries which are now struggling against labour, saw depression. They saw overproduction; they saw lack of markets; they saw their factories partly idle; they saw increased overhead, and by reason of that fact they sustained losses. Now they see the repetition of that depression coming, in which there will be shortage of purchasing power and failure of markets both at home and abroad. They see productive capacity greatly increased; then they see taxation very burdensome already, and their troubles increasing.


Thomas Vincent Grant: Can't they sell post cards?


John Horne Blackmore: Now they are full of fear for the future. This was made abundantly clear, I believe, by each of their representatives who appeared before the committee.


Thomas Vincent Grant: Good money in post cards.


John Horne Blackmore: Yes; you are deeply interested in solving the problems of the nation; wonderfully interested!
Now, as to the people of Canada as a whole, from coast to coast; they also fear the future. They fear unemployment; they fear depression; they fear an increased cost of living; they fear ruinous taxation which they are now enduring and by which they are being crushed. They fear painful shortages. This is the psychology obtaining throughout Canada; this is the background against which this strike struggle is being carried on.
There simply must be a solution which will be a real solution, not a return to former ways of doing things. Public feeling is running high. There may be grave disorders. There is economic necessity for a solution different from anything we have had before. I am going to quote a passage from the report of the Bank of Canada for 1944, by Graham Towers. This passage indicates quite clearly that the writer saw there would have to be great changes, but we see no evidence of any contemplation of such great changes by the present government. This is one of the things which distress and dishearten the people as a whole. I quote from page 12:
It seems likely, however, that at least 4,700,000 workers will be available for employment in civilian jobs, or at least 1,500,000 more than the number employed in that sector of the economy at the present time. A working force of this size, at present rates of efficiency, will be able to produce a vastly greater volume of civilian goods and services than Canada has ever known before.
Is it to be supposed, I interpolate, that industry does not realize that?
By the same token, a vastly increased volume of consumption and capital development will be necessary if this output is going to be fully absorbed and high employment maintained. The adjustments required will clearly be of unprecedented magnitude, and bold planning on the part of labour, farm and business organizations, as well as governments, is urgently needed.
There is a warning of extremely great portent, That was in 1944, but there appears no inclination, and there appeared to be no inclination before the committee to take into consideration matters of that kind.
May I turn to another set of figures at page 9 of Graham Towers' Bank of Canada Report of 1946. A set of figures is given there which indicates the tremendous productive power of Canada. In 1944 she produced $11-8 billion worth of goods and services, and in 1945 $11-4 billion worth. All such amounts of goods and services must be purchased in the post-war years somehow or another. The government spent in 1944 $5-4 billion on those goods and
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services, and shipped them away to be wasted. And in 1945 the government spent $4-5 billion.
This vast expenditure will fall off, now that the war is over. What is going to take the place of that purchasing power in the Canadian economy to absorb Canadian goods? Any thoughtful person will ask that question with great apprehension. The people of .Canada, because of the war incomes they were enjoying in 1944 spent $6-2 billion, and in 1945 they spent $6-5 billion, whereas in 1938 the poor, unfortunate Canadian people were able to spend only 83-7 billion. We are rapidly returning to the 1938 position, as the economic incidence of war is falling off.
Now the question arises: What is going to happen with all this tremendous production? One of the men representing industry definitely referred to that three or four times in his evidence-the anxiety he felt regarding the future.
It is a well known fact that the Canadian income in 1941 was exceedingly low. I have already put on record twice this year evidence to sho.w that in the year preceding June 2, 1941, for all Canada 32-9 per cent of Canadian wage-earners were receiving S450 a year or less; 28-7 per cent received between 8450 and 8949 yearly, and 91-5 per cent of the total Canadian population received less than $1,950 a year.
It must be obvious to anyone that some tremendous measure must be taken, to replace the purchasing power which evidently is going to fall off. What is being done? This whole matter was actually part of the problem!. It should have had scrutinizing attention from the committee.
May I offer what would have been the Social Credit proposals, if the Social Credit group had been making recommendations to parliament. We would have recommended, first, that Mr. Millard's wage offer to Mr. Brockington was fair and reasonable. I believe practically everyone agrees with that.
We would have recommended, second, that the government should reopen the plants at once oni the basis of Mr. Millard's offer.
In reopening the plants the government should adopt those requisite measures which might appear best calculated (1) to avoid further price increases in Canada and1 (2) to avoid impairment of the economic stability of the steel companies.
We would have recommended, third, that the government should immediately begin to take all necessary steps to reduce the Canadian cost of living with the objective of bringing that cost of living back to .the level prevailing

on January 1, 1945. That objective should be attained not later than January 1, 1947, and, if possible, by November 1, 1946.
Fourth, the money necessary to implement these recommendations, the government should obtain by a series of "win the peace" victory loans, the first of the "win the peace" victory loans to be offered in the fall of 1946.
Fifth, the government should appoint a royal commission on industrial relations to examine into each of the issues the committee failed to investigate.
The royal commission should study with care the many issues the committee ought to have studied in order to be able to make an intelligent report on the whole of industrial unrest throughout Canada.
The reasons for the recommendations I have mentioned are these:
First, Mr. Millard's wage offer to Mr. Brockington was not excessive. Canadian industry can produce enough goods to provide a standard of living for Canadians consistent with such an income as this wage rate would allow. This wage will do very little more than give health and decency to workers. Workers ought to be able to save. Canadian producers need more purchasing power in the hands of consumers to supply the producers of Canada with home markets.
The government should reopen the plants on the basis of Mr. Millard's offer to Mr. Brockington, because production in Canada has already been far too much impaired1. The loss we have already sustained in the Canadian economy is almost irreparable. Confidence among both employers and employees in Canada ought to be restored at the earliest possible moment, and the government ought to lead the way into the new order of abundance..
All during the war we heard talk about the new order that was to be. Even on one occasion the Prime Minister (Mr. Mackenzie King) waxed' enthusiastic and talked about a new heaven and a new earth. Why in the world does he not come to grips with our economic problems, and lead the way into that new order? Why do his ministers stand as blocks in the way, while labour has to struggle and risk its all in order to force the government into something like a progressive policy? That is a question any ordinary man would ask. The government ought to lead the way.
In reopening the plants it should adopt measures which will avoid price increases. The wage increases could be given as a government bonus, which would' not enhance costs of production. Failing that, the government could subsidize plants to enable them to absorb costs of wage increases.

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Arthur Leroy Smith: Will the hon. member permit a question?


John Horne Blackmore: If I had more time I would be happy to answer any questions.


Arthur Leroy Smith: I am sorry to have interrupted.


John Horne Blackmore: I wonder if the hon. member would ask his questions when the estimates of the Department of Labour are before the committee, and we will take them up then.


Arthur Leroy Smith: I gather the hon. member does not permit a question; is that right?


John Horne Blackmore: Go ahead.


Arthur Leroy Smith: The hon.
member is talking about subsidizing industry. He would go so far as to say that to hold prices he would subsidize all industry in Canada.


John Horne Blackmore: If it should be found necessary. But if the hon. member will wait until I have finished what I have to say, he will see where this money is coming from.


Some hon. MEMBERS:: Oh, oh!


Arthur Leroy Smith: May I say I did not intend to be rude; I was just looking for information.


John Horne Blackmore: I understand that, fully. I wish to say now that hon. members all over the house laugh at any talk about where the money will come from. Mr. Speaker, some new principle must be discovered or this nation is going to economic chaos. It must be obvious to every hon. member that those who laugh at the proposal we Social Crediters make do not understand it; but they have no possible solution of their own. That is the amazing thing one sees in this day in 1946. If hon. members would just listen a little bit, and not be so cocksure that they know everything. it would be better for them.


Arthur Leroy Smith: I have been listening.


John Horne Blackmore: That is right; I am not singling out any man. It is easy enough to laugh at someone who is outlining something which people do not understand. But let me tell you, that they will laugh on the ether sides of their faces if we do not get this problem solved in due time. There will be no laughing matter about that.
Measures resembling the two I mentioned before interruption, financed ultimately with state-created, debt-free money would enable, industry to pay living wages, without adding to the costs to the consumer.
Provided that Canadian production were first stimulated to a point at which needs of Canadians were supplied, the increased amount of money resulting from these measures would not cause inflation through scarcity of goods and services. This is the only genuine, legitimate cause of inflation. All the talk about funny money and rubber money, and all that other contemptible nonsense we hear in the house and in the country has no foundation at all either in logic or in reason. Let men take the pains to get the economic facts into their minds, and form their policies on the basis of those facts. The government could bring down the cost of living to the January 1, 1945, level by subsidizing the prices -of certain key products. The withdrawal of government subsidies on certain commodities caused or permitted the rise in prices that resulted in mounting living costs in Canada. The opposite process obviously would reduce living costs. Therefore, to speak of bringing back by subsidies, the cost of living to the standard of January 1, 1945, is not fantastic.
Money for the present should be raised by "win the peace" victory loans because production in Canada is at a low level. Consequently state-created debt-free money could not be used at the present time without inflation because there is a shortage of goods. Canadian supply is too low to meet the needs of Canadians. There appears to be already in the hands of the consumers more money than there are goods and services to buy with that money. This means that there would be an inflationary tendency owing to scarcity of goods.
Scarcity of goods must be overcome. Production must become buoyant, abundant and universal in all our industries. The time will then come when there will be more goods in the markets than there will be money in consumers' hands to buy. Then the state will be able safely to create debt-free money to represent the surplus production. Such debt-free money, will then be available to the government to pay subsidies and bonuses to maintain stable and equitable prices and to maintain stable and equitable wages. But industries must go into action immediately. Social Crediters would advocate debt-free money under normal circumstances in Canada but we suggest that debt money be used now, because of shortage of goods and because the people of Canada generally do not understand enough about money to welcome debt-free money. We must tide over the present crisis.
A royal commission ought to be appointed to learn for Canada all the essential facts about our economic and financial system and learn
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what possible measures can be taken to reform our economic and financial system so that we may be able to go into a new order of abundance. Let a royal commission discover for us the means of ushering in and establishing a new order of plenty for our Canada, a land of plenty in this age of plenty.
Social Crediters earnestly suggest that a way out of our industrial unrest can be found; it has been found. Social Crediters are confident that there is a way by which we can bring into being a new order of abundance and freedom, freedom from want, fear and curtailment of our personal liberties. Social Crediters urge in all sincerity that the road to the new order of abundance and freedom can be found through the applications of the principles and the technique of Social Credit. Let Social Credit point the way.
I say to members of the house who have desired to question me that this matter will come up again when we are discussing the estimates of the Department of Labour if all goes well. I can and will then answer all questions which hon. members may wish to ask pertaining to the principles, the technique and the philosophy of Social Credit and point out how those principles may be applied to the problem which confronts us.


Mr. J. A. CHARLTON (Brant):: 
James Horace King: Order. I would ask hon. members not to speak so loudly. The hon. member who has the floor should not be disturbed.


John Alpheus Charlton: Thank you, Mr. Speaker.
It was, indeed, a sad day for Canada when that union was in force, much too sad to be passed over now as "unutterable nonsense."
On February 9, 1945, there appeared in the Toronto Globe and Mail the following:
Buck explains why minister beaten
Tim Buck, national leader of the Labour-Progressive party, issued a statement yesterday-attributing defence minister MeNaughton's defeat in the Grey North federal by-election Monday to "reactionary Toryism, helped by the suicidal policy of the C.C.F."
Mr. Buck's statement said:
"Only cooperation between the forces of labour and the progressive Liberals can stop the Tory offensive, and appealed to all progressive people and especially honest supporters of the C.C.F. to condemn the policies which are bringing Canada to the brink of disaster."
On March 9. 1945, there appeared in the Toronto Telegram an editorial which I quote in part, as follows:
L.P. Party's Election Manager Becomes a Canadian at Last.
Word comes from Ottawa that departmental action has been taken to relieve the Labour-Progressive party of the embarrassment of having as its national election manager a man who is not a Canadian. Naturalization papers have been issued to Samuel Carr who has been national organizer for the party. Apparently not a little pressure was necessary to secure this change in status, as vain efforts to obtain naturalization have been made on his behalf through the past fifteen years. Labour-Progressive cooperation with the Liberals in North Grey may have helped in procuring naturalization on the eve of the approaching general elections . . .
Now, at long last, Mr. Carr has become by official decree, a Canadian citizen in good standing. He lias his papers, signed and sealed at Ottawa, to prove it . . .
In the Winnipeg Free Press of June .6, 1944, appeared the following:
Buck makes offer to Premier King
Tim Buck, Labour-Progressive leader, said yesterday in an interview that his recent invitation to Prime Minister Mackenzie King to join forces with his party has been misunderstood.
He said he had "intimated" to Mr. King that after the next general election he "might have the support of the Labour-Progressives.
"I merely suggested to him," added Mr. Buck, "that if his legislation become liberalized-and spell that with a small T-that if he played down our alley now we might throw our weight his way when the House of Commons is split many ways after the next election."
Commenting later on Mr. Buck's remarks, A. G. McLean, director of the National Liberal confederation, said the Liberal party "welcomes cooperation from everyone in Canada in putting into effect Liberal principles and policies because we are sure these policies are the only real answer to the problems which face Canada and the whole world and to the problems which will face us in the future."
Now we see in the papers that the leader of the C.C.F. socialist party-


An hon. MEMBER:: What has this to do with the committee's report?


John Alpheus Charlton: -has been offered the leadership of the Liberal party. Is this just another carrot on a stick, or could we assume the old adage is correct (hat where there is

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smoke there must be a little fire? There must be some truth in what we hear and see, because the Ottawa Journal, on August 15 of this year, contains an editorial under the heading:
Mr. Coldwell does lead them
Mr. M. J. Coldwell, C.C.F. chieftain, yesterday came out with this:
"It is true that over the past eighteen months approaches have been made several times to me with the suggestion that I should consider accepting the leadership of the Liberal party or of a Liberal-C.C.F. coalition . . .
Mr. TOWNLEY-SMITH: What has that to do with the committee's report?


James Horace King: I am sorry to interrupt the hon. member, but he is out of order, in that he is not dealing with the question which is before the house.	[DOT]


Mr. LENNARD:: It has more to do with it than most people think.


John Alpheus Charlton: Mr. Coldwell's statement as quoted in the editorial continues:
"-but I have always stated explicitly that I would neither consider nor approve it."
Well, why should Mr. Coldwell consider it?


Alexander Malcolm Nicholson: Mr. Speaker, I understood that you gave a ruling that this material is irrelevant to the matter before the house.


James Horace King: I would call to the attention of the hon. member that the motion before the house is:
That the second report of the committee on industrial relations, presented on Saturday, August 17, 1946, be now concurred in.
I would ask him to confine his remarks to the motion which is before the house.


John Alpheus Charlton: I was merely trying to show the house that communism has a great deal to do with the present industrial labour unrest.


Alexander Malcolm Nicholson: Has it something to do with the steel strike in Hamilton?


John Alpheus Charlton: I said, strikes in general in this country.


Karl Kenneth Homuth: What would the hon.
member for Mackenzie (Mr. Nicholson) say? Let him answer his own question.


John Alpheus Charlton: 
James Horace King: Order. I have given
great' latitude to the hon. member, but I would ask him to confine his remarks to the motion before the house. If he does not do so I shall be obliged to ask him to resume his seat.


John Alpheus Charlton: There was a great deal said in this house this morning concerning this very thing, and I do not think it had any more relation to the question on the order paper.
At least we have heard nothing to the contrary from the government either officially or otherwise, therefore we must assume that these reports are correct.


Alexander Malcolm Nicholson: Reports on what?
Mr. ST. LAURENT: It is a pretty big assumption.


John Alpheus Charlton: If the hon. member for Mackenzie had not been interrupting so much he would have heard it.
How far will this Liberal tentacle reach out to satisfy its demand for complete control?
This government has had no definite labour policy. If the present laws are not satisfactory, then they should be rescinded. If they are satisfactory, they should be enforced. It would seem that no one in the government has courage enough, or if they have the courage, they are not allowed to say what they really think, or to state a definite policy and stick to it.
The people want leadership, sane, sensible leadership, but it is not forthcoming from the government. So they accept the leadership of radicals and communists who make all kinds of ridiculous promises to the workers but have no responsibility. No doctor can cure a condition by simply treating symptoms. He must find the cause. Likewise, no government can cure the present economic conditions by merely salving over wounds. Too much thought is given to votes-more salve for the open wound, where actually some surgery is required to close the wound.
In recent years labour has accomplished much in the way of improved wages and working conditions, which I believe just and right. But let us compare this with the position of agriculture. Taking 1913 as the base period, when industrial labour and agriculture were equal at 100, the position of labour as of 1945 was approximately 264 while agriculture stood at approximately 162, or a difference of 102 points. I quote from the Searle index:

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A bushel of Canadian wheat to-day, according to the records of the Searle Index has a purchasing power over the things that farmers have to buy for their living and production of only eight per cent more than it had in 1913, whereas the hourly wages of Canadian industrial labour have a purchasing power to-day of 64 per cent more than these same wages had in 1913. Why then, we ask, should not our farmers enjoy the fruits of this increase in the Canadian standard of living that has been brought about by Canada's natural economic progress since 1913, and which increased standard of living is enjoyed by Canadian industrial labour and by many other groups of individuals? In considering all these prices, it is to be remembered that the Canadian dollar of to-day has only the same purchasing power over the things that farmers have to buy as 62 cents had in 1913.	*
This condition cannot go on. There must be some reasonable equalization, or agriculture will fail to produce and money will mean very little if the necessities of life are not available in sufficient quantities to supply the needs of the people.
Thousands of farmers left their farms to work in industry during the war. They found it easier, fewer working hours, less responsibility, workmen's compensation, unemployment insurance and city conveniences in their homes. But they must eat, and with this added burden of production on fewer farms, and with the cost of production rising steadily, agriculture finds it more difficult to carry on.
I think I can safely say that as far as agriculture is concerned the present demand by labour for a 40-hour week is the breaking point. I am not saying that labour is not entitled to a 40-hour week, but I do say that agriculture cannot compete in the labour market at that figure. It would either require the farmer or his family to do more of the work or put on two shifts, which would increase considerably his cost of production. With price control in effect, agriculture must come to this government for an increase in the price of farm products. This in turn increases the cost of living and labour demands higher wages. In order to meet these demands, industry feels it should have more for its product, and round and round we go; where we stop nobody knows.
I see logic in labour asking a one-cent increase in wages per hour for every one point of rise in the cost of living index, but Mr. Millard, in answer to a question in the committee, did not seem willing to allow wages to go down in the same proportion if the cost of living index went down. He likened it to an insurance policy, but there was no mention of premium payment. If price control is to be continued until we get past the point of dangerous inflation, then everyone must be prepared to sacrifice a little for the sake of
Canada and our future. We must plan ahead, not stumble blindly along thinking only of the present.
While I recognize the right of every worker to join the organization of his choice, I also believe in the right of every worker to abstain from joining any organization or to retire if he is a member and if that be his wish. I cannot agree to the view that the right of any individual to earn a living must be dependent upon the payment of dues to any organization. A trade union should see that its leadership and union activities are such that every worker wants to belong. Collective bargaining will never fulfil the hopes held out for it, nor will there be stability in labour relations unless increased right afforded labour is accompanied by the assumption of increased responsibilities, and unless there exists mutual confidence between the parties that an agreement once entered into will be honoured.
Strike action to date has lost for Canada millions of dollars' worth of export contracts. It is clearly the responsibility of the government to settle it. This can be done if our national leaders have the will and the courage to face the problem fairly and fearlessly.


Clarence Decatur Howe: Mr. Speaker, I rise to take part in this debate by reason of my own special interest in restoring industrial peace to Canada. I had taken on the obligation as Minister of Reconstruction which seemed onerous at the start but which became impossible during the last six weeks when labour unrest came to the boiling point.
Let me say that the committee that has been studjdng the labour situation has been, in my opinion, well worth while. I am not going to give a review of the work of the committee. That was done in a manner both brilliant and accurate by the hon. member for Calgary West (Mr. Smith). I want to say I think the members of the committee have a better understanding of the calibre of labour leadership in Canada through hearing the labour leaders that appeared before them, and perhaps a better understanding of the calibre of industrial leadership from the few representatives of industry whom they heard.
I believe there is one thing that struck every member of the committee, and that is that of the labour difficulties which were reviewed by them, all had failed to follow established procedure of government for the settlement of disputes, and everyone of them had to be rated as an illegal strike. Another thing which I think must have impressed itself on the committee was the obstacles put in the path of any possible settlement of the steel strike. That was not an ordinary dispute
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between, employer and employees. It was converted into a dispute among several employees, all with different types of production and different financial problems, andi groups of workers in several industries, many of which were quite dissimilar from other groups involved in the dispute. The demand was that all be settled by a common formula.
It was quite impossible for any of the principals in the dispute to settle with their workers by bilateral bargaining. That was obvious. For example, if Steleo had wished to settle its dispute with its employees it was quite unable to do so unless by some means clearly beyond its powTer it was able to induce Dosco- to settle on another formula with its employees and to induce Algoma ,to do the same. It was obviously a dispute directed toward- the government, for only by the exercise of arbitrary powers by the government could the many factors in the dispute be resolved. The dispute was not even confined to basic steel. The problems of basic steel have some resemblance as between one plant and another, though even in basic steel the products turned out by Algoma are not the products turned out by S-telco, and the products turned out by both are not wholly the products turned out by Dosco. But it went far beyond that, because the settlement of the dispute depended not only on the settlement of these three disputes, but the terms of settlement were required to apply for all the subsidiaries of all three companies.
Arguments were -used about the hardships of the work in front of a blast furnace, but I personally was unable to follow the logic which said that because the worker at the blast furnace is entitled to high -pay, the operator of the tack machine in a subsidiary plant is entitled to the same pay. I simply mention that to show the complications facing anyone who undertook to find a solution of the steel strike in any single plant based on the demands of the bargaining agency of the workers. However, we heard evidence from the labour leaders involved not only in the steel strike but also in the rubber strike, the automobile strike, the chemical strike and the strike in the electrical industries. We all got a view of the leaders; we heard the presentation of their cases. I think we all formed an opinion as to whether labour in Canada is being wisely led in one industry as against another, and we got a fair idea of the problems of management in dealing with its workers under present-day conditions.
In the steel strike we -were faced with a situation which was unique. The wartime prices and trade board had recognized that

it was unable to hold the line which had been established in February of 1944 and which had been maintained up to May or June of this year. The pressures had become too great; too many forces over which the wartime prices and trade board had no control were operating to bring further pressure on the price ceiling. Canada is a heavy importer of goods, particularly from the United States. In the United States a substantial increase in prices had occurred which was reflecting itself on manufacturing costs in Canada. _ It has usually been the practice of the wartime prices and trade board to deal with price increases based on proven costs; in other words; the costs must be established first, presented to the wartime prices and trade board, and price adjustments, if considered necessary by the board, are made in the light of proven cost figures. However, when the steel adjustment came along-and the price of steel had not been materially changed except in a few items since 1939-it was realized that an adjustment of wages was imminent. The wartime prices and trade board could not ignore the wage increases in the United States; nor could it ignore the fact that substantial adjustments were being made in other industries in Canada and would be demanded in the case of steel. Therefore, in making an adjustment of steel prices they made an allowance for wage increases.
The committee heard Mr. Donald Gordon on price stabilization and the effect of wage increases on that problem. I think every member of the committee was- profoundly impressed by Mr. Gordon's evidence. However, it did emerge that the price allowances which were made when steel prices were adjusted amounted to about ten cents an hour on labour costs, as nearly as the board could determine. I wish to say again that that determination could not be accurate because the costs vary in the case of different steel producers. However, I think members of the committee came to the opinion that a wage increase of ten cents was about all the increase in steel prices permitted. Was that a reasonable increase? The view has been taken that it amounted to nothing much at all. After all, a ten-cent increase in steel across the board is fairly substantial in percentages, particularly as it applies to the lower paid workers. I presume that over the average it- amounted to somewhere between twelve and fifteen per cent across the board, and in the case of low paid workers it amounted to considerably more than that. It was considered reasonable, through the fact that a good many settlements had been made or were being made currently on that basis. Great industries such as the pulp and paper

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industry of eastern. Canada, the forest industries of eastern Canada and the great nickel industry had been settled on the basis of ten cents an hour across the iboard. Therefore management, in presenting its claim to the wartime prices and trade board and the wartime prices and trade board in assessing that claim, could reasonably forecast an increase of ten cents an hour for labour in basic steel.
A good deal of pressure was brought on Mr. Gordon by members of the committee to fix that allowance exactly. Under pressure, Mr. Gordon admitted that ten cents an hour was about the figure that the wartime prices and trade board had in mind. But he also tried to convey the opinion that price and wage stabilization is not an exact science.
Canada has been more successful than any other country in holding down its cost of living and in stabilizing its wages; but it differs from certain other countries in that it has not proceeded by exact formula. In the United States the Little Steel formula was regarded as the formula by which permissible wage increases could be determined. It was a complicated formula. One factor was the date and the amount of the last increase in pay; the cost of living was an element in the formula, and there were certain other elements. However, we all recall that while the Little Steel formula remained the standard for some months, it had to give way under pressures which even that exact formula could not stand.
From the commencement, Canada did not attempt to place wage control under price control. It set up two stabilization boards, one for prices and the other for wages. The intention was that the board in charge of the regulation of wages would make such adjustments in wages as were indicated. The board could not start from a standard base, because everyone did not enjoy the same wage or even the same relative wage in one industry as in another. But that wage board was authorized to make wage adjustments. The wartime prices and trade board had a somewhat secondary position, because it was its duty to make price adjustments which would take account of costs arising out of wage adjustments. The relationship was not as close as certain hon. members of the committee thought should have been the case, but all I can say is that throughout the war period this dual system of control seemed to work and each in its own sphere did a job in stabilizing the commodity under its charge.
Under pressure, Mr. Gordon stated that ten cents was the limit he believed the price index could absorb and still be kept under control.
I suppose, if Mr. Gordon had been subjected to close cross-examination he would not have
been able to prove that this figure should not have been nine cents or eight cents or possibly eleven cents. However, he was giving his expert opinion as to what he considered to be the breaking point in setting the level of a general wage increase across Canada. I know of no better expert opinion. After all, Mr. Gordon has been in charge of price control since its inception. He had a magnificent record of service before coming to that position, and I think every Canadian citizen will say he has carried on magnificently since taking over that task. It is all very well to say he did not prove his point. I do not think he attempted to prove his point. I think he attempted to give the committee his best judgment, based upon his experience and upon the facts before him, which certainly were more complete than the facts before anyone else on that committee. In any event, the committee in its wisdom decided that it could not overrule Mr. Gordon's judgment.
The committee was not directly charged with the duty of settling the steel strike. However, it felt that this strike was the basic labour problem of the moment, and undertook to do what could be done in that direction. Therefore the committee chose a conciliator of its own to supersede the former government conciliator, and asked Mr. Brockington to bring the parties to the dispute together and attempt to arrive at a solution. I think the committee felt that Mr. Brockington did all that could be done in attempting to reach a compromise settlement. His difficulty was that, before he entered upon his task, management had stated to the committee its maximum offer and labour had stated to the committee its minimum terms, and there was a wide discrepancy between the two. However, Mr. Brockington worked with management and with labour for several days and worked out a compromise settlement which I think members of the committee felt could have been accepted by either side. However, while he drew slight concessions from management and slight concessions from labour, the gap was too wide to bridge and Mr. Brockington had to report that he could usefully offer no further services in settling the dispute.
It has been said during this debate that the dispute could have been settled for five cents. That is, ten cents was ordered by the controller ; it was already in effect, and it has been said here that an additional five cents paid at some time in the future would have settled the dispute. Well, I suggest that if hon. members will read Mr. Millard's offer they will find many other conditions involved besides the five cents, which would have been an obstacle to any settlement. For example, there
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were three "musts". First was the removal of the Sydney five-eent differential. The question of the removal of that five-cent differential has been before the regional board and the national labour board and has been refused by both. To make that a "must" in settling any dispute with the Steel Company of Canada is, of course, to put an insuperable obstacle in the way of any settlement.


Clarence Gillis: It should have been removed two years ago.


Clarence Decatur Howe: Perhaps so; nevertheless it had nothing to do with Stelco.


Clarence Gillis: I do not think it has anything to do with the present dispute; it is still before the national board.


Clarence Decatur Howe: Exactly; nevertheless it has been made a "must". The hon. gentleman -proves my point, as I am sure he intended to do. Then the general wage increase was to be made retroactive. That was agreed to without difficulty; that is obviously fair, and management accepted it as such. Then there was the adjustment of 5i cents. That was a "must"; and the only condition that could be arbitrated was the time at which that adjustment would be applied during the current calendar year. Several items were referred to arbitration. I simply mention the extraneous matters that were brought into a dispute, which would have been difficult enough had each company been bargaining with the union separately on behalf of its own employees, and which became practically impossible of solution when no management was free to bargain with its own employees without also bringing about bargains between other managements over which it had no control and other employees over which it also had no control.
I believe the committee brought forth recommendations that will be helpful in future in dealing with labour matters. I believe we were all surprised at the unanimity which prevailed during the in camera sessions of the committee. I will say that during the course of the proceedings of the committee I do not think any member made any move designed to improve his political position. In listening to this debate, I consider it regrettable that many hon. members should talk politics rather than talk a settlement of labour disputes. I hope we can bring the debate back to the high plane of the discussions in committee, as we proceed with this matter. As I say, we attained a high degree of unanimity except with respect to recommendation No. 6. It did not seem to me there was a great area for disagreement

in regard to that recommendation. Its purpose was to prevent sporadic strikes, strikes not brought about through the use of normal union machinery, but brought about by small groups acting without notice to the vast body of the workers.


Angus MacInnis: It does not say that.


Clarence Decatur Howe: No, but I think my hon.
friend will agree that was stated to be the purpose. As to the methods of arriving at the purpose, the hon. member for Vancouver East (Mr. Maclnnis) had one method and other members of the committee had another. The other method happened to be chosen. The provision is simpiy this, that if a strike is threatened, or if there is a sudden outbreak of a strike, either side in the dispute may apply to the Minister of Labour for a vote, imder government auspices. The Minister of Labour is not bound to take that vote, the proviso being that at his discretion he may order a vote under government auspices.
It has been said, as it was said in committee-and quite properly-that if the present Minister of Labour (Mr. Mitchell) were always to be Minister of Labour, that would not be a dangerous weapon. But let me suggest this, that the Department of Labour in this country is staffed by experienced labour men. I believe any Minister of Labour would ask the advice of his experienced advisers as to whether in a particular dispute they considered it advisable that a government-supervised vote be taken. Should the Minister of Labour decide that the majority of the employees were being dragooned into a strike through illegal action on the part of certain of their leaders, or a certain group in the industry, there is the possibility of the Department of Labour's stepping in and deciding the question as to whether or not a vote should be held, under democratic methods, and either authorizing such strike as legal, or denoimcing it as an illegal strike.
I believe that is a constructive paragraph in the report, and is a paragraph which will not be abused. I must say I find myself unable to follow the argument which says that it is destructive to properly conducted and properly organized labour unions.
Meantime, while the committee was sitting, strikes in a number of basic industries were in progress. Not only have they paralyzed industries directly affected, but they are extendihg to industries not directly associated with any labour dispute. That situation is most acute at this moment. There is scarcely a section of the country which is not beginning to be affected by these strikes.

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It seems to me that a situation can get so bad that it becomes impossible, and I believe this situation has reached that point. I believe there must be an early solution-


John Ritchie MacNicol: What did the minister say on that point?


Clarence Decatur Howe: It gets so bad that it is impossible to perpetuate itself. I believe that these strikes are nearing the point when they will either solve themselves or be capable of solution. I believe the work of the committee has contributed toward bringing about that situation, and I can assure the Minister of Labour that anything I can do, as Minister of Reconstruction and Supply to assist in bringing these strikes to an early conclusion will be done.


Mr. C. C. I. MERRITT (Vancouver-Burrard):: Mr. Speaker, as one of the members of the committee I want at the outset to say that I consider the committee to have been of great value to parliament and to the country. Some hon. members, particularly the hon. member for Vancouver East (Mr. Mac-Innis), have criticized its results, and have stated that the committee's report is an anticlimax. I say to him that in my opinion it is anything but that. There are many forwardlooking recommendations made in the report of the committee. Although I join with him in regretting that the committee was not able to settle the steel strike-even though it was never charged with the duty of settling that strike-I do not think he can say that the concrete fact that no settlement was achieved amounts to an anti-climax. After all, we were not the body responsible for the settlement of the steel strike: the responsibility for that is and always was that of the government.	For the committee to have
attempted to suggest in detail what the terms of settlement should be, or to have dictated a settlement, to my mind would have been setting up a 35-headed Minister of Labour- and such a thing would be a monstrosity.


An hon. MEMBER:: And how!


Charles Cecil Ingersoll Merritt: The other criticism is as to section 6 of the report. I was surprised to hear the hon. member for Spadina (Mr. Croll) speak about it as he did. His remarks were a sort of fairy story which, in my opinion, distorted the meaning of the recommendation.
I join with the hon. member for Calgary West (Mr. Smith) and the minister who has just taken his seat in saying that all that means is an assurance of a secret ballot in the event that the Minister of Labour is not satisfied that a secret ballot has been taken before the strike.


Angus MacInnis: Does it say that?


Charles Cecil Ingersoll Merritt: That is what every hon. member in the committee, including; I am sure, hon. members who have criticized the recommendation, fully -nderstood it to mean.


Angus MacInnis: No, no; why does it not say that?


Charles Cecil Ingersoll Merritt: First, there was a proven lack of forward policy to handle labour-management relations and to improve them in the period after the war. Second, there was a great lack of resolu^ tion and, in one case I am going to mention, not very adept handling of crises when they came as a result of that lack of forward policy. Third, there was, of course, the inexcusable action of condoning and therefore encouraging the breaches of law that we have come to know so well this year. I should like quickly to run through those specific criticisms that I have made of the government.
As to the lack of forward policy, our report itself is a gentle chiding of the government for not having introduced of their own volition a year ago, some of the very things we are recommending to meet changing needs now that peace has returned and the patriotic impulse is no longer so strongly there to keep down friction. Without reading the recommendations, I say that those things would have helped us. I want to go farther than that. I want to say that wage control, necessary in war and necessary in the transitional period if you are to have price control, is nevertheless a negation of free collective bargaining. Labour looks upon free collective bargaining, I think, as being next in importance to its right to strike. Therefore, when you impose wage control, certainly you must be careful that in some way you make up to labour for depriving it of its full right to free collective bargaining.


Humphrey Mitchell: Does the hon. member think that if you have free collective bargaining it will mpan no strike?


Charles Cecil Ingersoll Merritt: I will answer the minister in this way.


Humphrey Mitchell: Do not stick up straw men and knock them down.


Charles Cecil Ingersoll Merritt: I am not sticking up any straw men; far from it, I assure the minister. I believe that if we had free collective bargaining, then many of the wage increases which are asked for now would obviously be possible. The management concerned, not being held under a price ceiling, would be able to grant a little more of wage increases and raise prices rather than have a strike.


Humphrey Mitchell: I want my hon. friend to finish his statement; does he believe in the principle of price control?


Charles Cecil Ingersoll Merritt: I am going to be longer than I thought I would be. I will say to the minister that I am not as ardent a supporter of price control as he is. I think it is obviously wrong in principle. But I would not have taken off price control on V-J day, and under

the policy which the government has followed until now I would not be able to take it off to-day if I sat in the seats of the mighty. Let us assume that price control is necessary for the purposes of this argument. Then you must have wage control. But if price control were not necessary, then we would have free collective bargaining. If the government is to maintain wage control, as they must with price control they should realize that such a course would cause irritation to labour. However, the evidence clearly showed that they allowed one of the great congresses of labour to lose all faith in the national war labour board and its members.
The government have failed to coordinate their price and wage control policies in a way that, to me, is incredible. They failed to produce a policy that was always a little ahead of the needs of the moment. Their policy was always six months behind. Thus we have had price control being gradually relaxed over a period of a year since the conclusion of hostilities, and we have had three relaxations of the wage control order. One came in January; one came in April, and the third came in June. The relaxation of price control was always a little ahead of the relaxation of wage control. They could easily have been coordinated had the government taken care that that be done.
For instance, in January they relaxed the rule which prevented any wage increases except where there was gross injustice and inequality, in favour of the rule allowing increases only to equalize rates in an area. At the same time in January the government had the recommendations of the Canadian Congress of Labour, of which Mr. Pat Conroy is secretary, that that second stage should have been relaxed and that the rule of "just and reasonable within the price structure" should have been substituted for the existing regulation. The government should not have waited until the following June to do that.


Humphrey Mitchell: If I may correct my hon. friend, the congress of labour wanted the abolition of wage control, the reinstatement of collective bargaining and the maintenance of price control. That is the record.


Charles Cecil Ingersoll Merritt: I have the record here of Mr. Conroy's evidence, and I refer to page 754 of the proceedings. He states that in January, in response to a request by the minister for his opinion, he recommended:
*1. There should be .a free range for negotiation between employers and unions of at least ten cents an hour, with a further proviso that, where reduction in hours of work is agreed upon, or has been effected, provision should be made for a larger amount than ten cents an hour.

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The national and regional war labour boards should have authority to increase wages to such levels as are deemed fair and reasonable, thus eliminating the provision "for the same or comparable work in the same or similar localities." In short, in order to meet the need of constant production and of a high living standard the use of obscure language and equally obscure interpretations should be discontinued.
Those were the two recommendations made by the congress. They were not followed by the government, although the government had asked the congress for its opinion.


Humphrey Mitchell: I do not want to interrupt my hon. friend, but I have here the memorandum which was submitted to the government in April


Charles Cecil Ingersoll Merritt: I am referring to the January incident, not to April.
There seem to have been three times at which there could have been a settlement of these problems, and the government, by failing to seize the opportunity, failed so to settle. One was in January, one in April, and one was at the time of the appointment of the controller.


Humphrey Mitchell: Let us have the April one.


Charles Cecil Ingersoll Merritt: I am referring at the moment to January. In January, at the time Mr. Conroy made these recommendations to the government, he made this extraordinary prophecy-extraordinary	in its accuracy,
judged by later events. He wrote a letter from which I quote two paragraphs. He said:
The foregoing are the minimum that labour can subscribe to in the present transitional period. We believe that, in view of the existing situation in the United States and the expected impact of the results of the same in this country, wisdom should dictate a liberal and orderly process of transition rather than the amendment of the regulations -within narrow limits, which would undoubtedly be unsatisfactory and open the gate to a deluge of wage controversies and possible dislocation throughout the country. It may be said that, having started in the United States, the deluge may be beyond us in any event, and therefore why bother about an orderly transition? This would seem to us to be specious reasoning, and its only effect would be a partial halt to reconversion, with continued shortages of goods and the inevitable breaking down of resistance to maintaining an economic price level.
And then these significant words:
The question to be considered is whether we should move in advance of the heavy impact of these situations or wait until we cannot control them.
So that there it was quite apparent that so far as this congress, which is the congress particularly affected, is concerned, had that ten-cent increase or the power to grant the
ten-cent increase been given in January, it would have satisfied Mr. Conroy and his congress.
Then we come to April, when we had it in evidence that ten cents offered then would probably have sw'Rled the steel strike.


Humphrey Mitchell: Why did they not go to the regional boards, like every other organization did? The building trades got ten cents in Ontario in April.


Charles Cecil Ingersoll Merritt: Then we come to the last chance of averting the strike, which was when the controller was appointed. Just before the controller was appointed, we had evidence that the Minister of Labour knew that the union was not prepared to accept ten cents, and yet the appointment of the controller was coupled with what I call the ten-cent speech or the ten-cent letter which the minister read in April.


Humphrey Mitchell: What do you mean- the ten-cent letter I read in April?


Charles Cecil Ingersoll Merritt: The letter to Mr. Conroy: "Those best able to judge." The minister will remember -the letter.


Humphrey Mitchell: That was not "the letter." I wired to Mr. Conroy in Hamilton.


Charles Cecil Ingersoll Merritt: Well, it is the telegram. But it seems to me that at that time, had the controller been put in and no ten-cent limit imposed by indirection, this strike against the controller might never have taken place. It seems to me that when you couple that with the government's lack of resolution in dealing with the strike incident when it did arise, you have a very serious failure in the administration of labour policy. When the strike threatened the government passed this order in council; it contained penalties in the event of breach, and when the strike took place in defiance of the order in council it became apparent that the government of Canada was bluffing; and I say to you in all seriousness, Mr. Speaker, I do not believe the government of Canada should ever bluff.
Much has been said about lawlessness on the part of these unions, and I join with the minister in condemning it utterly. I do not believe there is any situation in Canada where any citizen is entitled to .break the law; and when I say that, I mean the law as it stands, and not the law as some people want it to be. But I say that there is such a thing as leading a person up to greater and greater breaches of the law, by undue laxity and leniency in the inception of the difficulty. This trouble started in about 1943, when unions of this congress first showed that they
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did not wish to'follow the machinery of the regional war labour board, and they got part of their demands even though they behaved in an illegal fashion. Then we had illegality on the picket lines across this country last winter and more and more so this summer. No action was taken, and finally we come up to the time when the order in council is passed, when bodies in the country feel strong enough, or feel the government is weak enough, to disobey the order of the government appointing the controller and saying that they should stay at work. I do not think we can blame all the lawlessness on labour when we have a situation like that. They were fighting for what they thought was right; they were just edging along and seeing what they could get away with; they got away with too much, and the responsibility for that is on the government.
I believe that this steel strike is not a problem only in labour-management relations. I do not believe, although in the main it is a strike against the steel companies, it is entirely that. I think it is also a strike against the government's wage control policy. For the solution of this strike and for the solution of the labour crisis which we are going through I do not think we need at this moment any new labour law, although I hope improvements will result very shortly. But I believe a solution of our present difficulties requires only the exercise by the government of its two responsibilities; first, its responsibility to maintain price and wage control in, order to prevent inflation, and1, second, its responsibility to maintain law and order in the country. If it does both those things in the interests, not of labour and management or any particular party, but of the Canadian people as a whole, and applies those principles and follows them to their logical conclusion, the steel strike will be solved), as will all labour unrest in, the country.
I just want to refer to that responsibility which the government has for price and wage control in Canada, and particularly to show what is happening out in my part of the country, in British Columbia. It was there that the first fifteen-cent settlement was reached, and that may have precipitated the difficulties which we now face. But the government has never said that there is a ten-cent ceiling in this country. They have rather put up Mr. Gordon, who says that, or something approximating to it; but every time we pressed the ministers to say whether ten cents was government policy they said "No, we will not say what government policy is; the regional war labour boards are entirely autonomous, and we are not going to inter-

fere with what they do." What happened out in British Columbia? First of all, there was a fifteen-cent settlement in lumber, and after that, some forty or more settlements between management and labour, joint settlements and joint applications to the board for approval of wage increases of fifteen to seventeen cents. Although the minister never, as a matter of government policy, supported Donald Gordon in, his ten-cent statement, the board out in British Columbia did not feel itself quite as autonomous as the minister seems to think it was. After Mr. Gordon's statement, the board out there imposed an interim ten-cent ceiling pending instructions from Ottawa, and Mr. Pearson, the minister of labour of British Columbia, and the chairman of the board, is reported as follows:
He disclosed that he had asked Ottawa for specific directions on whj' the increase above ten cents would be disastrous to the national economy and he said that pending clarification from Ottawa the ten-cent limit "is the only-reasonable thing we can do. After all, we are only a junior board and we must take our direction from the federal authorities on a matter of this kind."
While the minister is saying that the board is autonomous, the board is saying that it is not autonomous and wants instructions. After that, the minister, according to press reports, gave an answer to the board in which he said that:
. . . the department had given no instructions to the B.C. war labour board to limit increases to ten cents an hour. He suggested that the B.C. Board might have decided to withhold final decision on cases until it saw what action would be taken by the commons industrial relations committee which is investigating the whole situation.
Following that denial, as I call it, of Donald Gordon, the British Columbia regional war labour board announced that it was going to deal with each case on its merits and without relationship to Donald Gordon's statement. Unfortunately, I have not yet got the paper of last Friday which contains that statement and I do not know exactly what Mr. Pearson said, but that is the sense of it. So that we now have this situation. In British Columbia fifteen cents has been granted. Forty applications for fifteen cents still exist; forty applications for fifteen cents will probably be passed by the British Columbia board, and a pattern of fifteen cents will be set in British Columbia. But the minister says that his personal view is that Donald, Gordon is right and that ten cents will break the price ceiling and that we cannot have more than ten cents in eastern Canada.
Surely the government has to do one of two things. It has to come out and support Mr. Gordon's statement, or else it must repudiate

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Mr. Gordon's statement. The government cannot support it in eastern Canada and repudiate it in the west, because British Columbians probably just as much as anyone else, care whether price control is maintained. In my view, therefore, it is absolutely essential, not only for the settlement of the steel strike, but also for the solution of the wider difficulty, that the government give an authoritative statement on what our economy will stand, and so persuade all parties to get in behind them and support them in the position they take in the interests of the whole country.
The last thing I wish to say is that we must have a government which will administer the law fearlessly and without hesitation or equivocation. I do not believe there is any class of persons or any person in this country who can defy our law, and if the law is not suited to what we want, then this is the place in which to change it. But at any moment we have certain laws standing on the statute books. It is the responsibility of the government to enforce that law as it stands I am quite sure that when all the people of Canada know that the government will enforce the law as it is laid1 down by parliament, we shall quickly get rid of this lawlessness, this bypassing of boards, or violence on the picket line which has contributed so much to bad labour relations in the country.


Wilfrid Garfield Case: I should like to make a few observations, not in a critical sense but rather by way of appreciation of the opportunity that was mine to sit with the labour relations committee and study and seek to give some sense of direction to the government in one of the most critical moments in Canada's history. I shall always remember my experience in that committee. It was an opportunity to gain first-hand knowledge of the tremendous problems faced not only by the government but by the people of Canada. Of course the house is aware that the majority of the members of the committee were Liberals and supporters of the administration, but I hasten to say that I was never at any time conscious of that fact. There existed the best of good feeling and a sincere desire on the part of all to obtain all the evidence we could and to arrive at reasonable conclusions.
I was greatly impressed with the most magnificent presentation this afternoon by the hon. member for Calgary West (Mr. Smith), and I say with him in effect that it is all very well for those who are outside, not charged with responsibility, to be critical of the report which the committee saw fit to return to the House of Commons. But we had to strike some balance, and we were not going to bring 63260-323
about that sense of confidence, or the possibility of solving our great problems, by indicating to one and all that we were biased in our views. I am sure that, as the various witnesses appeared before the committee, we became more and more convinced of the sincerity of those who came before us, and indeed they had a grasp of their problem and were able to convey a great deal of their knowledge to the committee.
I wish to refer for a moment to a brief sent to me by the Owen Sound board of trade. Unfortunately, it did not arrive in time to be presented to the committee, and I do not propose to read it in its entirety at the moment, but rather to say that the Owen Sound board of trade is comprised of 300 representative business and professional men of the community who sought to make a study in an approach to this great problem. Their representations to me are based in the main on this view, not to forget the great consuming public. I believe it was Mr. Conroy who said, in answer to a question, that his organization would probably represent between 300,000 and
350,000	people in Canada. That leaves a vast army amounting to millions who are not organized and who are now victims of the situation which confronts the country at the moment.
Therefore, in referring to the brief presented by the Owen Sound board of trade, I simply suggest to the government that we must not in any sense lose sight of the vast impact upon a multitude of people who can easily become the innocent victims of a policy which might lead us nowhere. I think it was with that thought in mind that I had some appreciation of the representations made by Mr. Donald Gordon. The committee were sincere in their report. We believed that price control could not be maintained without a measure of wage stabilization. Even though, in all sincerity, we might be inclined to question the judgment of one whose experience and background are sufficient to recommend him to any committee of parliament, nevertheless I do not think there was one member on the committee prepared to assume the awful responsibility of saying that he was wrong. I do say this and my observation was made to the committee, and I repeat it in effect now-that we have arrived at a time where price control cannot be held in rigidity; that there should be a degree of elasticity. In order to gain the cooperation of the Canadian people-and in my opinion if wTe are to maintain price ceilings or price control it will require the complete cooperation and self-discipline of the Canadian people-it must be brought home to them that in order to maintain price control the wartime

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prices and trade board may have to retreat to a new line. In other words, these increases in prices, which would accompany an increase in wages, would be made more gradual to lighten the shock upon the economy; because it does seem to me that sooner or later we are going to reach a certain peak before we have accomplished that economy of plenty which we all believe will solve the problem of price control.
So far as the unions are concerned, I share the view that much of the agitation and much of the unrest apparent come from a source which is foreign to our Canadian democracy. I used words in committee to this effect, that the unions should seek to smoke out the communists, and I received the prompt reply that if they were to smoke out the communists there were a lot of others who should be smoked out as well. I can appreciate that it is not an easy problem; in fact it is a difficult one; but I have such a high regard for labour unions, and I feel that they are so necessary in an organized economy or in an organized society, that I hope they will continue to resist with all their efforts the inroads of communism and communistic doctrine. That is one thing which makes it more difficult to enforce the law and order to which the hon. member who has just taken his seat referred.
I am one of those who believe that every citizen in Canada who enjoys the protection which our laws provide should be prepared to accept his responsibility as a citizen and conform with those laws. The time has come when the government will have to give some evidence of their determination to see that law and order are respected in the country. That brings me to section 7 of the report which has not been touched upon particularly, and which reads as follows:
Your committee recommends that the controllers appointed by order in council P.C. 2904 be instructed to implement the terms of such order with such modifications as the government may determine.
I believe there is a possibility of some misunderstanding of this section. That is apparent particularly in some editorial comments in regard to these words "with such modifications as the government may determine". I think the spirit and the understanding of the committee was that if it were necessary to strengthen the controllers' hands it should be done. There was no intention of giving direction to the government to restrict the controllers. I take clause 7 to mean that, if necessary, the government would be prepared to strengthen the controller's hands to see that his administration was admitted and that every effort would be made to return men to work and production started and maintained.

I can well remember that evening almost a month ago when we started out with such high hopes for the accomplishments of the committee. The Minister of Labour (Mr. Mitchell) outlined the nature of our inquiry. He expressed the hope that farmers, consumers and others would be heard, along with those who have been heard by the committee. I believe that it was only' the time factor which caused us not to interview farmers and those who might be considered organized consumers. It was for that reason that I recommended or sought to have included in the report a resolution to state that this committee should be reconvened at the earliest possible moment at the next session of parliament. I understand that I would be in order in making a motion of that kind at that time.
If I have any criticism at all to offer with regard to the government's attitude it is to the effect that this committee was not called into being at an earlier date. However, as someone has said, it is always easy to look backwards and criticize the government; but the government did know that the country was seething with industrial unrest. I join with the Minister of Reconstruction (Mr. Howe) in what he has said. I am sure that every member of the committee agrees with him in saying that the deliberations of the committee justified its existence. Because of that fact, the government may not have realized early enough the contributon which the committee could have made. Had the committee been called together at an earlier date, it might have accomplished a great deal. Much remains to be done. Our Canadian economy will not permit of strikes. We are producers. At this very moment there is a possibility of Canada gaining access to markets which might be denied us in a very short time. That will react very badly on the nation's welfare. If we can play some part now and later in seeing that the proper formula is worked out, either in committee or by the government, which will provide for some stability of employment and remove this irritation and bring about some semblance of confidence in each other, then we can really get somewhere. I think it was Mr. Brockington who left the thought with the committee that long periods of strife and strikes lead to greater difficulties in settling disputes. That was in evidence in the committee. As the hon. member for Calgary West said this afternoon, it is certainly no tribute to the employers of labour when a leading industrialist in Canada has to admit that the first time he met the national directors and the bargaining agency of his factory was here in Ottawa, after the strike

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had been in progress for many weeks. I am saying that, not entirely in a spirit of criticism, but in the hope that better understanding and greater confidence in each other will bring about better relations between management and workers. As we grow to nationhood, as our great industrial machine expands and industries become so huge that thousands are employed, the old personal touch is gone. Yet by the same token I think we must all recognize that it would be impossible to bargain with each one individually, as might have been the' case when the industries were of smaller proportions. So it would seem that for many years to come there will have to be some bargaining agency, and I believe the sooner industry recognizes that fact, the better it will be.
I want now to say a word in reply to the hon. member for Lethbridge (Mr. Blackmore), and I also made this observation in the committee. He was asked this question, and I did not get his answer: Would he be prepared to subsidize all industry in Canada? That is a fair question which requires some consideration. I have only to remind hon. members that, after all, subsidies come out of taxes, and that taxes come out of the pockets of the people and enter into the cost of production of our manufacturers. Oitr costs of production can have a great effect on our ability to secure our share of the export markets of the world. The time is not far distance when competition in world trade will be a vital factor, and we should always keep that thought in mind if we are to guarantee employment to Canadian workers. Reference has been made to our tremendous contribution to the war effort, which we may all applaud and greatly admire. But one factor is often overlooked. It will also be found in the record that we borrowed about $13,500 million of the $25,000 or $27,000 million we spent on account of the war, and we still have that money to repay. If we continue to indulge in subsidies, at a time when collectively we probably have more money than we ever had before, then the outlook for the future is bad. I think the time for the government to do its pump-priming, if it has to use subsidies, is when private enterprise fails to take up the slack, not when we are moving into a cycle of expansion and greater prosperity. As a matter of fact I think economists will agree that to-day we have more money collectively than we ever had before. In 1939 I believe we had something like $281 per capita. We now have something over $1,000 per capita; and we have over $6,250 million in liquid resources. If I were to remind hon. members that we financed our 1929 disaster on about 82,300 million of liquid 63260-3231
resources they will understand the tremendous task which faces those charged with the responsibility of maintaining the price ceiling, .while this huge volume of money is seeking an outlet on a market which is still short of supplies and will remain short for some time to come. The danger will become greater unless we step up production to meet demand, and we shall not step up that production as long as there are strikes and industries are closing down. It can lead to grave disaster; the moment is critical indeed.
That is one thought which encourages me to say I believe there must be greater elasticity in the price ceiling, so that the controller may retreat to a new line and bring home a clear picture to the Canadian public in order that they may realize that if costs of production are to increase, so will the cost of living increase. But I cannot believe that the danger in regard to the price ceiling will be any greater than it will become very shortly if we continue to have lack of production, with our workers idle and our industries closed down. We hear about new money, or social credit, or whatever it may be called, I know our difficulty at the present time is to encourage people to work for the money we are now offering. If we are to hand out money without any work at all I do not know whether I shall be able to get anyone to cook my meals for me. I would be afraid we were living too close to what is very easy to achieve, a currency that is not worth a great deal. In other worda, the value of money depends entirely upon its acceptability and upon general confidence in the government of a country.
I want to dwell just for a moment on a statement made by the hon. member for Vancouver East (Mr. Maclnnis) and the hon. member for Spadina (Mr. Croll) with respect to recommendation No. 6. The only observation I have to make is that I do not see how we are depriving anyone of anything if we supply them with ballots upon which they can exercise their own good judgment, untrammelled and unafraid, because I feel sure that a vote taken under government supervision would show exactly what the workers most desired.
This afternoon there seemed to be doubt in the minds of some as to what the deputy minister, through the minister, said with respect to the war labour board, and I want to read from page 406 of the proceedings of the committee. I shall read the complete paragraph. This is Mr. MacNamara's sworn testimony:
On June 27, during the morning, the minister, deputy minister and director of industrial relations met with Mr. Murray Cotterill. The minister reviewed the general situation in Canada and expressed the opinion that the general
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pattern of wage increase should not exceed 10 cents per hour. In the afternoon the deputy mimster made a proposal to Mr. Cotterill that the department, under a plan in mind, could arrange for the appropriate regional war labour boards to issue a directive for a rate increase equal to 10 cents per hour, the increase to be worked out in a manner found desirable and reasonable by the union. One method suggested was that an increase of 8 cents per hour be granted all around, and in addition that overtime rates of time and one-half be paid after 44 hours per week on the understanding that the plants would operate 48 hours per week for the present. The deputy minister gave a firm commitment that he would request the wage boards to issue the directive and also that, if an appeal was taken to the national board, he was quite convinced the latter would not upset the decision.
We had considerable questioning in the committee on that very point, because it left the impression that the boards were not entirely independent- bodies. As the hon. member for Vancouver-Burrard (Mr. Merritt) has said, they were not autonomous bodies; they were bound to a government policy, which the ministers who were examined refused to admit was government policy; and I believe that, has led to much of the difficulty that exists at the present time.
I want to say, Mr. Speaker, that my experiences while serving on the committee will be lasting. We were given the greatest latitude, and I think the very fact that when Mr. Brockington was recommended as mediator the government immediately acted upon that suggestion. He was appointed and, before we concluded our deliberations, was able to bring us a comprehensive report which indicated his faithfulness. His fine work in endeavouring to bring the parties together, though without success, did impress upon us the feeling that in this instance a parliamentary committee did mean something-we were not hampered in any way in our undertakings; the members of the committee expressed themselves freely, and there were many surprises. If we could just carry forward a few steps the spirit shown there, I believe that, through the education the public received as a result of the sittings of the committee being held in public and the amount of publicity those proceedings were given, we may be able to get somewhere in dealing with our problems; and to that end I promise the ministry my wholehearted support.


Mr. PAUL EMILE COTE (Verdun) (Translation) :: Mr. Speaker, may I, at the outset, tender to the chairman of the industrial relations committee (Mr. Lalonde) using his mother tongue which is also mine, my heartiest congratulations for the efficiency and the ability he has displayed in directingi the discussions of that committee. We have especially

noted the dignity with which he has discharged that important duty, his courtesy toward the numerous witnesses who have appeared before the committee, and toward the members of that body. He has always shown absolute impartiality and the aptness of the rulings he had to give on -matters of procedure, in -the course of our discussions, has always evidenced an enlightened legal mind.
I was especially honoured in being invited to second the motion he has moved, Mr. Speaker, for concurrence in this report. It is quite a substantial report which will certainly command the attention of all friends of labour and will have much influence on the progressive development of relations between employers and workers.
(Text): Mr. Speaker, as the seconder of the motion now before the house, I believe it is fitting that I make a few comments in the debate, even though previous speakers have, in my view, already covered the subject matter of this discussion pretty well. I had the good fortune of -being in -the chamber to listen to the Minister of Reconstruction and Supply (Mr. Howe) and to the hon. member for Calgary West'(Mr. Smith). I feel that they have given an accurate and complete summary of the proceedings which took place, and that they have interpreted to the house the meaning of the recommendations now placed before hon. members.
I wish at this point to join with previous speakers in congratulating the chairman of the committee. He has been regular in the discharge of his high function, and has done it in a most impartial and able way.
I wish also to take this opportunity to thank those responsible for my appointment to this important committee. In the past I had scarcely had an opportunity to go so deeply into labour relations. This opportunity comes at what I consider a serious hour in our programme of reconversion from war to peace-time production.
When the committee began its sittings a controller had already been appointed for some days, and had taken over the management of the plants involved in the dispute. The country was anxious about the dispute in this, its most important basic industry, and about a strike which was to affect so deeply general production in other fields of our activities.
Under its terms of reference the committee had to investigate generally the causes of industrial unrest in the country, so that it might report its findings and conclusions to the house. It held forty-eight sittings, during which time it did a magnificent job. If I

Industrial Relations
were to compare the work of the industrial relations committee with that of any other committee in this or any other previous session, I would say that in the same period of time there has been no committee in the past which achieved such important results as did the committee on industrial relations.
As I said at the outset, my interest in the work of the committee comes from the fact that in the past I had not had an opportunity to go very deeply into the causes of any industrial unrest. My attendance in the committee gave me a better knowledge of what trade unionism means, its purpose and its necessity. I am convinced more than ever that trade unionism, in a democracy such as the one in which we live, is a true expression of the natural development of labour. It is an expansion of the individual rights which may be developed in smaller circles such as the family, or in other larger social or religious groups, and which find their natural development in trade unionism or professional associations.
The process of forming unions is certainly to be encouraged. It has to be developed, so long as that development follows the lines of true democracy In a democracy the basis of all our activities and the reason for our legislation is that of safeguarding and developing the rights of the individual. Our legislation must also protect the individual in all his fields of activity, and must therefore, in matters relating to labour, give a hand in the development of trade unionism. Otherwise, as obtains in a dictatorship, trade unions do not represent the natural expansion of individual rights, but become the instrument of the state to impose its doctrine and its policies of action upon the worker, whereas the opposite should be done in a democracy.
Therefore I believe strongly in trade unions. When I look at the achievements they have attained in the past, the increased standard of living they have provided1 the worker, the increase in his security, I consider that so long as democracy is present, and so long as such principles are developed in trade unions, we shall march forward toward real progress.
In some circles there is a wrong impression prevailing with regard to trade unions. In my opinion the cause for this is the fact that too much emphasis, too much publicity has been given to the difficult phases of the relations between labour and management. Not enough effort has been made to keep the country informed as to what trade unions have really done. When we have a strike we must not forget that there are hundreds of incidents between companies and unions which have
been satisfactorily settled in a friendly way. In the private life of an individual it is said that happiness does not make history, and I think the same is true of trade unions. We hear too much about their failures to achieve their end and we do not hear enough about what they have really lone. During the war which has just concluded, the membership of trade unions in Canada increased from around
200,000	until it is now on its way to attain the million mark. We all know, from our experience in our own parts of the country, of the improvements which have been brought about in the lot of the worker by the activities of trade unions.
The committee made seven specific recommendations to this house, six of which I think have already received the approval of members of the committee and, I am sure, of the members of this chamber. I should like to offer a few comments on two of the recommendations which I consider to be of the utmost importance. The first recommendation in the report to which I should like to refer is recommendation No. 6 which provides for a strike vote to be taken at the request of one of the parties concerned and at the discretion of the minister. I have examined this recommendation and have come to the conclusion that it affords a safeguard to both parties to an industrial dispute. I cannot understand the views of those who oppose this recommendation. I see in it two guarantees. First, one of the parties must take the responsibility before the other party and the country generally of having a strike vote taken. In the second place, the minister must exercise bis discretion; he must decide whether the request for a strike vote should be granted.
In my judgment, this recommendation should commend itself to the workers, first, because it provides labour with an opportunity to be sure that its will will be taken into account when industrial relations have reached a certain stage. It has been said, particularly of new organizations-and I think this would apply to most trade union locals in Canada- that the direction is too often in the hands of inexperienced men or of a radical element. That is only natural in the development of trade unionism. This recommendation should do much to give a certain amount of assurance to the worker that when the critical hour comes in his relations with management he will have a say in the final decision to be taken.
The unions should not have any objection to this clause. I feel it will strengthen their position. If they give gmd leadership to
Supplementary Estimates

their membership they should not be afraid of an expression of opinion on their part. It is simply an expression of labour's will and there is no reason why unions should object to that.
On motion of Mr. Cote (Verdun) the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, August 21, 1946