1946-08-14

[Stage Direction]
Mr. RALPH MAYBANK (Winnipeg South Centre) presented the second and final report of the standing committee on miscellaneous private bills, and moved that the report be concurred in.
Motion agreed to.
Eighth report of standing committee on banking and commerce.-Mr. Cleaver.


Hon. DOUGLAS ABBOTT (Minister of National Defence):: With the indulgence of the house I should like to make a statement concerning the dumping of footwear at the Point St. Charles dump in Montreal.
On Friday, August 9, during the discussion of the foreign exchange control board bill, the member for Lake Centre (Mr. Diefenbaker) referred to the dumping of footwear on the Point St. Charles dump. In particular he referred to a report contained in the Montreal Star of August 8, 1946, as having stated that the Department of National Defence knew but
WarAssets-Ar7ny Supplies

would not tell the names of its officials who were responsible for the destruction of shoes, although such information was known to the department. On his making this statement I replied that I had not yet seen the article but that the department had not refused to name any of its officials; that a thorough investigation had been made; that a complete report was available and that I would make a full statement at the appropriate time, adding that I did not consider that this was during the discussion of the foreign exchange control board bill.
On reading the article I found that the statement was to the effect that the department had refused to reveal the names of the civilian dealers responsible for the dumping of the footwear. So far as I can ascertain, the Department of National Defence has not refused to divulge these names, and my understanding was that the names were furnished to the press by my colleague, the Minister of Reconstruction (Mr. Howe), a week or ten days ago.
When the matter of the alleged dumping of footwear on the Point St. Charles dump in Montreal was first brought to the attention of the military authorities through an article which appeared in the Montreal Daily Star of July 10, a court of inquiry was immediately set up to look into the whole matter. The court assembled on July 12, the president being Lieutenant-Colonel H. E. Vautelet, and the members, Captain A. E. Jenner, Captain S. P. Dunham and Captain J. A. Forget. A number of witnesses were examined and an exhaustive inquiry conducted into the whole matter, as a result of which it was ascertained that the footwear dumped on the Point St. Charles dump was part of approximately twenty tons of scrap leather, mixed with canvas shoes, purchased on April 25, 1946 from War Assets Corporation scrap division, Montreal, by Gorodensky Registered of 101 Ontario street east, Montreal, for a price of some $40, being at. the rate of $2 a ton. An official of the purchasing concern testified that the material had been purchased in anticipation, of disposing of it as scrap rubber or scrap leather, that upon arrival of the material it had been examined and found that the leather and rubber were mixed together and that the purchaser was unable to sell it without separating the two. As the cost of labour would be more than that which could be recovered from the material, he decided to dispose of it by throwing it out on the Point St. Charles dump.
The court of inquiry clearly established that the military authorities had nothing to do with either the sale or dumping of the footwear in question. It was also ascertained
[Mr. Abbott.!
by the court that on a previous occasion, namely, on or about May 2 or 3, another quantity of scrap material, which included scrap leather and canvas shoes purchased by Imperial Metal and Waste Company of Montreal from the J. H. Block Equipment Corporation and by the latter corporation from War Assets, had also been thrown away on the Point St. Charles dump as having been found to be unsaleable and of no commercial value.
The proceedings and the findings of the court of inquiry to which I have referred were immediately forwarded to national defence headquarters here in Ottawa, and as a result of the information contained therein, a joint statement on behalf of the Department of Reconstruction and the Department of National Defence was made at the eveining sitting on July 19 by my colleague, the Minister of Reconstruction.
Subsequently on July 27, as a result of further reports that were brought to our attention, officials of War Assets Corporation, a civilian representative on my own staff and representatives from the army and Royal Canadian Air Force visited the War Assets reclamation depot at Valleyfield, Quebec. At that time various bales, bundles and bags of footwear and other articles of clothing were opened and examined to see if any articles had been mutilated or slashed. Articles which had recently arrived at the depot and which had not yet been examined by War Assets employees were examined, as well as articles which had been examined and sorted by War Assets employees, and no articles were found which had been mutilated or dashed but which were otherwise serviceable.
The seR-ice representatives requested War Assets employees at the Valleyfield reclamation depot to segregate any articles which would indicate that they had been slashed or mutilated and to advise the service representatives so that further investigations could be made in an effort to trace down the source of such mutilation. I may say that no such articles have been reported since this request was made.
Concerning the practice of War Assets Corporation, I am not in a position to make a statement, although I have a copy of a statement made to the press on the 7th of August by Mr. J. H. Berry, president of the War Assets Corporation, in which he said in part:
I must confirm that, prior to conducting this investigation, canvas shoes, which, in the opinion of the officials of the corporation, were not usable or repairable were cut by corporation inspectors at Valleyfield. This was done in accordance with previous and long-established practice. This cutting by the corporation has always been confined to footwear which, as

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stated, was considered unusable and not repairable and, if it is true, as has been stated, that there were several hundred pairs of new shoes placed on the dump in a cut condition, I can find no trace of this cutting having been done by the corporation inspectors. . . .
We have now stopped cutting all canvas shoes, even when they are categorized as unrepairable and of no value in their present form as a shoe, but exactly how we are going to merchandise them as shoes, we do not yet know as we believe there will be some difficulty in finding a market for them other than as scrap.
The point as to whether it is fair policy for the corporation to sell at scrap prices unrepairable. unusable, and non-disinfected shoes without mutilating them remains to be considered by the corporation.
In conclusion may I say we have not been able to ascertain how or by whom the footwear dumped on the Point St. Charles dump was slashed, as is alleged to be the case, nor is there any clear indication as to how many shoes were allegedly mutilated. It has not been army practice to mutilate footwear since 1941, and no evidence has been adduced to show that there has been such mutilation by military personnel.
I realize the importance of an incident such as this which might appear to indicate a wilful waste in the handling of public property. I appreciate that this is not an appropriate time to discuss this matter in detail. I shall be glad to do so, however, when my estimates are before the house, which I hope will be within the next few days.


Mr. DIEFENBAKER:: If I may be permitted to ask a supplementary question: in view of the difficulties the two departments have experienced in ascertaining the actual circumstances connected with these shoes, will the government give consideration to the appointment of a royal commission to look into this matter?


Mr. HOWE:: Is that part of the economy programme?


John George Diefenbaker: I could answer my hon. friend in regard to economy, if I were not denied the opportunity at the moment. Certainly the war expenditures committee is not doing it. In the second place, will the minister table the evidence given before the board of inquiry and also the report of the investigation if any made by War Assets Corporation regarding these matters? The people of Canada desire to have these questions finally concluded by a careful, impartial examination.


Douglas Charles Abbott: I can answer the question by saying we had better discuss it on my estimates. As to tabling the proceedings of the court of inquiry, I have been over them
carefully and they do not contain anything I would not be delighted to table; but it has been the practice, and I think it is a wise one, that proceedings of military courts of inquiry or courts martial are not tabled in the House of Commons, and I should be reluctant to create a precedent by doing so. But I shall have the proceedings of the court of inquiry before me when my estimates are under consideration, and I shall paraphrase from it as may be necessary. I make the statement now on my responsibility as a minister, however, that there is nothing in the proceedings of the court of inquiry I should not be delighted to have this house read.


Mr. GRAYDON:: Perhaps that disposes of the question asked by the hon. member for Lake Centre; if the minister wants to bring the proceedings of the court of inquiry before the house I certainly think he should be allowed to do so, and I think we should ask him to bring it in full and present it to the house.


Mr. FULTON:: May I ask the Minister of Reconstruction and Supply or the Minister of National Defence if they can give any reason why these supplies of shoes or shirts which were alleged to have been dumped could not have been sent to Europe for relief over there?


Clarence Decatur Howe: May I explain that the Department of Reconstruction and Supply has gone to great expense for years to maintain a repair depot at Valleyfield. Any footwear or clothing coming from the army which is capable of being repaired1 is being repaired by War Assets Corporation and is being sent to Europe. The discussion in the house, which has gone to great length, has to do with material which the inspectors of War Assets Corporation report as not being capable of being repaired. This we sell for junk-and we seem to have done better than the junk dealer who bought it, because at least we made $40 from it, while the junk dealer threw it away. That is the transaction with respect to which it was suggested that a royal commission be appointed. It has nothing to do with usable material, but it has to do with material which the inspectors believe is not repairable.


Gordon Graydon: I should like to ask a question which I believe is in the minds of the Canadian people. If this stuff is not repairable or is not usable, and therefore is no good, why is it slashed?


Clarence Decatur Howe: I do not think anyone in War Assets Corporation would wish to take the responsibility for marketing shoes, or allowing
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anyone else to market them, which have not been disinfected. My hon. friend must realize that shoes which have been worn do carry disease. Shoes which are regarded as marketable, and which it is intended shall be marketed either here or in Europe, are carefully disinfected. The reason that the shoes are slit is to indicate that they have not been disinfected, and in the opinion of the corporation are not suitable for marketing. That has been the practice in quartermasters' stores for centuries; particularly in respect of shoes which come in and which are not suitable for resale. This was done in the usual course by the inspectors of War Assets Corporation. We have stopped it because, while we believe it is a desirable thing to do, we are not prepared to stand the criticism. As I have said, the reason it is done is that the corporation does not wish to take the responsibility for passing on shoes which are not disinfected.


Douglas Charles Abbott: And some unscrupulous
dealer might try to sell them as good shoes.



INQUIRY AS TO REPORT RESPECTING DISPOSITION IN HAMILTON AREA

[Stage Direction]
On the orders of the day:
Mr. F. E. LENNARD (Wentworth):: Mr. Speaker, I should like to ask the Minister of Reconstruction and Supply if the investigation by the Royal Canadian Mounted Police into irregularities in the disposal of w'ar assets in the Hamilton area has reached any final stage, and if he can say when a report may be expected?


Clarence Decatur Howe: I received notice
of this question just as I came to the house, and I have not refreshed my mind in the matter. However I believe some two or three days ago a report from the Department of Justice was received in the Department of Reconstruction and Supply. I have not seen the report, but I was informed that it states that the facts obtained by the police investigation do not warrant a prosecution.



QUESTIONS

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

Mr. GREEN:: 1.	Was property situate at Harrison's Hot Springs, British Columbia, taken over by the government during the war?
2,.	If so, on what date and by what depart* ment?

3.	Has this property now been returned to the owners?
4.	If so, on what date?
5.	What is the aggregate of amounts paid and payable to the owners?
6.	How much of such amount was (a) for the lease of the property; (b) for furnishings?
7.	What additional sum was expended for repairs, alterations and additions to the property?


Mr. LAPOINTE:: 1.	Yes.
2.	15t.h May, 1943. Department of National Defence.
3.	Yes.
4.	15th May, 1946.
5.	$186,000.
6.	The terms of the lease did not apportion between premises and furnishings.
7.	$25,0S6.75.


EXPORT PERMITS
Mr. HATFIELD:: 1.	How much money was paid by Canadian exporters for export permits on potatoes each year from 1941 to 1946 inclusive?
2.	How much money was paid by Canadian exporters for export permits on mill feeds and flour each year from 1941 to 1946 inclusive?
3.	How much money was paid by Canadian exporters for export permits on meats each year from 1941 to 1946 inclusive?
4.	How much money was paid by Canadian exporters for export permits on grain each year from 1941 to 1946 inclusive?


Mr. MacKINNON:: Information is not
available as requested. Receipts are recorded by permit number without indicating the commodity involved.
An export permit fee of $2 was charged on all permits covering commodities valued at more than $100 for the period May -5, 1941, to May 8, 1946. On this latter date the export permit fee was abolished. Receipts from export permit fees during this period were as follows:
May 5, 1941-March 31, 1942..$ 94,900 00
April	1,	1942-March	31,	1943....	140.056	55April	1,	1943-March	31,	1944....	174,988	00April	1,	1944-March	31,	1945....	215,055	00April	1,	1945-March	31,	1946....	241,529	38
April 1, 1946-July 31, 1946. 22,169 15


QUESTION PASSED AS ORDER FOR RETURN
Mr. ROBINSON (Bruce):: 1.	How- many customs offices have been (a) closed: (b) opened, in each province of Canada since January 1, 1928?
2.	Where was each customs office located that was (a) closed; (b) opened, and what was the date m each case?


Mr. McCANN:: Return tabled.

Japan-Control and Supervision


CONTROL AND SUPERVISION-REPORT AS TO PARTICIPATION OF CANADA
[Stage Direction]
On the orders of the day:
Gordon Graydon: My attention was drawn this morning to an Associated Press dispatch from Tokyo, Japan, which indicated that General MacArthur had in mind or had proposed that some of the smaller or middle powers, including Canada, would be invited to join the allied war council, which at present consists of Russia, China, Great Britain and the United States, for the supervision and control of Japan. In view of this statement I take it that some preliminary formalities have been carried on between the Canadian and United States governments, or between the Canadian government and General MacArthur, and I should be glad if the acting Secretary of State for External Affairs would make some statement to the house concerning this matter, if he is in a position to do so.
Right Hon. L. S. ST. LAURENT (Acting Secretary of State for External Affairs): The hon. member was kind enough to show me this dispatch, which I had not seen until a few minutes ago, and which is dated Tokyo, August 13. The first paragraph indicates that General MacArthur "to-day" which would be August 13, in Tokyo suggested the "informal and unofficial" addition of seven members, including Canada, to the allied council for Japan. No invitation has been received, and probably there would not have been time for any invitation to come in the regular way, since the alleged statement would appear to have been made in Tokyo. I see nothing in the dispatch about there having been preliminary discussions in that regard between the Canadian and United States governments, but I shall make inquiries of the permanent officers of the department as to whether there have been any such preliminary discussions, and inform the hon. gentleman thereafter.


Gordon Graydon: I did not intend my remarks to be interpreted as meaning that there had been preliminary discussions, but I took it that in the normal course there would be preliminary discussions before General MacArthur would make any announcement.


HOUSING
Mr. J. A. ROSS (Souris):: Can the Minister
of Justice give us any report on the investigation by the R.C.M.P. into the reported waste
and irregularities in the construction of a group of houses under the Veterans Land Act at Boucherville, Quebec? Some months ago the Minister of Veterans Affairs informed the house that this investigation by the R.C.M.P. was under way.
Right Hon. L. S. ST. LAURENT (Minister of Justice): My understanding is that the investigation is still being pursued. A couple of weeks ago there was a request from the Department of Veterans Affairs for the appointment of counsel to institute prosecutions, and I understand counsel was appointed and is consulting with the- investigators of the R.C.M.P. as to the proper proceedings to be instituted. The appointment of counsel was made some ten days or two weeks ago.


LABOUR CONDITIONS
Mr. STANLEY KNOWLES (Winnipeg North Centre):: I should like to direct a question to the Minister of Labour in reference to the typographical dispute. Has he as yet received a report from Mr. Justice Richards, or is there any statement he can make in connection with this matter?


Hon. HUMPHREY MITCHELL (Minister of Labour):: The answer to both questions is no.


APPOINTMENT OF CONTROLLER FOR BOX FACTORIES IN BRITISH COLUMBIA
Hon. GROTE STIRLING (Yale):: Has the Minister of Labour any information to give the house in regard to the appointment of a controller for the box factories in the interior of British Columbia?


Humphrey Mitchell: The controller who was placed in charge of both the coast and interior operations was withdrawn on August 10, after settlement of the dispute between the organization and the employers. I shall be glad to discuss with the Acting Minister of Finance the other aspect of the matter which he has in mind, namely, the maintenance of production in the box factories.


BRITISH CONTRACT WITH DENMARK
[Stage Direction]
On the orders of the day:
Mr. J. A. CHARLTON (Brant):: Mr. Speaker, last Thursday, August 8, I directed a question to the Minister of Trade and Commerce with respect to the British-Danish bacon contract. This question was referred to the

Supply-Agriculture-Demobilization
Acting Minister of Agriculture with the promise that a statement would be made on Saturday. That statement has not been made. I see that the minister is in his seat this morning; may we have an answer?


Hon. J. G. GARDINER (Minister of Agriculture):: I understand the house is about to go into the estimates of my department, and these estimates include the bacon contracts. I had intended to make a statement as soon as we got into supply.

The house in committee of supply, Mr. Macdonald (Brantford City) in the chair.


Mr. MACKENZIE:: Last night I asked that the two items be called, 266 and 57, for the Prime Minister's office and the Department of Finance respectively. This still leaves hon. members another department for purposes of ventilating any grievances which may arise.


Gordon Graydon: Do you think there will be some?


Stanley Howard Knowles: What is that other department?


Ian Alistair Mackenzie: Legislation.


PRIME MINISTER'S OFFICE
[Stage Direction]
266. Salaries of staff and cost of living bonus and other pay list items, $78,073.
Item stands.

[Stage Direction]
57. Departmental administration, $803,954.
Item stands.

[Stage Direction]
[DOT]179. Meat board, $5,168,799.
James Garfield Gardiner: Mr. Chairman, the seven items under demobilization and reconversion, which are placed under the Department of Agriculture, were discussed in a general way during the general discussion on agriculture estimates. I think we covered practically every item, but inadvertently at the end of the discussion of the general items we did not do what was done in some other departments, namely, go directly to demobilization and reconversion and pass those items. For this reason they still stand to be passed by the committee. However, probably it was just as well that that was done, because two or three other matters have come up since that time. I would call the attention of the committee

to the fact that one of those subjects-the contracts with regard to meat products, and particularly bacon-can be fully discussed under item 479, which is now before the committee. Another item which hon. members desire to discuss-or one would assume that, from questions which have arisen-is 478, which deals with the dairy products board. This will permit of discussion in connection with milk and other products. I am therefore calling item 479 at this time. It will be followed by 478. Along with those I should like to ask the privilege of calling item 375 in the Department of Trade and Commerce, with which both the Minister of Trade and Commerce and I are concerned. This covers the matter of the wheat contract.
I suggest that if we open our discussion by confining ourselves first to the meat board, second to the dairy products board and third to the wheat contracts, we may be able to satisfy hon. members in connection with some questions that are now in their minds. On the other items under demobilization and reconstruction, some five in number, I should be prepared to answer any questions arising generally in connection with those matters. We would first have a general discussion on the items I have mentioned, proceeding from one to the other. We might confine our discussion to the three important matters embraced by these, and then deal with the general situation under the other items. If that is satisfactory I shall proceed on that plan.
My reason for asking . the committee to agree to this procedure is that, as Minister of Agriculture I have been asked to proceed to the food conference to be held in Copenhagen on September 2. In addition I was asked some months ago by His Worship the Mayor of Dieppe to accept membership on a committee having to do with a monument to be erected to the honour of Canadians who served at Dieppe on August 19 four years ago. Within the last two weeks I have had a special invitation from the mayor of Dieppe to be the guest of Dieppe on the occasion of the laying of the cornerstone of that monument on Monday next. Since I was going to Europe anyway to attend the food conference I have planned to leave on Friday and fly to Europe and remain there for the conference. I am suggesting this means of getting right at the items with which I think hon. members are concerned, and with which I am concerned as Minister of (Agriculture, in order that we may deal with them to-day and to-morrow morning, if it is necessary to go into to-morrow morning, in order that they may be fully covered while I am still in the house. If it meets with the approval of the committee I

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shall move down with the Minister of Trade and Commerce and proceed to discuss them in that way.
As to item 479, dealing with the meat board, a question was asked in my absence the other day with regard to the contracts which have been entered into between Britain and Denmark and their relation to the contract which we have with Britain for the deliver}' of bacon to that country. I do not think it is necessary for me to go into the details of the contract which we have with Britain, other than to say that we have had contracts for the sale of bacon and ham to Great Britain ever since the fall of 1939 when the war began. Under those contracts we have delivered considerable quantities of bacon and ham to Britain.
The contracts started out with quantities much lower than have been provided in recent contracts. The highest amount we undertook to deliver under those contracts was in 1943. Since that time the amounts contained in the contracts have been reduced to 450 million pounds. The contract for the last two years has been a contract calling for the delivery of at least 450 million pounds. In one of those years we delivered1 more than that amount; in one year I think we delivered almost that amount, and this year we are not hopeful of being able to deliver that amount.
Under the contract entered into we have agreed to a reduction in the quantity that we are required to deliver to at least 350 million pounds. In 1948 we have agreed to attempt to deliver 400 million pounds. In other words we believe that we can increase deliveries in 1948 over the deliveries in 1947 and therefore we have entered into a contract under which we agree to deliver a greater quantity in 1948 than in 1947.
I think it is in order to explain the position which the government took in relation to the discussions which have taken place and the contract which resulted therefrom covering the years 1946, 1047 and 1948. The 1946 price was arranged at $22.50 per hundred pounds. One should distinguish between a hundred pounds in Canadian terms and a hundredweight in British terms, because the failure to make that distinction has resulted in wrong information being published in the press with regard to the difference between the price that is being obtained- by Denmark and the price that is obtained1 by Canada in connection with this contract. Discussions with regard to our contracts have usually been in terms of Canadian hundred pounds, but when Britain is discussing a contract of that kind it is always discussed in terms of the British
hundredweight, which is 112 pounds. That has resulted in misunderstanding in discussing the price that is being obtained.
By way of laying a background, I should like to say that we have no official information, other than what has been in the press, with regard to the actual terms of the agreement with Denmark. We have been attempting to get official returns from the British representatives here, and they have been attempting to get them in Britain, but what- I am going to give this morning is the closest possible estimate that we could arrive at from the press reports and from the information we have been able to obtain directly from the British officials here as to what is contained in the Danish contract.
Before giving these figures, I should like to point out that in relation to farm products and the prices to foe obtained for them we have laid down a definite policy which has been discussed in this house on a number' of occasions. We have had two objectives in mind. One is to maintain our marketings of farm food products in Britain at the highest possible levels made possible by the production which we have in Canada. We have attempted to avoid giving wrong information to the British as to what food would be supplied or could be supplied from year to year. Then we have written into the contracts the highest quantities that we felt sure we could deliver to the British.
Taking that into consideration we have not been prepared to agree that Canada ought to accept, even if it were suggested-and I am not saying it has been suggested-a constant reduction in the quantities contained in our contracts, beginning say with the first year after the war and continuing downward through the years following the war. We have taken the position in arranging prices, that we should not agree to ask our people to accept a gradual reduction in price for any product which we are selling to the British. I think it would give an indication to our people, to our producers particularly, if we were to agree to contracts with a gradual reduction in quantity and a gradual reduction in price, that we were being asked by the British or by other countries in which we might be marketing farm products to get back gradually to a position in which we would be marketing lesser quantities at a lower return. In all our discusisons we have attempted to maintain the position that we would have a stabilized price and a stabilized minimum quantity to be delivered into the British market over a period of time.
With these thoughts in mind I should like to make some comparison between the contract between Britain and Denmark as we
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understand it, and the contract which we ourselves have arranged with the British people for the marketing of bacon and ham in Great Britain. The present arrangement between Great Britain and Canada provides for a price for Canadian bacon f.o.b. Canadian port of 825 per 100 pounds for 1046 and through from January to August of 1947. I use those months because as I understand it the Danish contract begins with September 1 and continues through until August 31, 1947. So taking that full year, beginning in Canada with September and continuing through to August, the Canadian price is $25 in Canada per 100 pounds. That Canadian price does not include the $1 per hundred which is paid by the federal government on A hogs by way of premium and 50 cents per 100 pounds which is paid on B hogs, nor does it include any subsidies that may also be paid by the provincial governments. The $25 per 100 pounds is the price obtained for Canadian bacon and ham at Saint John or Montreal for the product purchased by Great Britain. That price * continues down to August 31, 1947.
The Danish price for the same period for 100 pounds-not 112 pounds-f.o.b. Danish port is $26.98, which is $1.98 higher than the Canadian price for the same period. That price of $26.98 continues down to September 1, 1947. Then from September to December, 1947, while the Canadian price is a flat price of $25 right through for all of 1946 and down to August 31, 1947, the price under the Danish contract is $25.19 per one hundred pounds beginning September 1 and continuing until the end of December. In other words, it is 19 cents higher than the price which we obtain in Canada for 100 pounds.
I come now to the year 1948. Remember that in 1947 we are to deliver 350 million pounds to Great Britain at $25 per 100 pounds, and in 1948, 400 million pounds, at a price yet to be determined. We are to determine that price some months in advance of Jaunary 1, 1948. But there is a floor placed under the Canadian price. The British have agreed that we shall not be asked to accept less than we were getting at the time, the contract was changed in 1946 from $22.50 to $25. So that the floor for 1948 is $22.50, with the possibility of negotiating for a higher return for the bacon which we provide for Great Britain in 1948.
The price under the Danish contract for 1948 is $21.59 at a Danish port. That is, it is very much lower than ours.
Mr. TOWNLEY-SMITH: Is that a fixed or floor price?


James Garfield Gardiner: That is the price they are selling at. So far as we know, and I do not want to be too definite, those are the prices which have been stated in the press and which have been agreed to by the British officials here to be the price which they think is in the contract with Denmark. That is the information upon which any news items which have been written have been based, and the information is that the Danish price for 1948 will be $21.59. In other words, the Danish price starts out at $26.98 and gradually goes down to $2199. I might point out that we in our discussions did not desire to enter into a contract which started out at a high level and went down to a lower level, particularly if we could get an average price throughout the period which would net us as much over the entire period as varying prices would have netted us, and we obtained that. The British fully understand our position, and I would judge from the figures here that they have taken into consideration the discussions they had with us when entering into a contract with Denmark, and they have not given Denmark any advantage whatsoever over us. There may be some conditions existing in Denmark which would have made it advisable and perhaps preferable for Denmark to ask for a higher price in the year immediately following the war and to be prepared to take a lower price later on.


Mr. SENN:: Are the prices which the minister is quoting for No. 1 bacon, or is there any differential between the different grades that are being shipped from time to time?


James Garfield Gardiner: We assume it is the same grade as ours. Our grades, as the hon. member for Haldimand will recall, were built up partly as a result of the experiences they had had in Denmark. Our prices are on our A's and B's. Denmark has a similar system of grading. Britain of course would not pay the same price for inferior bacon as for a higher grade. Any inferior bacon they buy from us they get at a lower rate. But the basic rate in the British contract is for the high-grade bacon.


Mr. HACKETT:: Has Denmark granted any credits to Britain for purchases made in
the Danish market as Canada has done for purchases to be made in Canadian markets?


James Garfield Gardiner: As I said at the beginning, we have not full information with regard to the contract or the negotiations, but I hope to get more information when I am in Great Britain and Denmark. The best information I have I am giving fully to the house.

_________ Supply-Agriculture-Demobilization
These prices which I have given are the prices which can be obtained f.o.b. Canadian port and f.o.b. Danish port. Before leaving that subject may I say that Denmark has paid no subsidies to their farmers for the production of hogs in the months that have gone by, but I understand from a report in the press recently that there has been introduced into the house in Denmark a proposal that they pay subsidies or premiums or something of that nature on hog production in Denmark in the months immediately ahead, to get greater production. If that is true, probably it will be found that the Danish premiums or subsidies will just about offset the premiums or subsidies which we pay in Canada. Therefore I think we are quite justified in making a comparison between the $25 price per 100 pounds in Canada and the $26.98 price per 100 pounds in Denmark. That $25 continues to the end of 1947 in Canada as compared with $25.19 to the end of 1947 in Denmark. But the Canadian price cannot drop below the floor of $22.50 in Canada, under the contract we have with Britain.


John Thomas Hackett: This all depends on the
accuracy of the minister's information.


James Garfield Gardiner: Yes, but it is as accurate as the information available to anyone who made criticisms in the house in regard to it, because it is the same information. The one mistake made by those who criticized was that they did not figure it was 112 pounds as against 100 pounds. Taking the relationship of the cost to Britain: Britain has agreed to pay under the Canadian bacon contract a price, plus the cost of getting it across the ocean and laid down in Britain, which costs the British people 147s. 6d.


Mr. COLD  WELL@: Per hundredweight?


James Garfield Gardiner: That is one hundred
and twelve pounds-their hundredweight. This price continues through 1946 and all of 1947; and then the guarantee which we have from them for 1948 is 133s. 7d.-that is what it figures out as the cost to them in Britain.
The Danish contract, as it has been reported to us, would make bacon laid down in Britain cost the British, for 1946, 153 shillings and for 1947 153 shillings-that is down to the thirty-first of August; from September to December, 1947, 143 shillings; and for 1948, 123 shillings. That is, the floor which we are guaranteed in Britain for 1948 w'ould still be 10s. 7d. above what the Danish people have agreed to lay bacon down for in Britain during 1948.


John Thomas Hackett: Is that hundredweight
100 or 112 pounds?


James Garfield Gardiner: It is 112.


John Thomas Hackett: It is very confusing.


James Garfield Gardiner: In both cases the prices of bacon laid down in Britain are expressed in shillings and pence and the hundredweight is 112 pounds; but in dealing with the Canadian price in Canada the hundredweight is 100 pounds.


John Thomas Hackett: The minister uses 112
pounds in one place and 100 pounds in another.


James Garfield Gardiner: If you read Hansard
afterwards you will see that there is no confusion.


The ACTING CHAIRMAN (Mr. Golding):: Order. It would be better to let the minister make his statement.


John Thomas Hackett: It might be better, but
it does not help.


William Henry Golding: Try it.


James Garfield Gardiner: Then there is the
history of the development under the contract, which I think should be laid before the committee. My understanding is that the contract with the Danish people is for the delivery of 41.000 long tons; that is, 92 million pounds, in order to get it into the figures which we usually deal with. The figures in relation to the supplying of bacon to the British market immediately prior to the war, during the war, and now are, I think, interesting in the light of these contracts. In 1947 we are to deliver 350 million pounds. The Danish people are going to deliver 92 million pounds. We are agreeing to deliver in 1948 400 million pounds, and if we are to deliver that amount of course it will not be necessary gradually to increase the purchases from elsewhere. If we are not able to deliver the 400 million pounds or to keep up our 350 million pounds, I am quite sure that no one in Canada is going to blame the British for going to Denmark or anywhere else to get what they must eat. So if we deliver our product at these prices-and our prices are higher in the last years than their prices-we shall be able to supply the British market.
I should like to place on Hansard the figures in relation to the supplies of Canadian bacon to Britain form 1937 to 1948. I will read them, but I think it would be better to print the table just as I have it here.



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Mr. COLDWELL:: Has the minister a comparable table regarding the Danish contract?


James Garfield Gardiner: I have, yes. It will go right alongside of the other.


William Henry Golding: Has the minister permission to put it on Hansard?


Some hon. MEMBERS:: Agreed.
(The table follows):
United Kingdom Imports of Danish and Canadian Bacon
	Canadian Bacon	Danish Bacon
	Volume	Volume
	(1,000,0001b.)	(1,000,000 1b.)
1937 ...	
192-0	384-01938 . . .	
169-6	379-61939 ...	
186-5	nil1940 ...	
344-2	nil1941 ...	
460-8	nil1942 .. .	
524-9	nil1943 ...	
560-3	nil1944 ...	
692-3	nil1945 ...	
446-1	nil1946 ...	
*325-0	*92-01947 . ..	
*350-0	*120-2001948 . ..	
*400-0	*120-200
(* Estimated)


James Garfield Gardiner: As to the percentage of total imports to Britain: Canada supplied 20-03 in 1937; 18-57 in 1938; 85 in 1944; 65 in 1945. In 1946 the percentage will be less, but in 1948 we hope to get back to almost 65 per cent, or at least to 60 per cent of the total supplied to the British market.
As to the Danish bacon supplied in the same period: in 1937, 384 million pounds, or 49-5 per cent; in 1938, 379-6 million pounds, or 49-2 per cent. Then the war came on, and from 1939 to 1946 they did not supply any. In the early part of 1946, and possibly the latter part of 1945, they have been supplying some, but while the war was on they were not permitted to supply any to Britain. In 1946 they are agreeing to supply 92 million pounds. In 1947 they are hoping to be able to supply 120 to 200 million pounds, and in 1948 they hope to supply under the agreement between 120 and 200 million pounds, the minimum being 120 and the maximum being 200 million. I have no figures here as to what percentage that would be of the British requirements, either in Canadian or Danish but I will have this table placed on Hansard.
According to the terms of the United King-dom-Danish agreement, the United Kingdom will receive 92 million pounds and Russia will receive 56 million pounds of the total exportable surplus during 1946. Britain is not the only country involved in the agreements which are being entered into with Denmark. Denmark has agreed to supply 90 per cent of her

surplus export to Britain and 10 per cent to Russia. The proportions are not contained in these figures for 1946. This is the arrangement which has been entered into. In 1947 and 1948 Denmark is entitled to sell Russia ten per cent of the total exportable surplus production which will largely depend upon feed supplies in Denmark. It is estimated that the exports may be from a minimum of 135 million pounds to a maximum of 225 million pounds, of which the United Kingdom might receive from 120 to 200 million pounds annually.
That is the full statement with regard to the contracts as it has been given to me and I wish to present it to the committee. If there are any questions I shall be ^glad to answer.


Major James William Coldwell: Are there any other
factors in the two agreements mentioned between Russia and Denmark regarding the exchange of goods or between Britain and Denmark so far as the payment is concerned?


James Garfield Gardiner: We do not know of any.


Major James William Coldwell: We have no such
arrangement ourselves?


James Garfield Gardiner: No.


Edmund Davie Fulton: In giving the comparison between the Danish price and the Canadian price paid by Britain the minister gave the figures down to August 1947, and then from September to December 1947. He then gave the figures for 1948. I should like to go over them to see if I understand them correctly. The minister said that he was speaking of hundred pound quantities Canadian weight, and that the price down to August 1947 is 825 for a hundred pounds Canadian; is that correct?


James Garfield Gardiner: Yes.


Edmund Davie Fulton: Then from September to December 1947 it is $25 for a hundred pounds. In 1948 we contracted to supply, 400 million pounds at not less than $22.50 for a hundred pounds Canadian. I think the minister said that at that time the $22.50 was the price which prevailed until the contract was renegotiated and the British began to buy from us at $25 a hundred pounds. Is that correct? This is all based on one hundred pounds Canadian weight. The minister gave figures which shew that while we started out at $1.98 a hundred under the Danish price, $25 as compared with $26.98, we would end up with our floor price of $22.50 being 91 cents above their price of $21.59 in 1948, and that we might have .it higher. The reason I have asked to check these figures is that this

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matter came up last December when we were discussing the estimates and I inquired of the minister why it was that when we undertook to sell our bacon to England at 113 shillings a hundredweight the price of hogs on the Canadian market immediately dropped. The minister gave an explanation at that time which seemed to account for it. He said that some Canadians had been paying more in Canada for hogs than the market_ would warrant. With regard to the Canadian price he said, as reported -at page 3171 of Hansard of December 8:
All I can say with regard to the price is that it eventually reached 113 shillings and we took care of it out of mutual aid.
At page 3172 I asked a further question with reference to it, and I said that working it out at 113 shillings a hundredweight it comes to $24.75 a hundredweight, and the minister said:
It is $22.50, to be exact. I was speaking in terms of 112 pounds, which is the British hundredweight, and that makes a difference. The actual figure is $22.50.
The minister assured me last December that that was the price for 112 pounds. He now says that in 1948 we shall be getting a guaranteed price of $22.50 for a hundred pounds. There is a discrepancy there. If $22 50 for 112 pounds was the floor price which we were getting then, how it is that he says-
Mr, GARDINER: I think it is the other way round. I say that from listening to what the hon. member has said. I have not looked up Hansard. The hon. member for Kamloops was figuring out what we would get for 112 pounds, which may work out to $24 and something, but I was figuring on what we would get for 100 pounds, which works out at $22.50. I think that was the point.


Edmund Davie Fulton: It was 113 shillings for a hundredweight and I was figuring at 100 pounds.


James Garfield Gardiner: I would have to go back and check Hansard. I will say this, which may give the explanation the hon. member is seeking. There is a difference in the exchange now. The exchange rate will give us a higher return on the present basis.


Edmund Davie Fulton: The minister says that for 1948 we are guaranteed the price which was in effect before the contract was changed, $22.50 a hundred pounds.


James Garfield Gardiner: With the present rate of exchange figured in.


Edmund Davie Fulton: The minister did not make that clear. He merely said that it is the same 63260-301J
price in dollars as we were then getting, $22.50 a hundred pounds, but as I understood him last year, and as it would appear from Hansard, it was $22.50 for 112 pounds. Will the minister clear up that contradiction? Is it $22.50 for 112 pounds? That makes our price less than the Danish price.


James Garfield Gardiner: I am told by the official who drafted the contract and is now sitting in front of me, and who did all the figuring and produced the figures which I am giving to the committee, that the difference is brought about by the difference in exchange. Both sets of figures are correct, the ones given at that time and the ones I am giving now; but I should not like to go into the details of an explanation on the difference in exchange.


Edmund Davie Fulton: What I am trying to get at is this; is it $22.50 Canadian dollars for 100 pounds or $22.50 Canadian dollars for 112 pounds?


James Garfield Gardiner: It is $22.50 Canadian funds for 100 pounds.


Edmund Davie Fulton: That is a different price from the one which was before us last year. It was $22.50 for 112 pounds, according to the minister's statement. Therefore, if he says we are going to get the guaranteed price which we had before, it seems to me that some adjustment will have to be made. I should like to refer the minister to page 3172 of Hansard of December 8, 1945.


James Garfield Gardiner: We shall have it checked
up and see whether we can get the answer.


Mr. BRYCE:: There is one thing on which I am not clear, and one of my colleagues tells me that I am wrong. I refer to the 1948 floor price. Did the minister say that it was $22.50 and that it was going to be almost $25?


James Garfield Gardiner: No.
Mr. BRY'CE: I am wrong, then.


James Garfield Gardiner: I said the floor price is $22.50, but the price to be paid is still to be negotiated.


William Scottie Bryce: But it will not be any less than $22.50?


James Garfield Gardiner: It will not be any less.


Mr. CASTLEDEN:: Is $21.59 the Danish floor price?


James Garfield Gardiner: That is the actual price, as I understand it; we may get other information, but that is the way we understand it.


William Scottie Bryce: I have always been in favour of stabilized prices. You get a stabilized price when you sell to Britain. What arrangement

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is the board going to make to see that the farmer gets a stabilized price? On occasions the minister has said in the house that the oacker has paid too much. The packer has told me that we were getting $1 a hundred too much for our hogs. When we take a drop he uses this argument: "Well, we paid you too much a month ago, when receipts were low." When the government makes an arrangement for a stabilized price to the farmer it should be the obligation of the meat board to see that every farmer gets the same price for twelve months of the year.


James Garfield Gardiner: Perhaps in my statement I should have said that the prices arranged for in the contract have been, ever since 1939, the floor prices in Canada. This is the floor price; it is not the highest price a farmer can get in Canada, but he does not get less than this, and my understanding is that from 1939 up to the present he has never got less than the price which can be properly paid for certain grades of hogs under our grading system than the British contract provided for. The other point raised is that there are times when some person somewhere, or some packer somewhere, has considered it perhaps in his own interest to pay a farmer more than the floor price provided in these contracts, in order to get the hogs during a certain period. We have never taken the position that we should say that higher price may not be paid. Probably if we were going to stick exactly to the idea that we must have a stabilized price which brings the same return on the market at all times, we should do that; but I have always questioned whether it would be in the interests of the farmer to do so.


William Scottie Bryce: I have never worried very much about the farmer getting too much; I have always worried about him getting too little. As the minister knows, when we get a flooded market the packer can pay less, and the farmer has to take less because once he delivers his stock he has to take the price offered or take the stock away again, and he does not act in that way. The Minister of Trade an,d Commerce is here with the Minister of Agriculture, and I should like to ask what arrangement he is making in connection with bacon to educate the British people that it is not American bacon but Canadian bacon they are eating. I was over there this year, and I am satisfied that Canadian bacon is the finest bacon reaching Britain to-day. It is as good as the bacon Britain herself is producing, but the people there still think they are eating American bacon. We must do a
TMr. Bryce.]
great deal of advertising over there to educate the people to the fact that this good bacon they are getting is Canadian bacon.


Mark Cecil Senn: The first point raised by the hon. member for Selkirk I think is important. I have here a copy of the order in council setting up the meat board, and under paragraph (e) one of their duties is to fix the minimum prices to be paid by packers or other persons for live stock. I should like to know whether the meat board has even gone into the question which was raised by the hon. member for Selkirk, as to the variation in price from time to time. Have they ever made an investigation, when prices were lower than at other times, to see whether those prices were lower than would be warranted by the prices received for the bacon? It seems to me that is important. Then I agree with the other suggestion made by the hon. member for Selkirk, namely that some kind of arrangement should be made in Britain in order to be sure that when the British people eat our class A or class B bacon they know it comes from Canada. There is another point involved in that. If they are bringing in bacon from Denmark and other parts of the world to feed the British people, I have heard it suggested that they keep Canadian bacon in storage too long, until it deteriorates in quality. When that happens there is trouble and our bacon gets a bad name when it should not. I believe these matters should be looked into very carefully. Perhaps they have been, but I should like the minister to state whether from time to time our bacon has been kept in storage over there so long that it has deteriorated, and as a result did not get as good a name with the consuming public as it should.


James Garfield Gardiner: In reply to the questions raised by both hon. members I should say that rather than stating the duties of the board, the order in council gives the board certain powers.
Mr..SENN: Yes.


James Garfield Gardiner: To be candid, we saw to it that the board was given all the powers we expected they would require or might require in order to enforce any regulations that might be brought into operation. The reason for the power which has been just recited to the committee was the fact that we did want to keep check all the way through on packers and others who were buying hogs, to see to it that they did pay prices which bore a proper relationship to the British contract, the floor price; and we did keep that check all the way through. I am told by the meat board that at no time, even when we were shipping the greatest quantities of hogs ever shipped to

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this market, which was through 1944, was that floor broken by those buying hogs for shipment to Great Britain. I should say, however, that we had two periods during which there were strikes; two, at least and perhaps one other. During those periods, while it was true that the hogs were not bought at prices below the floor, the farmers did have to keep hogs on the market for days and perhaps pay the cost of keeping them there, which meant that the farmer got a lower return than the price should have netted him by the time he was able to sell the hogs, which perhaps had also lost weight. I would not say that during the whole period of the contracts the farmers did not have to take a return that netted them less than the floor provided, but that was only for limited periods while we had difficulties because of strikes, and those periods were as short as we could make them by action taken to bring the strikes to an end.
On the other question, of the British knowing what they are consuming, during the war there was a period when I think we were supplying as high as 85 per cent of the importations, as these figures show. We did try to make it known to everyone during that period of time that most of the bacon on the British market was Canadian bacon. All the bacon is stamped, of course; but as everyone knows the housewife does not see the stamp. Probably the rind is taken off, or if it is left on the bacon is cut in strips, so the word does not appear. We had complaints that bacon supplied to our own armed forces was Canadian bacon and was not up to standard. We had other complaints as well. All those complaints were investigated, and in each case where it was fat bacon it was found that the bacon had been supplied from the United States or elsewhere, where, it is customary to produce that kind of bacon. I would not say it is inferior to our bacon, but it is not the type of bacon the British like, and is not the type we produce. On each of those occasions we were able to show that it was United States bacon. Only yesterday I had a letter from one of the leaders of one of the farm organizations in Canada. He has just returned from Britain, where he addressed twelve meetings. He said this question came up at every meeting; at the end of the meeting they started discussing this heavy bacon, and on each occasion he was able to satisfy them that it was American and not Canadian bacon. On the other hand he tells me that the same discussion took place with regard to our beef, with the British saying that the beef they are getting is cow beef. That is perfectly right; most of the
beef they have got in Canada is cow beef. The British who are purchasing it know that they are paying a lower price than for red or blue brand beef, and they are taking it in greater quantities. So as long as they themselves know what is going on I do not think there should be any difficulty.
Then there was the other question, as to whether our bacon is stored too long. Immediately after the war stopped the Danish people started to move their mild-cured bacon into Great Britain. Well, of course if you put mild-cured bacon in Great Britain alongside Canadian heavy-cured bacon, in order to meet the situation existing in England, our bacon would be at a disadvantage.
We sent Mr. Pearsall to England more than a year ago to go into that one question with the British people. He pointed out the unreasonableness of their buying our bacon in large quantities and requiring us to put it under heavy cure in order that they might hold it and distribute it over a period of time, to make the quota possible, and not using the Danish bacon in the same way. The result was that the British themselves brought in regulations which made it necessary for the Danish people to supply bacon which would keep as long as the Canadian, with the same cure. So that from that time forward Danish bacon going into Great Britain has had to meet the same conditions as Canadian bacon, and be cured in a manner which will make it possible for it to be carried as long as Canadian bacon can be carried.


Major James William Coldwell: Are the curing houses which were destroyed during the war being rebuilt on the east coast, opposite Denmark, or are some being built on the west coast? When I was over there several years ago I was told that one of the factors in heavy curing from Canada was that the smoke houses were on the east coast of Great Britain, and it meant a haul across the country by ordinary freight, with additional risks to the bacon.


James Garfield Gardiner: The hon. member is referring to the curing houses in Great Britain?


Major James William Coldwell: Yes. In view of this long-term contract with Canada I think some pressure should be brought to bear to get that advantage, which the Danish people have.


James Garfield Gardiner: We have no information
on that. I believe the hon. member is referring to tlhe places which were destroyed on the Thames, for example.


Major James William Coldwell: Yes.

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James Garfield Gardiner: They are on the river, is one comes into London. I believe the smokehouses are being reestablished there.


Mr. WRIGHT:: The minister's statement has been most interesting, and certainly clears up much of the misinformation, if I may so describe it, which has appeared in the press respecting the differential between the Canadian price and the Danish price. I believe there is still a big problem facing us in Canada if we are to meet our obligations or requirements with Great Britain in 1948, and in other years. The figures given by the minister indicate that our production is dropping, while Danish production is going to increase. Eventually if that trend continues we shall find ourselves again in a position of having a smaller portion of the British market. There are certain things which I believe we have to do in Canada if we are to maintain production. In the last year our production has dropped tremendously, and there is not very much indication that it will increase in 1948, to meet our contract. As a matter of fact in July of this year the production of bacon in Saskatchewan was only one-sixth of the amount produced in the same month in 1944, and half the amount in the same month last year. This indicates a tremendous reduction in production, and indicates also that unless there is a change we shall not be able to maintain our exports this year, let alone increase them for 1948.
To a great extent the Danish people produce bacon from feed that is imported. Before the war at least some of that feed, a fair proportion of it, was imported from Canada. Our freight rate structure was such that the export freight rates on coarse grains allowed the Danish feeder to obtain that feed in Denmark cheaper than feeders in Ontario could secure it. During the war we overcame that by subsidizing freight rates on feeds from Port Arthur to eastern Canada.
I suggest the minister should give some indication of what steps the government is going to take to try to increase the production of bacon in Canada to meet the contracts we are entering into. The portion of the country I represent has been one of the greatest hog-producing areas in western Canada; yet I have been alarmed at the complete disappearance of hogs from the farms in that area in the past year, and at least at the present time I can see no indication of the farmers there getting back into hog production. It is a serious situation; it means that we shall have to depend upon one crop in that area, just as they do in southern areas of Saskatchewan. There is no indication at present that this trend has stopped, or that in that area we are 
going back into hog production. Has the government any policy in connection with increasing hog production in Canada to meet these requirements?


James Garfield Gardiner: 
Percy Ellis Wright: I should like to point out one way in which I believe increased production could be obtained in the west. The price differential obtaining in the markets of eastern and western Canada should be wiped out. In my estimation there is no justification for hogs selling at one and a half to two cents per pound more on the Montreal and Toronto markets than they do on the Calgary, Winnipeg and Edmonton markets. The government is paying the freight on grain from Port Arthur to eastern Canada which is used for the feeding of hogs. If the government are prepared to do that in order to assist the feeders in eastern Canada, they should be prepared to absorb the freight on the finished hog from western to eastern Canada and thus cut out the differential between the eastern and western markets. If the farmers in western Canada were obtaining that extra cent and a half per pound that is received on the eastern market, production in the west would be increased and that would help you to meet your quota.


Mr. FAIR:: The question raised by the hon. member for Melfort has been discussed to a considerable extent in my part of the country. The people are using the argument that if the government see fit to pay the freight on feed grain to eastern Canada there is no reason why they should not arrange for a levelling up of the prices as between the eastern and western markets. I think the frost that we recently had in the west will help the production of hogs and cattle. If the grain harvested had been high grade there certainly would have been some decrease
in production as compared with 1944 and 1945, but as things now stand, and as has been pointed out by the Minister of Agriculture, hogs will be raised in order to consume the lower grades that will be harvested in the west. Following up what the hon. member for Melfort has said, I should like to ask the minister to consider the levelling up of prices at between eastern and western Canada.


Mr. BURTON:: I do not intend to get into a controversy with the hon. member for Melfort as to which district produces the best hogs or live stock. I will concede that they have made .quite a business of it, but the district I represent has been in mixed1 farming ever since it was opened up. As has happened in the Melfort area, there has been a sharp decrease in the production of hogs in the Humboldt area. This is not the result of a lack of feed, which is the cause advanced by the minister in connection with his constituency. Farmer after farmer with considerable quantities of feed on hand has reduced his production of hogs during the past year or two; some of them have gone out of production entirely. In that area at least it is not a question of feed; this decrease in production is due to dissatisfaction among the farmers over the methods that have been used, as have been referred to by the hon. members for Melfort and Battle River.
I urge the minister to give careful consideration to the suggestion made in that respect by the hon. member for Melfort. In case there is any hope that the early frost might bring about an increased production of hogs I would point out that a frost during blossom time, which was when this frost occurred, does not give you pig feed. When a frost occurs at that time that is the end of it as far as grain is concerned. In all probability the wheat would be used for forage purposes in the production of live stock, but it will not produce pig feed.
There is another thing I should like to discuss with the Minister of Agriculture and the Minister of Trade and Commerce. I should like to know just where the Canadian meat board ceases to have control, of our bacon for instance. Just how much follow-through is there? How much control have we over this product so that we can say that this is top-grade Canadian bacon? If we are not able to follow this through to the consumer we may run the risk of having inferior bacon placed on that market. In my opinion the meat board should be able to place this product in the hands of the distributors in Britain and say that it is top grade Canadian bacon. While I
47S8	COMMONS
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am not an expert on this matter, I know that the manufacturers and distributors of automobile tires put out a certain grade of automobile tire which is their top grade. They may even have a second grade tire. These same manufacturers of automobile tires manufacture tires for mail order houses and so on, but they are as jealous as they possibly can be of their trade-marked product. In supplying bacon to the best and largest customer we have we should see that our top grade product is put into the hands of the distributor and kept under control in such a way that no other bacon, even inferior bacon from our own country, can be slipped in to the detriment of our trade.


James Garfield Gardiner: In answer to what has been said I would say that we always deal with the government of Britain in making these contracts. The food ministry not only buy all the food that comes into Britain; they control all the food produced there and its distribution. So long as there is a food ministry in Great Britain which is rationing food and distributing it, they will not permit this government or anybody else to advertise anything in Great Britain. They do not permit us to go in and say that our bacon is better than or as good as the bacon produced by anybody else. The British government take all the bacon and ration it out at the rate of so many ounces per week. The people in Great Britain have to take what they get from the government. The British government will not allow us to go in there and say, "You are handing out American bacon to the people and you ought to be giving them ours.'' That is what advertising really amounts to. That is what you accept when you accept government control of the marketing of any product. I suggest that probably it is not very good socialism for us to go and tell the British government what to do. They are taking all they produce and all they import and are distributing it among their own people, saying: This is your food.


Joseph William Burton: That is just a temporary condition.


James Garfield Gardiner: It has been pretty long drawn out, for six years at least, and is likely to go on for three or four years more according to the contracts they have entered into. Some people hope it will go on for ever, but I do not know that I do.


Major James William Coldwell: New Zealand butter is branded.	.


James Garfield Gardiner: Ours is branded too, and we brand our bacon. It has "Canada" stamped all over it. I doubt whether a pound of

butter would get out to householders in Britain in the carton, because so many things are sold by the ounce there, and most of the butter is served in little sections in hotels and restaurants and so on; so that the people know very little about where the article they are eating comes from. That is bound to be the case so long as they regulate the distribution of food, and there is not much that we can do about it. But we have over there four inspectors who inspect everything that arrives in Britain and report back to us whether it is in good shape. We had six inspectors over there prior to the war. We also had men over there recently who have just come back and reported to us. The hon. member for Selkirk reported to me personally what he told the committee a few minutes ago. He and I were both over there last January. He is more of an expert on bacon than I am, and made more investigations than I was able to make. He reported to me there, as he has reported to the committee to-day, that the best bacon he found in Britain was Canadian bacon. As long as we can keep up to that standard we are doing everything possible under the circumstances.


William Scottie Bryce: The people over there do not distinguish between American bacon and Canadian bacon-just as when we were coming over here we used to say: "We are going to America."


James Arthur Ross: I wish to support the hon. members for Melfort and Battle River in their suggestion that something be done to counterbalance the assistance that is given on feed grain coming east. The present policy does not encourage the production of hogs.
I agree that there is some demand for breeding sows in areas where the crop has been frozen, but that is only a temporary condition. In Manitoba there has been a far greater decrease in the hog population in the last two years than in any other area in the west. There is plenty of feed grain in the province, so it is not for lack of that. It is because of a combination of circumstances, possibly because of income tax as much as anything else, and also the price of grain, that people have been driven out of hog production. You can go through my constituency to-day and you will never see a brood sow on a farm where they were producing many hogs all through the war years. I think the department will have to change its policy, and the suggestions made by the hon. members are along the right line to encourage hog production at least in western Canada. It is essential that we should encour-

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age the production of more hogs in that area, and I hope that the minister will consider the suggestions very seriously.


Mr. WHITE (Middlesex East):: As to
the bacon deal with Denmark, it seems to me that at the end of 1948 Denmark will have been encouraged to produce bacon and will be in position to supply the demand, and the Canadian producer will find himself out on a limb and will be forced to take a much lower price than the contract now calls for. Feed costs enter into the production of hogs. Many farmers in my area are much disappointed over the price of Ontario wheat. Fifty years ago you could hire a man at S1.25 a day, and a bushel of wheat was then selling at SI.25.	It	is still selling at	$1.25	but youhave to	pay	a man $1.25 an	hour,	and thefarmers	are	getting into a	very	difficult
position.


Percy Ellis Wright: I do not think wre have anything to fear in Canada in regard to the production of bacon. I am positive, from my observations, that we can produce bacon as cheaply in western Canada as anywhere. We grow the grain right fhere, and we have everything that is needed for efficient hog production. Given equal conditions, with farm machinery and the different things we need for hog production selling at a competitive level as our products must, we can produce bacon with any other country in the world and market it in as good condition as theirs. But when all these other factors which enter into our costs are interfered with, the machinery of production is thrown out of kilter and you do not get the production. That is why I am interested in seeing that the price received for bacon in western Canada is made equal to the price on the market in eastern Canada. The people of Canada are going to pay the freight rate on feed grain from western to eastern Canada, and I say that the man who is feeding it in western Canada should be given an equal opportunity and get the same price for his product. That would seem to me to be only fair.


Mr. McCULLOUGH (Assiniboia):: I rise to support the suggestions of the hon. members for Melfort, Battle River and Humboldt, and to take exception to two of the reasons the minister gave for lack of hog production in the west.


James Garfield Gardiner: I was going to correct that. I said that the shortage of feed was one of the factors. Then there is the difficulty of getting labour. Some people would rather 63260-302
have what they receive for their grain than what they receive for their hogs. Whether the price of one is higher than the price of the other is not the question. It is more difficult to get it through hogs than through grain.


Edward George McCullough: I still take exception to what the minister said. 1 come from an area in Saskatchewan where we produce a lot of live stock. Our hog production in that area was high in the early part of the war. One reason for the western farmer going out of hog production is the price, but we have many other reasons. When the government wanted bacon for export, our farmers went into heavy hog production. We built electric fences, put in self-feeders and brooder houses, and altogether went into hog production on a large scale. Then we found that the government came out with its bonus of ten cents on oats and fifteen cents on barley. Labour and other costs of production make hog production no longer feasible, and that is why the western farmer went out of hog production. The time has come when we must have a national live stock programme which will give to the western producer a decent return, and not merely for hogs, comparable with that received in eastern Canada.	'
One of the chief points the minister brought out was that unless we can keep up hog production in Canada to meet the 400 million pounds which I think is the agreement we have with Britain, Britain will go out and seek food from Denmark. If we want to keep the British market I think we shall have to launch a programme for Canada, and not merely do what the minister apparently has done. It seems to me that mother nature comes to his rescue very often. Now it is doing so again in the form of frost; he says there is going to be a lot of wheat in western Canada which may only be useful for feeding to live stock. I remember that last year, at the end of the agriculture debate in this house, the minister said we had all the live stock in Canada that we could feed with the available feed on hand. I might point out to him that from that time until the present we have been shipping out from western Canada coarse grains suitable for live stock production; up to this time it has not been a matter of feed but one of price. I want to urge so strongly as I can the adoption of the recommendation of the hon. member for Melfort, that the western farmer should get a price comparable to that paid to the eastern farmer.



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James Garfield Gardiner: I want to correct one
statement of the hon. member. There has been an embargo on the shipment of feed grain out of Canada.


Edward George McCullough: I said, out of western Canada.


James Garfield Gardiner: Out of any part of
Canada. We are talking about producing live stock. The only feed grain that went out of Canada was the grain which was shipped after we were urged from every part of this house and from every part of Canada to let some oats go to Europe to feed people there. We have stopped all grain going out of this country, and all the grain has been fed. You could not feed any more live stock no matter what you did; all the grain has been fed; and to-day I am going to ask you in a few moments to put through estimates for the storage of grain in western Canada to feed the live stock that is there. We paid out hundreds of thousands of dollars last year to store grain in the elevators at Moose Jaw, Saskatoon, Calgary and Edmonton, to prevent its being shipped out of there at all, to keep it there to feed live stock in that area; and it has all been fed. We cannot find any barley. There is a small quantity of oats that we could ship out, but we cannot find any barley or any feed wheat to ship anywhere, whether outside Canada or inside Canada. The situation is that the grain has been fed. Well, if it has been fed, I do not see how you could feed any more live stock, no matter what you did. If it is a question of thinking that we ought to have more feed grown in Canada, probably we could get more feed grown by following some practices; but again, that would not meet the wishes of a lot of people who just a few months ago were saying that we ought to be growing wheat to the exclusion of other things, in order to feed people somewhere else in the world.
I agree with hon. members who have spoken that we have to pay a little more attention to the people who live in our own country than some of us have been tending to do in the last few months. To say that we should not grow any grain in western Canada to ship to eastern Canada is, I think, going a long way. I do not think it is a bad thing for the farmers in western Canada, when we give them the extra ten or fifteen cents on their oats and) barley. Up to that time we were getting 67 per cent of our share of the income of the farmers of Canada as based on experience of 1926-29; and when we put the fifteen cents on barley and the ten cents on oats, and put up the initial price of wheat,

we got into the position that we should occupy in relation to other farmers. We are a grain producing area. Grain is the natural thing for us to produce, and we can produce it. We have to have a market for it, and the best market for our feed grains is in western Canada. At the present time the best market would be in the United States, but if the grain went to them you would not be able to feed hogs either in eastern or western Canada. Usually the best market has been in the east, and we have been promoting the shipment of our grain from west to east. As long as we keep our present controls I do not think we can market it, to the advantage of the people generally, anywhere else.


Edward George McCullough: I would just like to- answer the minister for one moment, when he said that I said coarse grains had been shipped out of western Canada.. You cannot have it both ways.


James Garfield Gardiner: There are no coarse grains shipped out of the area west of the Sault line. We absolutely corralled it there.


Edward George McCullough: Three or four hon. members 'have said that their areas have been large hog producing areas. My own area is similar, but I can say that farmers in our constituency with oats in their granaries have gone completely out of hogs. If we want to have mixed farming in western Canada, if we want to have what we call a stability in agriculture, and mixed farming, to which many of these areas are adapted, if not perhaps the big grain sections, we must have a policy under which the farmer can have some trust in government policies and will know over a period of years that he is going to be able to get a fair return for the type of farming he undertakes.


Mark Cecil Senn: I believe that the retention of the British market for bacon is very important. During the first great war we did get a fair market over there; we were shipping between 126 and 135 million pounds of bacon. We did not keep that up, and I think it is very important that, since we now have that market again, we should do everything possible to retain it.
I am not finding any fault with the suggestion which has been made by our western friends that there should be some method of equalizing the prices received for hogs by the western farmer and the eastern farmer. If that can be done, well and good. On the other hand I would not like to see the freight rates which have been paid by the government up to the present time on feed grains coming from the west cut off. We cannot afford to pay the freight rates in addition to the prices

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we have to pay for feed grain and raise hogs at a profit, and I am afraid there would be very little grain coming from the west to the east to feed the hogs unless we had that freight rate consideration. So we must keep that if we are to maintain our hog production in the east.
It is very important that we continue to hold the British market to the extent that we now have it, and I suggest to the western farmers, no matter what they may do, not to try to take away that freight rate subsidy from us in the east.


Robert Fair: May I say that there was no thought or desire on the part of western farmers to disturb the freight rate position as regards the eastern farmer; we are just asking that there be an equalization of price. Also I wish the Minister of Agriculture would whisper in the ears of the Minister of Finance and the Minister of National Revenue that as soon as they get the income tax levy down to where it properly belongs, they will have more hog production and possibly more grain production.


Mr. QUELCH:: It has been suggested that the government might bring in measures to persuade farmers to handle their operations in a different way, perhaps to raise more hogs and less grain, or in particular less wheat. Personally I should not like to see that policy adopted, because generally speaking the farmer knows the kind of crops he can raise best. The part of the country from which I come is strictly a grain country. We buy our coarse grains and then raise hogs; generally speaking it does not pay us to grow coarse grains; it pays us better to raise wheat and sell it. The eastern part of my constituency will probably have another crop failure, and they will have to go out of hogs because they have not got the feed.
I believe that the best way to encourage the raising of hogs is a long term policy which will guarantee the farmers a fair price for hogs over a period of time which will enable them to adopt labour-saving methods. They have the most modern labour-saving machinery with which to grow grain, but few farmers have proper facilities for handling hogs, and therefore it means a lot of labour.
At one o'clock the committee took recess.
The committee resumed at three o'clock.
Mr. TOWNLEY-SMITH:	As in other
western areas, hog production in my constituency is down. I agree writh those who said that they thought the price factor was the main 63260-3021
consideration. The low production of pigs in my part of the province has not been brought about by the shortage of feed. It seems to me that if people who are producing hogs are short of feed, apart from the question of crop failure or something of that kind, it indicates poor farm management. But as I have mentioned, the important thing is the price factor. We have a fixed price for bacon, but there is no fixed price for hogs. That also has a bearing on the situation. If in some way we could assure the producer a fixed price for his pigs we might have better results, depending, of course, on whether the fixed price was sufficiently high.
At the present time the price is fixed for Wiltshire sides, f.ob. ..Canadian ports, and it does not vary from day to day; but we find that on the market the price for the live product does vary. I should like to quote from the last report of the Live Stock Market Review of August 1, which was placed on my desk some time ago. In that review we find these headings:	"Toronto Hogs Gained
Twenty-five Cents. Winnipeg Had B1 Hogs Higher at $18.85. Calgary Reached a New High. Edmonton Advanced. Prince Albert Closed Higher. Moose Jaw was Firmer. Vancouver Had B1 Hogs at $19.75 to $20.70." Why these changes? There has not been any change in the basic contract price. Did the freight rates go up? Did insurance go up? Did labour costs go up? I do not think so. Why should there be this variation on the market from hour to hour and day to day?
There is another point I should like to touch on, namely, the drop in price which is contemplated from the present to 1948. This morning the minister told us that $22.50 was to be the floor for 1948 and the price was to be negotiated. Unfortunately my experience has been that the floor has been the price. We do not seem to be able to get a price much higher than the floor when a floor price is fixed. I wish to point out that the drop from the high point of $25 to $22.50 means a drop of $2.50 per hundredweight., which is roughly $3.50 per hog or an average of ten per cent, if the $22.50 happens to be the prevailing price. The packers will prepare for a drop of this kind by paying a lower price for hogs in the fall of 1947. That is the natural thing to do.


James Garfield Gardiner: The new price will be negotiated before that.
Mr. TOWNLEY-SMITH: I was about to ask the minister when the negotiation would take place. If the farmers in their turn had no information of the price they would have to prepare for a lower price in the breeding

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season of 1946, which means the winter of this year. Will the price be negotiated by that time?
The raising of pigs is a long term proposition. They are not turned out as material is from a factory bench, a lathe or anything of the kind. It takes time to raise hogs. The minister has already answered what I wanted to know, and what I wanted to have on the record, namely, when these 1948 prices would be negotiated.
I come now to the matter of feed costs. We have an extraordinary situation in the wrest. We have bonuses given for our oats and barley. Let me give an actual example. In my district a farmer had a bin full of barley. When he hauled it to the elevator he received fifty cents a bushel plus a fifteen-cent bonus, a total of sixty-five cents. Therefore when he fed it to his pigs he was feeding sixty-five cent barley. His neighbour did not grow any barley but had some pigs. He came to the farmer who grew the barley and bought some from him at fifty cents a bushel. The original owner of the barley went to the elevator officials and collected his bonus of fifteen cents, which is the normal procedure; but the second farmer'fed his pigs fifty-cent barley in competition with the original grower who fed sixty-five cent barley. We have some of these extraordinary situations and they should be cleared up.
I should also like to join with those who have spoken in an endeavour to get a form of equalization to compare with the free freight which is being paid on feed going to the east. We are in competition with the freight being paid to the eastern feeder, and we feel that similar compensation should be given to the western grower so that when his hogs are shipped they should receive some help in the way of freight assistance. If that wrere done, the producer would get a little more for the hog carcasses when he produces them. When the eastern grower gets free freight on the feed he also gets a higher price for his pigs, because they are closer to tidewater. There is no long freight charge to be paid on the carcasses, which is the difficulty that the western grower runs into. Some consideration commensurate with the free freight which the eastern feeder now gets should be given to the western grower to help him meet the situation.


Mr. ARGUE:: I wish to bring one point to the attention of the minister, but before doing so I should like to say that I agree with my colleague that the man who grows his feed and attempts to raise hogs is being discriminated against in that his feed is worth
fMr. Townlev-Smith.]
more and costs more when it is put into the production of hogs than it does to the feeder across the road. One way to get around that is to give the man who raises hogs and feeds his own feed an additional price on that account when he sells his hogs.
The point I wdsh to raise is in connection with the subsidy payments. If a farmer wants to buy feed from his neighbour, in order to obtain the benefit of the subsidy he-has to haul the grain to the elevator. I have had one instance brought to my attention. Last winter cattle in a certain district were almost starving, owing to the severe winter and a short crop the previous year. One farmer had to buy five hundred bushels of oats from his neighbour. In order to get the benefit of the ten-cent subsidy he would have bad to haul the oats sixteen miles to town and fourteen miles back to his neighbour's farm. That was impracticable, because the roads were blocked for truck travel and there were no horses available at the time. Could some method not be devised in which perhaps a councillor in the municipality, or some other reliable man, could weigh the feed in such an instance, so that the grower of the feed or the two men concerned might take advantage of the subsidy?


James Garfield Gardiner: That has been the case for the last two years. In any area where there is a scale at all if they can get the recommendation of the municipal secretary or the elevator operator in town, or anyone who is satisfactory to the wheat board, they will accept the weights on those scales. That has been the situation.


Hazen Robert Argue: There would have to be a large scale, on which a truck could be driven, would there not?


James Garfield Gardiner: No, just an ordinary scale, where you can weigh two or three bags of grain, any scale that is reasonably safe.


Hazen Robert Argue: In this particular case the farmer applied for the subsidy, which he was paid. After the case wras reported he had to refund the subsidy because he had not gone through the proper channel. I just want to bring this to the attention of the minister.


James Garfield Gardiner: They could have made an application to have some person appointed as official weighman, someone who has a scale. Any scale would do of the type you find on the farm, with the beam and platform on which you can weigh two or three bags standing up or ten bags piled one on top of another. That kind of weight is accepted.


Hazen Robert Argue: I am glad to have that information from the minister, and I hope

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the farmers are given an opportunity to learn the situation so they will be able to take advantage of this provision.


Mark Cecil Senn: I should like to address one or two questions to the minister before we pass this item, but first I want to know whether this question is relevant; it may not be. When the minister was speaking this morning he mentioned the fact that more of the cheaper grades of beef were going to Great Britain, and that they were paying lower prices accordingly. Recently an order went through permitting higher prices on certain grades of red and blue brand beef. I believe that order was issued by the wartime prices and trade board, though I am not certain of that. I should like to know just what is the relationship between the boards enumerated here and the wartime prices and trade board. Surely the wartime prices and trade board does not set prices on farm products of all kinds without in some way consulting with these other boards which are vitally interested. I understand that the meat board particularly has to do with export prices, but I also notice that in the order in council setting up the meat board it says they are to determine prices to be paid packers or other persons, and as well to establish differentials in prices which will be paid for different grades, selections and weights of various kinds of meats. That may be for export; perhaps that is what was intended, but it does not definitely say so. There is a real grievance at the present time on the part of the smaller slaughterers through the country, who say that because they cannot get official inspection they are not able to obtain the higher prices which are paid for the red and blue brand beef. I should like to ask the minister if this board or any of these boards have anything to do with that, or whether it is entirely a matter for the wartime prices and trade board.


James Garfield Gardiner: Prior to 1943, I think it was, the wartime prices and trade board provided all the subsidies, that is, producer subsidies as well as consumer subsidies. In 1943 we set up the food board, which is dealt with in these estimates. Under the arrangements then made the food board provides for the subsidies to producers, what are called the producer subsidies designed to increase production, and the prices board deals with any' subsidies that are paid having to do with consumers, to keep down costs to consumers. That division was made at that time. As far as the provision of food for the Canadian people is concerned the prices board have the final authority and final responsibility. That is, they are supposed to see to it that sufficient food is left in Canada to properly feed the
Canadian people. If it is found necessary, as has been the case in connection with some products, to impose rationing, then the wartime prices and trade board looks after the rationing, and they must have the responsibility for saying whether or not sufficient food is being provided to the food distributors in Canada to make that rationing possible; and to that extent they have control. When it comes to the practical handling of it, any time we find that costs of production are not being met, or any time we feel they are not being met, the board having to do with the product in question negotiates with the prices board in order to have that situation adjusted. There are two ways in which that adjustment can be made, from our point of view. One is to give a subsidy to the producer; the other is to increase the price to the consumer so that higher returns may be obtained. Whenever it is considered necessary to get higher returns by increasing prices, that is discussed with the prices board, which makes the final order in that connection and enforces it.
That is what really happened in connection with beef. About two or three months ago there was widespread discussion as to the reasons for beef not appearing on the market. As a result of those discussions the prices board eventually raised the prices of the higher grades of beef, that is blue and red brand beef. As a result beef again began to move on to the market, in much greater quantities; and the beef has been sold practically at ceiling prices. I am informed that within the last week or two the experience has been that the Canadian people are inclined to eat beef that costs less, rather than to eat the red and blue brand beef. In other words, there is always the possibility of getting your prices so high that the consumer will say, "If I must pay that price I shall eat something else." The consumers have reached that point now, apparently, in regard to red and blue brand beef, and we are being offered beef of these higher grades to send to Britain at prices considerably below' ceiling. I just throw that out as a suggestion to those who talk nothing but price. There are limits to what you can do even in connection with price. When we start asking people to pay certain prices for commodities, they may refuse.


Mark Cecil Senn: I was not finding any fault whatever with the price. I was trying to get some information as to the basis on which, that price is set.


James Garfield Gardiner: Just to make that clear I would add that our boards naturally have the responsibility of seeing to it that the producer gets what is coming to him. The

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prices board has the responsibility of trying to see that the consumer gets the food, at a price within what they consider the cost of living; or, to put it in another way, without too greatly increasing the cost of living and thus bringing about inflation. On the other hand we are urging that the farmer requires a certain thing, just as lion, members in this house are urging me that the farmer requires a certain thing. Our officials and theirs sit down together and thresh that thing out. When they come to a conclusion, it is the prices board that enforces their decision.


Mark Cecil Senn: I think I understand that very well, Mr. Chairman. A short time ago the minister made the statement that there was a tendency on the part of the people to eat cheaper beef. As a matter of fact the people out in the country, who are some distance removed from the abattoirs, have to eat cheaper beef, because the local slaughterers- and there are quite a number of them-cannot buy the red and blue brand beef, for the reason that they cannot charge the extra two cents which the abattoirs are allowed to pay and obtain. As a result all the good beef is being driven into the hands of the abattoirs. I can readily understand that perhaps the abattoirs cannot find a market for it all, because the people in many towns and villages where there are no abattoirs are eating commercial beef and beef of lower grades. I do not think it is altogether fair to the local slaughterers that all this trade should be driven into the hands of the larger packing houses.
The minister said it was the duty of the wartime prices and trade board to see that the people had enough to eat. They have a low quota on hogs which can be slaughtered out in the country. The minister has a contract with Great Britain to provide a certain amount of bacon to go over there. I suppose on the other hand the wartime prices and trade board are trying to see that the people of Canada have enough pork to eat. Who studies that question? Why should the local man out in the country be discriminated against by a very low quota, which is reduced from time to time, of hogs which he can market? It does not seem fair to the man out in the back concessions or the men who slaughter for local consumption in the towns and villages throughout the country.


James Garfield Gardiner: I would assume there is a line somewhere between cities and towns, and what might be called back concessions, where what has just been stated is probably true. In other words if you ship cattle to Toronto you have to ship beef back out. if

you do it one way. The other way is to buy the cattle where they are produced, slaughter them there, and sell them to the local people. They have far more leeway than the difference in price; they have the cost of freight both ways to work on. There would be some point out of Toronto, for instance- probably ten or fifteen miles, I do not know how far it is-where it would pay better to come in and get beef than to kill it out there. But I do not think it will be found that out in the country, or in those sections which might properly be called the back concessions, they are being denied the right to eat good beef. I think it will be found that to the extent they are allowed to eat beef at all, they are eating just as good beef as is being eaten anywhere else. But there is this about it, that if we are going to ration meat, something which apparently everyone wanted a few months ago, we have to say to those districts which are more or less outlying, as well as to the cities, "You can eat only so much"; and the only way that can be done effectively in outside areas is to say that the butcher cannot kill any more now than he killed at some other time. He is the distributor of beef. Even then it cannot be enforced effectively, because someone will kill his own beef and cat it.


Mark Cecil Senn: There is no quota on the slaughtering of beef, as I understand it.


James Garfield Gardiner: There is a quota on meat; meat is rationed. In order to have it distributed, encouragement is offered so that the meat we wish to ship out of the country will come to the central abattoirs, where the plant can be properly inspected, where the meat can be assembled and arranged in carload lots to be taken down to the ships. You cannot pick that meat up outside, but you have to give encouragement' to get it in.


Mark Cecil Senn: I was finding fault with the local trade.
Mr. LENNlARD: As one who is interested in veterans affairs there is one matter I would bring to the attention of the minister which I believe is not working out fairly. I know of many cases, and I have one in mind particularly, that of a young lad who before the war was a slaughterer for his father. He joined the army at the beginning of the war and was a butcher overseas with the army. Upon returning home he applied for a slaughtering licence, but because he was not slaughtering before 1941 he has been denied the licence. Yet I know of several young lads who did not enter into any of the services who began slaughtering after the war broke out and who

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are to-day working on quotas. They are allowed to slaughter. This is most unfair. Those lads went overseas and spent three or four years in the armed services, but upon returning home they are denied the privileges which others who remained at home and did not join any of the services are enjoying. This is something the government should consider.


Mr. MENARY:: I should like to support what has been said by the hon. member for Wentworth. In my own constituency I have been trying to get a similar permit for about six week-it would be operative in the town of Palmerston-but I have not succeeded. These boys should receive every consideration; anything that can be done to help them should be done.


James Garfield Gardiner: This is a matter under the control of the wartime prices and trade board, and it can be discussed when their estimates are before the committee. However my understanding is that each case is considered on its merits, and that most of them have been put through.


Some hon. MEMBERS:: No, no.


James Garfield Gardiner: It is all very well for hon. members to shake their heads. I know some of mine have not gone through either. But because two or three members have not received favourable answers there is no reason to suppose that most of them do not go through. I cannot discuss this effectively, because it does not come under my department; but there is some special reason.


Frank Exton Lennard: I have a letter here,
the last paragraph of which I shall read. It is from F. S. Grisdale, the administrator of meat and meat products, wartime prices and trade board.


James Garfield Gardiner: When the board is before the committee that can be discussed.


Frank Exton Lennard: The minister has said
there was some special reason, and I should like to read this paragraph from the letter:
It is regretted it is not possible to be more generous in granting slaughtering permits, particularly to returned soldiers, but the necessity of doing our utmost to fulfil our shipments of beef and pork to the United Kingdom does not permit of this.
In my opinion that is a weak argument, because in any part of the country it is a matter of supply and demand. I do not consider it strengthens their position at all to make a statement of that kind, because there is only so much meat to be consumed. If there are more slaughterers there might be
less beef for each one to kill, but it is a shame these returned men have been denied this privilege.


The CHAIRMAN:: It has been pointed out that this matter of slaughtering does not come within the scope of the item under consideration. I would ask hon. members to discuss it at the proper time.


Robert Fair: Has any action been taken
by the government to place a floor under the price of live cattle on the market? I am fully aware of the fact that there is a price of which the packer can take advantage. But there is no protection for the farmer or the producer in respect of the price he may receive for live cattle on the market.


James Garfield Gardiner: There is exactly the same floor under beef as there is under hogs. Or, to put it another way, there is exactly the same floor under cattle as there is under hogs. The actual floor is under beef in one case, and under bacon, ham and pork in the other. The department has kept a close check on the relationship between the price of cattle and the floor price of beef all the way through the picture; and generally speaking it has been very satisfactory from the point of view of those who were interested in keeping the price of cattle up to its proper level.
I would not say what I said in connection with bacon-because we have not had the same control over it-that there has not been any time, except when the strikes were on, w'hen they have had to take a loss. I probably would not be correct in saying that with regard to beef. Generally speaking, however, I think that statement is true.


Robert Fair: It seems to work very well until there is a rush of cattle on the market in the fall. Then the farmer or the rancher has to take a heavy loss for which there is no justification.


Mr. ZAPLITNY:: I believe the hon. member for Battle River has made a point. Can the minister tell us what percentage of the value of meat marketed goes to the farmer, and what percentage goes to the meat packer?


James Garfield Gardiner: The term used was "meat" and I do not know whether what I am going to say will cover all meats.


Frederick Samuel Zaplitny: Hogs in particular.


James Garfield Gardiner: The general position is that 83 to 85 per cent of the value of the animal goes to the farmer, that is of the price that is paid eventually. The rest is divided among the transportation company, the commission men, the packers and so on.

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I am not in position to say what is the exact amount the packer gets. I assume that could be had, but I have read statements that have been got out continuously and which were checked) as closely as they could be and my understanding is that so far as the larger packing plants are concerned a quarter of a cent represents anything that might be called profit, even outside profit, that they obtain on bacon or on hogs. I could not go through the whole range and tell what it is on each item. I just happen to remember that one from the figures given to me on a previous occasion in connection with a discussion in the house. Their argument is that there is not very much room for the farmer to gain in the way of a return out of a quarter of a cent a pound. If the packer handles a sufficient volume he may have a considerable amount of money which appears in the form of profit, but to the individual farmer it would not mean very much. I know that is no argument against the fact that it should be an eighth of a cent instead of a quarter; maybe an eighth of a cent is enough and I could not argue that point at all, but that is the figure that is used as a rule.


Frederick Samuel Zaplitny: On what is that percentage based? At what point are those figures taken-when it is marketed, or processed, or weighed in?


James Garfield Gardiner: The meat board is taking these products and exporting them and 83 to 85 per cent of what they cost laid down at the point from which they are moved to Britain goes back to the farmer.


Mr. CARDIFF:: How much has the export trade been speeded up since rationing came into effect?


James Garfield Gardiner: It would be impossible to show that there has been an increase in exports since rationing was brought in, because, as has been stated here time after time, production of hogs has been going down. The big export of meat in 1943 and 1944 was bacon. Then we switched over to a large extent from bacon to beef in 1944, and particularly in 1945. The export of beef went up considerably in the latter part of 1944 and all through 1945 and it is still quite high. The export of bacon and ham is down because production is down. The only indication one could take is that the consumption of meat in Canada is lower under rationing than it was before. We can only assume that to the extent it is lower the meat is going out of Canada because it is all being marketed.


Mr. HATFIELD:: Were the increased
exports to the United Kingdom or to the United States?


James Garfield Gardiner: Entirely to the United Kingdom.


Edward George McCullough: Coming back to the question raised by the hon. member for Battle River, can the minister make any statement as to what is being done to prevent a recurrence of what happens when farmers ship live stock to the market and find that prices fluctuate one or two cents per pound because of congestion? I know there is a floor under butcher steers and slaughter cattle, but there is no floor to the farmer. This fall there is a great likelihood that when the heavy run occurs there will be congestion at the Winnipeg market and prices will go down. As a consequence farmers one week will receive perhaps one or two cents per pound less for their cattle, which on a 1,400 pound steer may mean a loss of from $14 to $25. When farmers keep their cattle on the range or on pasture they should be guaranteed against loss when they ship better fed stock to market.


James Garfield Gardiner: I could give figures which would indicate there is no variation in the average monthly prices through the years, but that would not answer the question the hon. member has in mind. All I can say is what I said this morning, that never at any time has the price of hogs been below what the buyers would be justified in paying for them under the floor prices that are established by these agreements. The price has always been higher than the floor under hogs. I submit that it would not be in the interests of the farmer to say that if somebody requires hogs with sufficient urgency he should not be allowed to pay a cent or two higher some weeks than someone else, and that the farmer should not be allowed to get that cent or two cents, whatever it may be. It stands to reason that if he is permitted to pay that cent or two cents for a week or two, at the end of that week or two it must come down to the average which has always been above the floor.
All we have ever sought to do is to establish a floor sufficiently high to give reasonable returns and to say that the price must not go below that floor. We have never attempted to stop them from going above. The prices board have the responsibility for seeing that the commodity as sold to the consumer is not sold above a certain price, and that usually takes care of any control that there needs to be at the top. As to whether it goes up or not, we have not attempted to

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stop that, but our regulations say that there must be a floor. We have let them do that, and of course if we do that we must let it come down again.
With regard to these fluctuations, I would say that that is more in the hands of the farmer and the gentleman who is picking up the live stock around the country. This always occurs in the latter part of September and in October because we are approaching the winter at that time. All other times it can be pretty well taken care of if the farmer is a little careful about when he ships and the buyer who is handling the stock is a little careful about when he takes it in.
I have had the same man handling my stock for the ten years I have been here and I have never found any reason to complain. He calls at my place and gets it when he thinks it ought to go out. I always take his advice because I think he knows more about it than I do. He is at the market every week or so and he knows what the market is. I have never had any complaint to make with regard to his taking the stock, and I must say that I have always been satisfied with the price when I examined the cattle, examined the hogs and examined the market. I think that is true of most of those who have been careful about the matter. I can say without fear of contradiction that there has been less variation in the price of live stock in the last five years, certainly in the last three years, than we have ever before experienced in this country.


Victor Quelch: For hew many years has there been a floor price?


James Garfield Gardiner: We have been in this position now for two and a half years.


Victor Quelch: Is there any definite date at which it will expire?


James Garfield Gardiner: So long as these contracts continue it will pretty well have to continue.


Percy Ellis Wright: The minister said that from 83 to So cents of the dollar obtained for meat exported was returned to the farmer. How does he obtain those figures? Has the board examined the books of the packing houses to ascertain their costs?


James Garfield Gardiner: On the product that I am speaking of which is exported overseas, theoretically at least, the packing house is our agent. They buy the hogs, and we know what is paid for the hogs. We know what we allow the packing plant for the bacon. We know what the costs are. We have all those figures on our own books. We know what the farmer obtains for the hogs. So that there is no danger of our just taking
figures that have been prepared by the packing houses, although I may say that jus* this week figures were given to me voluntarily by one packing house which were almost exactly the same as our own figures.


Percy Ellis Wright: The meat board does not put auditors into the packing plants to ascertain the cost of processing?


James Garfield Gardiner: They do not put an auditor in, but they get all these costs daily when they are buying, just as any business man would. I follow the markets all the time myself. They are on my desk every morning. When I have noticed variations between Calgary, Winnipeg and Toronto I have had Mr. Pearsall in and asked him, "Why is that?" I have said, "I want to know why it is before I will accept that position." We do that all the time in the department. Not only do I do it, but the deputy minister does it, and the director of marketing; everyone associated with it checks these things every day. It is on that check that I base my statement that hogs have not been below the floor.


Frederick Samuel Zaplitny: I think we are getting away from the question. How does the minister arrive at the figures of the percentage that goes to the farmer and the packer?


James Garfield Gardiner: Let me put it simply. A hog is bought in Winnipeg. We know what was paid for it on a certain day. That hog goes to the packing plant and is processed. We know what the product is that comes out as a result, because we take it, and we know what we allow for it. It is moved down to the port because delivery is taken at the port. We know the cost of moving it there. We know all these costs; we do not have to go to anybody for them, because we have them.


Frederick Samuel Zaplitny: The figures we have been given so far refer to the product which is exported. Can the minister give us comparable figures for the product that is put on the domestic market?


James Garfield Gardiner: Whether it goes overseas or is consumed in Canada the same price is paid to the farmer for a similar grade. He gets his percentage of that particular output. There may be times when for a short period a packing plant may pay one cent or two cents a pound more than the market permits, but I do not know where they would get any extra return by doing that because there is a ceiling price at which they have to sell, and so any extra price they pay comes off any return which they get. ft does not come off the farmer.

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Frederick Samuel Zaplitny: Is the ceiling the same for the domestic market as for the export market?


James Garfield Gardiner: There is no ceiling on the export product. It is the floor price that is on the export product.


Frederick Samuel Zaplitny: How does the domestic ceiling compare with that?


James Garfield Gardiner: There is a margin
allowed. On blue beef, for example, the margin is one-quarter of one cent. The floor is just one-quarter of one cent below the ceiling, and we undertake to buy all the beef on the market at one-quarter of a cent under the ceiling. Most of the time recently we have not been able to get it. It is selling so close to the ceiling that we cannot buy it at one-quarter of one cent under the ceiling.


Lewis Menary: Friends of mine coming back from a motor trip in the United States say they were able to buy Canadian bacon over there. If that is so, would the price be higher? Would the farmer receive more for bacon sold here than for bacon going say to the United States?


James Garfield Gardiner: There is no bacon exported legally from Canada to the United States. Some bacon may find its way over there through irregular channels. On menus in the United States there sometimes appears what is called Canadian-style bacon. It is produced from hogs similar to the hogs in Canada and cured in a similar way, but it is not Canadian bacon produced in Canada.


[Stage Direction]
Item agreed to.
478. Dairy products board, $2,029,102.
William Scottie Bryce: I would like the minister to make a statement on the milk situation. He announced in the spring that the winter subsidy would be added to the summer price. The consumer has lost the two cents subsidy. I do not know whether the minister's department has anything to do with that or whether it comes under some other department. The milk situation all over the Dominion of Canada to-day has to be straightened out or we are not going to have sufficient milk for our people. The two cents subsidy on milk was one of the finest investments that any government ever made in the health of this nation, because milk is not only a drink but a food, containing about 800 calories per quart. The milk industry must be protected, because it would be disastrous if the dairymen began to sell off their herds which mean so much to the whole country. I would like the minister to make a statement and tell us what he intends to do with the dairy farmer this winter as far as price is concerned.


James Garfield Gardiner: Mr. Chairman, last
spring the announcement was made that the two cent consumer subsidy was to be taken off milk. It was a decision reached after discussions which took place between the dairy board, the Department of Agriculture and the prices board, and I believe discussions took place between the prices board and the provincial milk boards who had the authority to adjust prices before the war started, and still have the legal authority under the constitution as soon as our special war regulations are taken off. There had been considerable discussion for, I would say, eighteen months before that, during most of which time the producer organizations were most anxious that the amount they were to obtain for their product should be established in the form of a price rather than that an amount of say ten cents at a certain point should be maintained as the proper price for milk and then a subsidy of two cents paid on top of that to make it possible for them to consume it. It was thought that the increase in earnings had been sufficient to warrant the two cents being taken into the price, and that was done.
In, spite of the fact that the total milk production this year i3 down two or three per cent, total sales of whole milk are up from seven to eight per cent, so that the putting of the consumer subsidy into the price has not resulted in a smaller consumption of milk; milk is being consumed in greater quantities notwithstanding that price increase. The other part of the picture is this, that we are also paying producer subsidies, and as will be remembered, we were paying thirty-five cents per hundred during the summer months and fifty-five cents during the winter months. This spring it was suggested that we should put the summer subsidy up to the same level as the winter subsidy and make it fifty-five cents, with the idea that when we came into the winter again there would be a higher return required. That was examined into very carefully and discussed very fully with producer organizations and others, and eventually we suggested that we were prepared to do a certain thing: we were not prepared to go to fifty-five cents for the summer months but we were willing to make some increase. That was not acceptable, and it was finally said'-and I do not think there was much disagreement about it-that at some time these [DOT] subsidies would have to be taken off and the control would have to go back to the provincial boards. After the discussions had taken place it was finally determined as a matter of government policy that the date at which it

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should go back to the control of the provincial boards was the first of October, 1946; and so we said that for the five months we would pay fifty-five cents, in the summer months, in order to give those who were interested an opportunity of adjusting the position as between the producer and the consumer. My understanding of what was said in the house and wdiat was said in the discussions was that there was not going to be any great difficulty about taking care of the consumer subsidy plus a sufficient proportion of the producer subsidy to keep the cost to the consumer still within the range of what was thought by the prices board at that time to be a reasonable increase in the cost of living as compared with increases which were being given in earnings; and so it was thought that the matter could be properly turned over to the milk boards as of the 1st of October and that in the meantime they should work out their plans. The provincial boards are meeting in Ottawa this week-as a matter of fact they met me two days ago- and they are discussing that question. 1 do not know what decision will be reached. Yesterday morning or the day before I spent three-quarters of an hour with them before coming to the house, and I think they went from me to see the prices board people to discuss the whole position, to find out just where we were at the moment, and what effect anything they might do would have upon the general position. All I can say is that the question is being fully considered and discussed between the two authorities which have something to do with the establishing of returns. I have been in negotiation this week; final decisions have not been reached as to what is to be done. Some have suggested that a longer time should be given, and that in order to make that longer time possible some producer subsidy should still be paid- not as much as we were paying before, but that something should be paid-and that some of the extra cost should be taken over by the consumer. These questions are being discussed this week and will be determined, I assume, in sufficient time to make the announcement long enough before the first of October to acquaint people with what the situation is.


William Scottie Bryce: 
James Garfield Gardiner: Well, that is the question which is under consideration. The agricultural prices control board which we set up two sessions ago is also working on these statistics with regard to the whole problem; and the dairy association-I think that that is the proper term to apply to it-the organization of producers, have put a man to work on it and have already presented to us their idea of what the increased costs are and of what they require in order to produce milk. All these submissions are being considered now by the proper boards; a conclusion will be finally reached and announced, and I hope it will be satisfactory when it is made.


William Scottie Bryce: I hope that the government the minister represents will take into consideration what milk means to this nation. When we examined the boys for this last war, many of them were found wanting, and our medical authorities tell us that had they been able to drink an abundance of milk, or even milk in regular quantities, they would have been better prepared to pass the tests. The subsidy of $20 million which we paid to enable people to buy milk is the finest investment in health this country ever made.


Mark Cecil Senn: Up to the present time this discussion has been largely on fluid milk, its production and consumption. But usually in past years we have had a surplus of milk on our hands, and the one way, usually, in which that milk can be disposed of was in the form of cheese. As with bacon, we have built up a good market for cheese in Great Britain. I hope that we shall be able to maintain as much of that market as possible. Owing to the higher cost of production in the cheese and concentrated milk industry-and there is some of that going to Britain as well-they seem to think they are not making ends meet. In fact I understand that the production of concentrated milk has gone down some eighteen per cent. The production of cheese has also gone down considerably during the past few months.
I understand that a short time ago the concentrated milk producers' association and the Ontario cheese producers' association presented a brief to the minister showing the increased cost of production of milk and the falling off in the production of these two particular commodities, and asking for some relief. Has anything been done, or is it considered that anything will be done to

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assist these two important branches of the dairy industry, because as far as possible we must keep up our production of cheese which goes to Great Britain. Continuity of supply is one of the important factors in maintaining that market. We have the quality in the cheese and something should be done to protect that market.


James Garfield Gardiner: With regard to the
figures used, I would call the attention of the hon. member for Haldimand to the fact that from the records the total production of condensed, evaporated and whole milk- powder is down 1-8 per cent, not 18 per cent, but cheese is down 21-1 per cent. It is a little early in the season to be too sure about the cheese position. The grass was poor in the early part of the season. It has become better recently and there may be some pick-up, but it will not pick up that much. There will be some decrease in the production of cheese.
However, I wish to say that the delegation which brought figures with regard to whole milk also brought figures with regard to cheese, canned milk and butter. We had a full discussion with regard to the matter, and the figures which were brought have been submitted to the agricultural prices control board. They are working on them at the present time. Again it is a question of a decision being reached on this matter by October 1. What the position ought to be at the moment I cannot go any farther than to say that the whole matter is under consideration. We are just as anxious as any hon. member to keep this production just as high as we can get it.


[Stage Direction]
Item agreed to.

[Stage Direction]
Foreign trade services-
375. Wheat and grain division, $28,532.
Robert Fair: Has the Minister of Trade and Commerce or the Minister of Agriculture anything further to tell the committee about the wheat agreement which was made and announced by the Minister of Trade and Commerce on July 25, and also in connection with the determining of the policy with regard to the prices that are to be paid to farmers on the four years' crops commencing now? What further information has the minister to give along these lines?


James Angus MacKinnon: Some weeks ago I, in behalf of the government, made a statement in connection with the United1 Kingdom wheat agreement and also in connection with the domestic wheat policy of the government.

At that time I promised that there would be an opportunity to discuss these matters when the estimates of the Department of Trade and Commerce were being considered. Heretofore in our estimates we have never had any specific item under w'hich matters relating to wheat contracts or to the wheat board could be discussed, but because of the establishment of a grain division within the department during the past year we are able, on this item, to discuss matters in connection with wheat.
In answer to the question just asked by the hon. member for Battle River, I may say that I do not think I have anything to add to the- statement I have already made regarding the British contract and very little to add to the statement regarding the domestic wheat policy. There is one matter in connection with which there has been a certain amount of criticism throughout the country, namely, the domestic policy in relation to participation payments on the 1945 crop. In my statement I said that there would be upwards of sixteen cents a bushel paid in participation certificates on the 1944 wheat crop. Further consideration of the matter leads me to believe that that estimate was based on a wrong premise and that the payment on the 1944 crop will be considerably higher than the amount I suggested, namely sixteen cents a bushel, and the payment on the 1945 crop correspondingly lower.


Major James William Coldwell: Is that still being carried forward to 1950? The statement made by the minister was that the price would be $1.35 and an additional ten cents to apply to the 1945 crop. I am asking if that is still the intention of the government. The criticism is that the government has what amounts to a contract with the farmers of the country to pay a participation certificate on the basis of the proceeds of the crop when the crop was sold, and that this is in effect a breach of the contract. That is the criticism I have heard.


James Angus MacKinnon: Yes. My colleague, the Minister of Agriculture, will deal more extensively with that point. There is no change in policy to suggest here so far as that is concerned. The initial payment will be . made to the wheat producer of $1.35 a bushel f.o.b. Fort William and the other places for the five 3'ears, the past year and the next four years. [DOT]


Robert Fair: On behalf of this group I wish to say that we are glad to know that we are to have stabilized prices for the next four crop years and also that an agreement has been made with Britain. I am not going to say

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whether we are well satisfied with the prices received. We feel that the British government are satisfied that they got a very good deal at the expense of Canada. One of my reasons for saying that is contained in a Canadian press dispatch of July 26, which states:
The Neics-Chronicle's streamer headline said: "Strachey explains wheat deal and 11.P.'s cheer Canada."
In my opinion they had every right to cheer Canada. The dispatch goes on to say:
The Mirror headlined the story: "Pact Makes Britain's loaf safe for four years."
The Daily Graphic said editorially:	"Our
debt to the empire increases every day . . . thanks, Canada, and thanks again!"
I am glad the people of Britain appreciate that they are getting a good deal from Canada.
I might say we have no objection whatever to Canada's supplying the best food in the world to Britain and to other countries, but we object to the farmers bearing the brunt of the fexpense. On many occasions we have made it 1 clear that the farmers of Canada have not 1 received the price for their products to which they are justly entitled, I still estimate that Wthe same condition continues under the present agreement. Of course we are very well satisfied to have a stabilized price for some time to come, because we all remember what happened after the first great war and we do not want conditions of that kind to arise again; but in view of the losses the farmers accepted from 1930 up to 1942, I feel we are entitled to a much better deal as far as our wheat is concerned. I am not going to deal in particular with the sale to the British government. The cost of that will, of course, be taken care of by the government here, and we in turn will have to bear our share of the loss through taxation.
In connection with our domestic policy, in the first place I do not feel that the initial price is high enough. It is true that the initial price of SI .35 is to last for five years. We appreciate that, particularly in regard to the later years; but because between 1930 and 1942 the farmers of this country received only 16-6 per cent of the national income while comprising 33 per cent of the population, we feel that on our wheat sales alone we have lost no less than 82,200,000,000, and if that amount had been distributed among the wheat growers of Canada it would have made quite a difference in their financial standing. Again we must remember that up to August 1, 1942, we were getting a price of only seventy cents a bushel for our wheat, basis No. 1 northern in store Fort William, Port Arthur or Vancouver. We felt that in accepting such a price we would be recompensed when the war was over. In the price
(hat has been announced, however, we do not feel that this compensation is forthcoming. During the 1945 and 1946 crop years we are permitted unlimited deliveries, but in the three years following, if conditions warrant it, we may be cut down to fourteen bushels per authorized acre, which would mean that man}' farmers could grow much more wheat than they could deliver. I hope there will be no market restrictions to prevent the government from taking all the wheat Canadians can grow during this period.
Again, we are to have a ten cent additional payment on our 1945 crop deliveries, that is, on the wheat delivered from August 1, 1945, to July 1, 1946. That would bring us up to an initial payment of 81.35 for the year just ended, and we are to have no payment on participation certificates issued on our crops delivered between August 1, 1945, and July 31, 1950, until late in 1950. This means that the government will borrow the money of the farmers free of interest during all that time. By the time we pay our income tax, which will amount to perhaps thirty cents a bushel on amounts over and above our exemptions, that is going to cut our wheat price down pretty far. I believe that our initial _ price should be not less than $1.55 a bushel for the entire five-year period, and that participation certificates should be figured and j paid each year. Under the method the government is adopting it is possible that during the later years, if the price of our wheat goes down to SI a bushel for the last year, our initial payment of $1.35 may be our final payment; because, as has already been pointed out, on many occasions we find that the floor price is the price we receive. So that in my opinion S1.55 should be the initial price rather than SI.35; and by having participation certificates paid each year the farmer would get the benefit of any additional gains made, particularly in the early years of the contract. Otherwise the high price we may get-and I repeat "may"-in the early years may be eaten up by low prices in the later years of the contract.
This policy is being announced in face of the fact that the prices of everything we have to buy are climbing daily. From time to time we receive letters stating that prices of things in the stores are going up, and we see that a number of labour organizations are on strike to-day asking for an increase of approximately fifteen cents an hour. Similar increases have been granted in the past; and we know that the consumer class, which takes in the farmers, will have to bear the brunt of these additional wages for labour which are included in prices. I am not saying labour is not

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entitled to its due, but since the benefits to labour are being increased there is no reason in the world why the farmer should not also have his prices increased. A little later on we may be told, as we were told a couple of months ago by the Minister of Finance, that prices of farm products have increased by a very large percentage since the beginning of the war. This does not mean, however, that the financial position of the farmer has been improved very much, because at the beginning of the war we were accepting depression prices for our products; and even when you add the percentages that have been announced by the minister to prices which were far below the cost of production it does not place the farmer in an enviable position.
! With reference to the programme of supply-j ing wheat to the millers at 77$ cents a bushel, of course that is subsidized by the government to the extent of the difference between that price and the domestic price of $1.25. But again, I cannot understand why our domestic price should be $1.25. The farmers should not have to bear this burden. The domestic price should be up to at least $1.55, if not to the average selling price for each year's crop. There is no reason why the farmers should continue to subsidize the consumers of this '[DOT]country.
We are glad to see that the wheat board is to continue in operation. It has given satisfaction to all. Many of us were very glad to see that the services of the grain exchange are not being made use of. On another occasion I asked the minister whether the wheat board is continuing to pay a commission on sales of wheat to the commission merchants and brokers on the exchange, and I hope that to-day the minister will tell us that policy has been discontinued. There is no reason why it should be carried on, and it should have been stopped many months ago.
I do not think I should say very much more, though we may have further comments to make a little later on. The policy of the social crediters and our supporters is that the initial price should be $1.55 a bushel with participation certificates computed and paid annually, and we shall have more to say as the discussion goes on.


James Garfield Gardiner: The Minister of Trade and Commerce stated a few minutes ago that I would have something to say with regard to this matter, and perhaps I should make that statement at this stage. My reason for saying anything at all at the moment is largely the fact that last January, when the Minister of Trade and Commerce and I were in Britain, we opened discussions with the British govern-

ment looking to the negotiation and signing of a contract on wheat covering a period of time. Later on in the season it became necessary to continue those discussions while the Minister of Trade and Commerce was in Central America, and I represented the government in carrying on those discussions. Therefore I am familiar with some of the discussions which took place during the time the Minister of Trade and Commerce was absent.
He has suggested to me that I might give the committee the benefit of some of the conclusions reached, and the reasons for arriving at them. It will be recalled that on September 19, 1945, the Minister of Trade and Commerce made a statement to the house with regard to future policy in connection with wheat. I think I should place on record at this time three paragraphs from that statement which bear upon some of the questions now being discussed, and which have been referred to by the hon. member for Battle River. In -the portion I wish to quote the following is stated:
In asking Canadian producers to forgo such benefits as might be realized in the short run through higher export prices, the government recognizes the paramount need for relative stability of income to wheat producers. Toward this end, the government undertakes that in the five-year period-
And I wish to emphasize that right in the first announcement what was spoken of was a five-year period.
ending July 31, 1950, producers will receive not less than $1 per bushel, basis No. 1 northern. in store Fort William/Port Arthur or Vancouver on the authorized deliveries for each crop year. For the balance of the 1945-16 crop year, at least, the Canadian wheat board initial advance will continue at $1.25, where it was set two years ago. By providing a long-term floor price of not less than $1 the government will protect producers against the consequences of any sharp reversal in the world wheat position during the next five-year period.
The government, in adopting this policy of a maximum price for overseas shipments for the present and a floor price for five years, is asking the producers, in their own interests, to forgo exceptional short-run advantages in favour of a long-run stability of income. In arriving at its decision on this policy, the government had the following fundamental considerations in mind:
Any further increase in wheat prices now would aggravate the problems of economic and political readjustment of the liberated areas to Canada's detriment in future trade with those areas. There is a moral obligation not to take advantage of our recent allies in their time of compelling need.
Higher wheat prices would encourage the importing countries in a hurried return to wheat production and pre-war wheat policies very directly to the detriment of the wheat exporting countries, particularly Canada. Moreover, production in a number of exporting countries would be unduly encouraged.

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That was the statement of policy contained in the last three or four paragraphs of the statement read to the house on that occasion by the Minister of Trade and Commerce. But what I wish to emphasize particularly is the fact that from the very first statement made in the house it was a five-year period which was discussed.
At a later stage of the discussion in relation to this matter I stated to the house that the period was a five-year period, that the period previously discussed by the government of Canada with the international wheat committee had been a five-year period, but that we had not been able to prevail upon the committee to discuss a period so long, and they had insisted upon the period's being cut down to three years, so far as their discussions were concerned.
But when it came to a matter of discussing prices, we were not able to reach agreement in the international committee as to what the price would be. Canada's submission in that regard was that the minimum price should be $1, and the maximum price should be $1.50, preferably, so far as we are concerned, over the longer period of five years. But the committee was not able to arrive at a decision even with regard to the $1 to S1.50 on a shorter period of three years. When that time was reached, this announcement was made to the house; and it was definitely stated at that time that it was a five-year period which it was desired to arrange for; but that it would be impossible to enter into negotiations immediately, and that when they were entered into it would take some time to carry them through.
So that we were going to put ourselves in a position of safeguarding the farmers for a five-year period by putting the floor of $1 under wheat for that entire period; and we were going to see that for the time being we were prepared to deliver wheat to Great Britain and the other allied countries overseas-it was intended to eliminate the United States and other countries which are exporters of wheat themselves-at $1.55 a bushel.
It was definitely indicated that was only an undertaking given in order to make negotiations possible. As I said a minute ago, negotiations were opened in January, 1946, when the Minister of Trade and Commerce and 1 were in Great Britain. Those negotiations continued until the announcement was made in this house that we had succeeded in agreeing to the contract made a few weeks ago by the Minister of Trade and Commerce.
I do not think I need go into details regarding the contract, further than to say that under that contract we have already been
delivering wheat to Great Britain in considerably higher quantities than we had beeD [DOT]accustomed to deliver it to them, and this was done throughout the 1945 crop year which ended on July 31, 1946. Deliveries had been made in very much greater quantities than we had been accustomed to deliver wheat to Great Britain; and we were delivering it at $1.55 a bushel. We were also delivering wheat to other allied countries on a similar rate, and in the meantime carrying on our negotiations.
The contract provides that for the years 1946-47 and 1947-48 the price at which wheat is to be delivered to Great Britain is still to be $1.55. It provides that the quantity for those two years is to be 160 million bushels a year. I think it is important to remember that our average deliveries to Great Britain, for consumption in Great Britain, for a long period prior to the war was 90 million bushels a year.


Major James William Coldwell: Was not 102 million bushels the highest?


James Garfield Gardiner: About that; it averaged 90 million bushels. I have not all the figures here at the present time. But the average was 90 million bushels for a period of years, and in certain years it could have been much shorter or much longer and the figure would not have varied much. Around 90 million bushels was what we sold Great Britain.
I consider it is something of an accomplishment to have 70 million bushels added to that 90 million bushels for a period of four full years. We have delivered more than that to Great Britain during the year we have just come through at the figure of $1.55. So that I say we have this considerable accomplishment for two years of supplying them with 70 million bushels more wheat than we had supplied them in the years preceding the war. We think it is somewhat of an accomplishment to point out that for two years more we are going to be able to supply them with 50 million bushels more than the average amount which Great Britain took from us during the years preceding the war.
In other words, the average for the four years is 60 million bushels more, or 66J per cent more wheat delivered to Great Britain under this contract than we have been accustomed to being able to deliver there for consumption in Great Britain.
There is, of course, the' provision in the contract under which Great Britain may sell or dispose of some of this wheat in the form of either wheat or flour to others. We have placed no restriction upon her in that regard. One can only answer the criticism by saying

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that if Britain is anything like as good a trader as she is accused of being and if she has to pay a higher price for wheat in any other country from which she might purchase at the present time than she is having to pay to Canada, at least during the period when wheat is higher that $1.55 if purchased from other countries Britain is not at all likely to dispose of any considerable part of the 160 or 140 million bushels of wheat to anyone else. In other words, she is buying this wheat in the first instance in order to serve her own people and be assured that food is available for them. If Great Britain finds is necessary to send 10 million bushels to India or even to some country in Europe in order to feed people who would not otherwise be fed, I have no doubt she will probably do that; but as for taking our wheat and selling it in some other countiy in order to make more out of it than they had paid to Canada, I doubt very much if Britain would even consider doing any such thing at any particular time, no matter w-hat the situation is.
What I want to emphasize is that we have assured Canada a sure market for a period of four more years of at least 150 million bushels of wheat on an average for each year during that period. A question which has arisen as a result of the fact that most of our discussions have been of a four year contract in order to complete a five-year period is as to whether there has been any change in the policy which was discussed with the farm organizations and others as to the participation payment on the 1945 crop. I wish to say that all the discussions that have taken place with Great Britain, with the farm organizations, in the wheat committee of council with the wheat board and others, and in the council have been in connection with a five-year period just as was announced on September 19, 1945.
It was not until about a month ago that there was any discussion whatsoever of separating the payments in relation to the 1945 crop from the payments of the last four years of the period. . I am going to indicate how that discussion came about and where it had its origin. It did not have its origin with the farm organizations, and in a moment. I shall state the reason for saying that. In all our discussions with the farm organizations we discussed the possibilities of what might be called a five-year pool. We were to put all of the returns from our wheat into a fund and PaJ' out a certain initial payment. Then at the end of the five-year period we would divide up any profits that were made among the farmers in proportion to the amounts
[Mr. Gardiner. 1
that they had delivered to the pool during that period of time. If there were a loss instead of a profit the government undertook to take that loss after having once set the initial payment.
At the time the discussions started, the initial payment was $1.25, and the main criticism of the proposal made by the government in September, 1945, was that we had substituted $1 for $1.25. We made it very plain that that was not intended to be the price to the farmer, that it was only a safeguard to the farmer for the five-year period until such time as we could negotiate a final agreement with the British to take a very considerable proportion of our wheat. The contract we negotiated was for. four years with a definite return of $1.55 a bushel in the first two years of that four-year period. A considerable part of the crop for 1645 was sold at $1.55, which meant three years of sales at $1.55. There was a guarantee put under the price of SI .25 for the third year of the contract or the fourth year of the pool and $1 for the fifth year of the pool or the fourth year of the contract. It was then obvious to everyone that more than S1.25 a bushel could be paid as. an initial payment.
Then the question under discussion was as to how much could be paid out as an initial payment on that wheat. At the time these discussions began, I put a question directly to the representatives of all the farm organizations which met in the office of the Minister of Trade and Commerce. I asked whether I was right in assuming that in all these discussions we were prepared to undertake a five-year pooling of the returns from the crop. I also asked whether I was right in assuming that the highest floor price that had ever been asked for officially by any farm organization up to that time was $1.25 a bushel. I then recited to them the terms of the contract which had not yet been signed and indicated that we were hopeful we w'ould still have the support of the farm organizations in entering into a contract for four years on the understanding that the floor price would not be less than $1.25 a bushel. The answer I got to all those questions was that what I w'as assuming was the position that had been assumed all through the discussions. What they wanted was security in the form of stability of prices over a period.
Then they said to the Minister of Trade and Commerce and to myself, "We want to discuss with you what we think the advance payment ought to be." We agreed to that and the discussion began as to whether it

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should be $1.35 or $1.40. I think I am correct in saying that every farmer in western Canada, including all the representatives of the farmers, would have been better pleased to get $1.40 as an initial payment than he would to get $1.35. I am not going to argue that anyone representing the farmers or any individual farmer would not have argued in favour of the $1.40, but I think I am right in saying that, after a complete discussion had taken place, those who represented the farm interests-'there were, members from Ontario as well as the president and secretary of the farm federation representing people right across Canada-felt justified in believing that the best possible thought would be given to the whole question and, whether or not they could agree on everything that was decided upon, an effort was being made to give that stabilized return to the farmer at as high as possible a level and over as long a period of time 'as possible. The discussions were then carried on without any further direct negotiations with the farm organizations.
The government gave the fullest possible consideration to the matter. During those considerations the suggestion was made, not by the farm organizations but by an official of the government-this was not a member of the government-that we might consider the possibility of paying out immediately the entire participation payment on the 1945 crop and then, after having done that, determine upon the lower rate of $1.35 a bushel to the farmer for the four-year period. That matter was discussed indirectly with farm organizations, not in a meeting of them all together but indirectly with those who represent farm organizations. I think I would be correct in saying that that would have been preferable to what has been suggested. It was considered preferable on the ground that a very high participation payment was assumed as going to be made for the 1945 crop. That is where the question comes in that was raised a few moments ago by the minister. That very high initial payment was figured on this basis, that if you take all the wheat which was supplied to the Canadian people for consumption at $1.25 a bushel out of the 1944 crop, the participation payment on the 1944 crop would be relatively low and the participation payment on 1945 would be relatively high. When it was known that figures which had been used in the discussion involved that consideration the question naturally suggested itself whether or not that was the just thing to do; and we came to the conclusion, right or wrong, that it was not the just thing to do. That was between the time the announcement was

made by the minister of the sixteen cents advance for 1944 and the announcement he made to-day.
The position to-day is this. When the proportion of the wheat that was utilized in 1944 for supplying the mills in Canada is charged up to the pool of 1944 and the proportion that was utilized in 1945 is charged up to the 1945 crop, the participation payment for 1944 will go up and the participation payment for 1945 will go down by a relative figure. The only cost that would have been against the 1945 crop under the previous suggestion would have been the cost of handling, and the handling cost was very low in 1945 because wheat was coming out of the elevators faster than it was going in, because we got rid of all our surplus that had been carried over from other years as well as all the crop for that year. So that there has been very little charged up against that wheat during 1945 and 1946. When that adjustment is made the question is not as important to the farmers as if the payment had been made the other way.
As a result of what we have done, namely, establishing an initial payment of $1.35, the participation payments are immediately being made on the 1943 crop; they are being made now. I think it would be the duty of the wheat board, as soon as possible after that, to pay the additional ten cents a bushel out of the 1945 crop, which would bring the initial payment for that whole five-year period up to $1.35 instead of $1.25. That ten cents will be paid out on the 1945 crop. I say that in order to emphasize the fact that while the different way of figuring it, which I think is the just and proper way, reduces the amount of participation for 1945 at the top by an amount which I do not yet know, it reduces the amount by ten cents at the bottom, and there is not so much in between to be considered at the moment when we are talking about whether participation payments should be immediately paid out on the 1945 crop as separate from the crops of the other four years.
The position then is this, that we have decided that the policy ought to be to make an initial payment for the whole five years of $1.35, and any earnings that are made on the crop should be charged up to participation. If there are any losses taken as we go along through the programme those will be charged up against the same fund, and this year's participation will be paid out at the end of the season.
Some may ask why we should ask the farmers to wait so long? I would submit that the most important reason is that if we are

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to have long-term contracts that stabilize prices we must be prepared to do what everyone has suggested we should be prepared to do. I agree with those who say that we should not be asked to do more, only to the extent that we are asking some other people to do certain things.
It is not right to say that the people of Canada have never been asked to assume any losses in connection with wheat and thus help the farmer, because in one year in handling wheat under the wheat board we lost $61,000,000, and that was taken out of the treasury of Canada or charged up to all the people of Canada and paid.


Mr. LOW:: What year was that?


James Garfield Gardiner: On the 1938-39 crop.
In some other years we lost a lesser amount. Under the arrangements which we have, carried on since 1935, we have always undertaken that the treasury of Canada would take all the losses and that the farmers of Canada who grow the wheat would get all the profits. Perhaps we are being just a little too critical as western farmers when we say that we should be insistent that no part of the advantage which is gained by keeping down the costs of living through keeping down the cost of the loaf of bread should be charged up to the farmer alone. The amount that should be charged up should be limited as much as possible, but I think we shall all agree that there is some justification for our taking some of the chances.
Having said that, may I say that farm organizations generally, the farmers in particular, and most of us who represent wheatgrowing constituencies in this house have always questioned the advisability of charging the farmer up with the difference between whatever the price was and the price at which wheat was being supplied to the millers. In other words, it, should be emphasized over and over against that every banker, every operator, every railroad, every clerk in a bank or store, every labourer, every farmer has been buying flour, or his bread to put it in other terms, on the basis of 78-cents wheat ever since control came into effect in this country. In other words, we have been supplying that important food product to the people of this country, to the labouring people and consumers generally, at a lower rate than it is supplied anywhere else in the world. I agree with those who say that that whole cost should not be charged up to the farmer, and in discussions in the past I have maintained that too much of that cost has been charged up fMr. Gardiner.]
to the farmer. I still maintain that we should get away from that just as soon as we possibly can.
Having said that, may I revert to what I said a few moments ago. The argument is not all on one side. The treasury has paid the losses on our wheat before; it may have to pay losses again, and those losses if paid will be paid to the same farmers against whom this cost was charged up. That is the position at the moment.
In the discussions that have taken place the question was raised whether the floor price should be for this whole five-year period. You can carry right on through the season and apply any argument you like with regard to it, but these are all the facts which are available in this connection.
Finally, instead of adopting either one or the other alternative, we did adhere to the $1.35 as the initial payment, and we said that the final payment would be made at the end of the five years on that basis. But it is not correct to say that there will be no participation payment from now until the end of the five years. We are just in the midst of making the 1943 payment, and then we must pay out the ten cents a bushel on the 1945 crop, which will take some time. I hope it will not take so long as it took to get around to the 1943 payment, but it will take some time. Then we shall have to pay out on 1944; it will be a substantial payment, and it will have to be refigured in the light of some of the things I have said in the last few moments. In other words, I shall be very much surprised if we are able to complete those payments earlier than the end of 1947; and I would be very much surprised too, in the light of some things I have heard here to-day, if the farmers would want it all paid within that period of time. We hear a lot of things said about income tax; and I am not so sure, if anybody is right in arguing, as many have argued in this house and outside, that we are taking a big risk in the last years of this contract, but that some who are worrying about the contract would rather have the payment made toward the end rather than the beginning. The treasury would like to have it paid out in the beginning and maybe are urging the chairman of the wheat board to pay it out early. But some of the farmers will say, "As long as we know we are going to get it we shall be fairly well satisfied." So that, after all, the only time the farmers have to wait without any participation is, at the outside, two years. They may not have to wait that long; they may be getting annual

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payments for two years or two and a half years and then have to wait the remainder of the period in order to get their final payments on the five-year pool. I do not think that is an objectionable arrangement in so far as the farmer is -concerned. I am going to say this, and to say it after having had one experience of saying a similar thing before and resolving never to say it again. I said I had no complaints about certain things which had been done. Then the next day somebody proceeded to organize complaints and I got a considerable number of them. But I am going to say this: I have just completed a trip in western Canada. I addressed a meeting in Edmonton of eight thousand people, most of them farmers; and about a month earlier I addressed a meeting at Kenosee park, southern Saskatchewan, where I gave them the terms of the agreement. I addressed another meeting at Battleford and did the same thing. I spent the great part of three days in the first week of August at the Regina fair, meeting farmers every day in the barns and around the grounds and elsewhere. Then I attended a Liberal convention-


James Arthur Ross: They were not satisfied?


James Garfield Gardiner: -at which all of the different corners of Saskatchewan were represented.


Major James William Coldwell: "Corners" is right.


James Garfield Gardiner: As a matter of fact the vote was 623 out of a possible 650, or something like that. They were mostly farmers. I would say that some day again most of the farmers in Saskatchewan will be Liberal.


Major James William Coldwell: What a hope!


An hon. MEMBER:: "Hope springs eternal."


James Garfield Gardiner: I was at all these gatherings; and I must say this, that not a single person, farmer or otherwise, raised a complaint in regard to this agreement. They did not all mention it; but all who did mention it spoke of it in very glowing terms and said, "It is the thing we have been waiting for in this country ever since we have been here, to know, three or four years in advance, what we are going to get for our crop, and know at the same time that the return is a reasonable one."
This morning I went over the records to satisfy myself on what has been happening in relation to wheat and to compare it with what is proposed under this agreement. I find that the time of highest returns for any five-year period in the history of wheat-growing in western Canada was the five years around
the end of the last war, from 1916-17 to 1920-21. The average price over that period for No. 1 northern at Fort William was $2.22 a bushel. That was a period of government control of the marketing of wheat. It was the period when we had our first experiences with the wheat board. It was the period when wheat was being marketed from government to government, and during that time we had an average return of $2.22 a bushel basis No. 1 northern at Fort William for all the wheat marketed. On August 15, 1920, or, in other words, at the beginning of the 1920-21 crop it was decided to throw the market open and discontinue control. Wheat remained above $2 for four months. Hon. members remember that wheat had averaged $2.22 in all the previous five-year period; it was up at around $2.50 or S2.60 when controls were taken off, and it remained above $2 for four months. In the fifth month it went below $2 and continued constantly downward, to ninety-three cents a bushel in December of 1923. Every member of this house from western Canada knows it was as a result of that experience that the pools were organized in western Canada in 1923-24. I remember an experience which I had between that period which I have never forgotten and never will forget. I went dowm to borrow $600 on a carload of wheat. The banker said to me, "I should not lend you this". I said, "Why not?" He said, "I have got instructions from head office not to lend any money on wheat being held." But he wrote out the note and pushed it across the table; I signed the note, got the $600. and spent it. Well, I was not able to pay back the bank until I sold my next year's crop. I lost just exactly the $600 on the carload of wheat, selling it the next spring after this drop in price which I have just indicated to the committee. Every farmer in western Canada who grew wheat there from 1920 to 1923-24 had that experience. There is no reason why anyone should be surprised in going to western Canada to-day to hear every western farmer say, "I am prepared to see this thing tried out; it is better than anything that has been proposed to us before. We expect more from it; we are going to support it". They all had a similar experience; people sitting on the other side of the house had it; they can remember it just as well as I can.


Joseph William Burton: We made our speeches
eighteen years sooner, though.


James Garfield Gardiner: No; I made mine and they were heard at that time by more people than heard my hon. friend.


William Scottie Bryce: The same thing will happen again.
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James Garfield Gardiner: 
Mr. BENTLEY:: Twenty-two million.


James Garfield Gardiner: Twenty-two million in the final result. Before it was settled it was somewhere around $30 million. Some of that amount was picked up afterwards, but the final figure of $22 million and some odd dollars had to be taken care of by other arrangements made by governments. Those of us who w,ere in government were there at the time and had to take part in the negotiations which resulted in the settlement. As a result of that, other kinds of control were tried for a while, and finally the market was thrown open. During the period of thirteen years from the time the contract pools went out to 1843 when government control was again put on, the average price received for wheat was eighty-two cents a bushel. I am not going to say that that was all due to there being open markets. I know it was not. There were world conditions which have been dis-

cussed here many times that helped to bring about the result. The fact remains that during those thirteen years the average price was eighty-two cents a bushel; and over the twenty-three years from 1920-21 to 1943, the average price was SI .07 a bushel, even including the average of $1.47 over the five years of the pooling period. All I say to hon. members is that when we are discussing this question we ought to take past experience into consideration. I know of no period except the two periods in which we had some kind of control, the one put on by the government itself and the other by the cooperative farm organizations, when wheat ever remained above the $1.45 a bushel for five years. Therefore, cn that basis we concluded that SI .35 was a reasonable position to start from, and that we could start from it only with a contract signed with the British government to take an average of 150 million bushels of wheat over a four-year period at a price which gave us a good sum to begin with. Starting from there, we believe that we can market sufficient wheat in other places at similar returns or higher for the earlier part of the period, and if we necessarily must, at lower returns in the latter part of the period and thus bring it to $1.35 paid to farmers, with little if any loss to Canada.
I must say that the objection taken with regard to flour made in Canada and delivered to our own people is that it may result in some losses to the farmers themselves; but toward the end of this period there may be losses taken on the other side by all the people of Canada who are the consumers of flour, and until we get to the end of the period we cannot be absolutely certain as to whether our criticism is just or not. Mj^ understanding is that the $1.25 is intended to be retained only until such time as controls are released in certain directions to such an extent as to make it possible to release this one also. It is not a part of the whole five-year programme. It may be that after three months, six months or a year that may happen. I am not in a position to state how long it will be on, but it is not part of a programme which continues right throughout the whole five-year period.
These are the chief points that I want to bring out in connection with the contract that has been presented. There is only one other point that I should like to make, namely, that we believe that stability of price is more valuable to farmers under present conditions than the opportunity to get a higher return at present, with chances that we are going to have to take a much lower return at a period a little later on. I think I have the agree-

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ment of most hon. members on both sides of the committee that it will be a good thing for agriculture, in western Canada particularly, and in all of Canada, if we can establish that stability for farm returns across the country.


Mr. MacNICOL:: It would be better for all Canada; we shall all prosper together.


James Garfield Gardiner: Yes. We have contracts for pork; we have contracts for cheese; we have contracts for butter; we have contracts for milk; and they are all on the same basis for a long period of time at a stabilized price. Wheat and beef are the only two left. While I am discussing the wheat contract which has just been completed, I wish to say that a beef contract is under negotiation. I think the final touches will be put to it while I am over in England during the next week or two. When we have it prepared we shall be able to bring it back here and announce it. We hope to have all farm prices put on a basis where we can try to stabilize the return for farm products over a period of from three to five years.
What I wanted to say is that we are going to have criticism. We are going to have people telling us that we can sell our wheat for a great deal more in certain places. I have heard the argument raised here that wheat can be sold in the United States for SI.87 a bushel. As a matter of fact the illustration put out in advertising across the country was that on the street in Portal, North Dakota, wheat was selling at $1.87 a bushel, and that wheat at the boundary, which is only an imaginary line running between the two towns, on the street in Portal was $1.07 a bushel, Canadian funds. I wish to state that neither of these statements is correct.


Major James William Coldwell: Did the minister say $1.07?


James Garfield Gardiner: At North Portal, and
$1.87 at Portal, or a difference of eighty cents between the two. Anyone reading any of these advertisements would come to the conclusion that a Canadian farmer could take a load of wheat from North Portal, cross the boundary to Portal and get $1.87 a bushel for it in Canadian funds, but if he delivered it to an elevator on the north side of the line he would get only $1.07. In the first place, if you could deliver wheat into the United States at all at any price you would have to pay forty-two cents a bushel duty on it in order to get it across the boundary line at any point. So that, now that our money is at par, you can immediately take forty-two cents off the top end of it. That brings you down to a difference of thirty-eight cents, not
eighty cents. Then, starting at the other end, $1.07 is not the street price of wheat anywhere in western Canada. The $1.07 a bushel represents the difference of eighteen cents between $1.25 at Fort William and the advance made on wheat at North Portal; and with the ten cents we are going to pay now as a result of this price of $1.35 and anything paid on top of that at the end of the period under this arrangement, as a result of the final participation, deducted from the bottom end of it- and that may turn to be some six or seven cents-well, you would have only four or five cents left as the difference between the American return and the Canadian return, or the return a Canadian can get for wheat delivered in the United States. It is not eighty cents. When anyone takes 200,000,000 bushels of wheat and multiplies it by eighty cents and says the farmers have lost that much money, well, the farmers of western Canada are not foolish enough to believe that. They know it is not true, and of course that kind of figuring does not get anyone anywhere.
I wanted to say that much with respect to that matter, but you cannot sell a bushel of wheat in the United States at any price.


An hon. MEMBER:: Nonsense.


James Garfield Gardiner: Well, perhaps it is nonsense to say you cannot sell a bushel at any time. Under the arrangement that now exists and that was established by the United States government, not by us, there is an embargo on every bushel of wheat going into that country beyond 800,000 bushels; and that has been the case during almost the entire war period. That is not aimed at anyone but Canada. No other country exports or could export any considerable quantity of wheat to the United States. For milling purposes you cannot send into the United States more than 800,000 bushels of wheat in a year, and that amount goes into that country in the first forty-eight hours of the period, or if not in the first forty-eight hours, certainly within the first week. So that our farmers are not in a position to sell wheat in the United States at all, and why hold up before us this offer of $1.87 a bushel for wheat in that country when we cannot sell wheat there?
It has been said in the newspapers and elsewhere that the American people have been criticizing our agreement with Great Britain. I do not care who may say that, I think I know the American people well enough to know that no considerable number are doing any such thing. They have retained their home market for themselves, and that is their own business. They are paying their own

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people $1.87 a bushel for wheat, and they are not paying the Canadian farmer that price. Since we cannot market our wheat in the United States, we must find a market for it somewhere else. Since they are retaining their own home market, I do not know of any other place in the world where we can sell 160,000,000 bushels of wheat, except in Great Britain. We sold the United States approximately 160,000,000 bushels of wheat one year during the war, as feed for their live stock, even when they had an embargo against anything beyond 800,000 bushels to be milled into flour for consumption in that country. We sold them that wheat so that they could produce live stock and get more meat for the American people. I do not believe any considerable number of people in the United States, in the government or outside it, have raised any criticism of this government going to Great Britain and making an agreement on this basis. But somebody says, "oh, you have made a bilateral agreement and they do not like that." Well, for the life of me I cannot see why the grain exchange or anyone interested in the grain exchange would prefer to have multilateral agreements instead of bilateral agreements. If a bilateral agreement made by the government will tend to close the grain exchange in Canada, surely a multilateral agreement throughout the world will close all the grain exchanges in the world; so why should anyone associated with the grain trade want that? I do not know why, but the advertisements which have appeared would indicate that what they are really against is bilateral trading. Well, I hope I am not looked upon as an impossible imperialist, but I am enough of an imperialist to believe that there is no place in the world where Canada will be better treated than within the British empire.
I am quite satisfied to be partly responsible for entering into an agreement w'ith Britain under which they agree to do a thing which will be beneficial to us, and under which we agree to do a thing which will be beneficial to them. Unless we can negotiate arrangements of that kind, bilateral or multilateral, we shall have difficulties in the world that nothing will solve short of another war such as the one we have just come through.


Joseph William Burton: Why don't you come over here?


James Garfield Gardiner: What I should say to my hon, friend is, why didn't you stay where you were? The trouble with those hon. gentlemen over there was that they were just Liberals in a hurry. They were, I think, in a hurry to get into this house more than anything else. They are here now and talking 
good Liberal doctrine. I am glad to hear them talking it, because it does not in any way hurt the position of Liberalism elsewhere.


Major James William Coldwell: Some of us could have been here a long time ago had we chosen to come another way.


James Garfield Gardiner: Well, that reminds me that the other day my hon. friend said he would not become leader of the Liberal party. I would suggest that he might wait until he is asked.


Major James William Coldwell: That is exactly it; I said I had not been officially asked.


James Garfield Gardiner: That is a very good
reason for not discussing it at all.


Major James William Coldwell: Exactly. I would have been the last one to raise it.


James Garfield Gardiner: The best reason I know for anyone not wanting to become the leader of any party is that he has not been asked. That is sufficient, without anything further.
The position with regard to this whole matter is that we are able to sell a sufficient amount of our wheat in a sure market, at sure pay, to warrant us in agreeing to stabilize the initial payment for five years at $1.35 a bushel; then undertaking to attempt in that period of time to make still further earnings for the farmer and pay those out at the end. Again I submit that this policy is one that appeals to farmers in western Canada generally. When we are at the end of the four-3-ear period, if in the last six or twelve months we find ourselves in the position that world markets, so-called, are not offering as much for wheat as we are getting for it, I hope people will still stand behind us to the extent they are standing behind us now. Even if wheat stays above $1.55 during the whole period, I hope people will still feel that it was worth while trying. If we are successful ip this experiment, then we can talk to the grain trade people with some assurance. If they are able to show us at the end of the five-year period that we were all wrong, that oyer that length of time the farmer got less than he ever got before under similar circumstances and that the other system would have brought him more, then we shall be in a position to discuss the matter with them on an even footing. I am sure anyone who has taken this position and finds himself wrong will be quite prepared to discuss it from that point of view. In the meantime we are convinced that this is the best thing for the farmer. As long as we are convinced of that, and having another four years in which to try it out, we can put the policy into effect in a way that will at least help us to determine how this

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long argument between farmer and grain trade in western Canada ought to be settled in the interests of the great masses of the people.


Mr. BRACKEN:: Mr. Chairman, the item before the committee is one in the wheat and grain division of the Department of Trade and Commerce, in which an amount of $28,000 is being asked. At the beginning of the discussion on it the Minister of Trade and Commerce made a brief comment with respect to the United Kingdom wheat agreement, and the government wheat policy which he had formerly outlined to the house. To-day the Minister of Agriculture has given us the background of the discussions leading up to the United Kingdom wheat agreement, and has supported that agreement with such arguments as he was able to bring forward.
I rise at this time to criticize the government's wheat policy. But before doing so, let me say this, with respect to the United Kingdom wheat agreement. Any agreement such as this which tends to level out the inequalities, and the wide fluctuation of prices in the past, is a step in the right direction. Even this agreement is better than no agreement at all; because, as the Minister of Agriculture pointed out, those of us who went through the price depression following the last war know the danger of proceeding without some kind of plan to try to avoid wide fluctuations in price.	"
Having said this, I wish now to point out some of the weaknesses in the arrangement, as [ see them. Briefly, what is the government's wheat policy? It is, .first, that the initial payment for wheat for a five-year period, including this year, will be $1.35. In that period of time are four j'ears in the future, and one which has passed.
The second point is that wheat deliveries shall not be restricted for this year, but that in each of the later years they may be restricted. In other words something less than the whole crop may be taken by the government.


James Angus MacKinnon: The minimum is fourteen bushels to the acre.


John Bracken: The third point is that the wheat board may sell farmers' wheat in three different ways and at three different prices. It may sell domestic wheat at $1.25; it may sell to the United Kingdom under this agreement for two years at $1.55. and for two years at an undetermined price. The minimum in one of those years is $1.25. and in the last year it is SI. The remainder of any wheat not so sold may be sold at world prices, now in the neighbourhood of $2 a bushel. So far as price is concerned, that is the substance
of the arrangement. As the minister has said, in the first two years the United Kingdom will take 160 million bushels instead of 90 million or 100 million, the average amount taken before the war. In the later two years it will take 140 million bushels.
I shall not make the numerous detailed criticisms of this policy one could make. My major criticisms are these: First, that the price of SI.35, the initial payment, is less than a fair price. It is less than a parity price for wheat. A parity price for wheat to-day would be in the neighbourhood of $1.50. It will be noted that $1.35 is ten per cent less than that.
It may be urged that this is an initial payment, but there is no assurance that farmers will receive any more than that. To the extent that there is no such assurance, the wheat growers in this country and other farmers as well will not be assured of a fair relationship of their prices to their costs of production. That is my first criticism of the agreement. At a time when the world price is much higher than parity it does not assure to farmers even parity. I ask the committee this question: If we cannot have parity now, what hope is there for parity when the world market situation is reversed, and the price is low?
In this connection I would point out that in the years 1939, 1940, 1941 and 1942 farmers of Canada sold their wheat at prices thirty to forty cents below parity. It is only in the last two or three years that the price has equalled, or slightly exceeded what has been spoken of as parity, or a figure reached by economists which is supposed to represent a fair relationship between the prices farmers receive and the cost of things they have to buy.
My second criticism is that the guarantee of $1.35 a bushel is in many respects an empty guarantee. After this year, there is no guarantee that the government will allow the full crop to be sold. There is no guarantee that it will allow more than fourteen bushels to the acre to be sold. There is no guarantee that they will take more than fourteen bushels to the acre on more than two-thirds of the acreage sown in 1940.
In those respects, as I said, this guarantee is an empty one. To the extent that it is a guarantee of $1.35 a bushel on fourteen bushels to the acre, on a reduced acreage, it is a guarantee. But it is not a guarantee of $1.35 on all the crop grown on all the acres which may be producing in Canada in the next five years.
The third criticism, one which was advanced earlier by another hon. member, is that the government's policy is to hold back the pay-
Supply-Trade and Commerce

ment of participation certificates until the end the five-year period. The Minister of Agriculture has intimated that in the next 3'ear or two there will be some participation certificates for back years which will be made. That is true. But it is a new feature of government policy to state that under this so-called five-year plan any money which may be due to farmers will be held back until the plan is completed, instead of being paid as soon as the product of each year is sold, and the- costs and receipts computed.
I have sometimes wondered why the government brought forward a policy with the last-mentioned weakness in it. I can see no other reason than their fear that in the later years of the agreement the price will be low and what may be held back by the government now can be used to supplement the price then.
My fourth criticism is this: The guarantee is spoken of as a price guarantee. In so far as it goes it is all right, but a price guarantee is not an income guarantee, nor is a price guarantee a purchasing power guarantee. As I have already said, the price guarantee on a part of the production from each acre and on a reduced acreage is not a price guarantee on all that is produced.
I think it was desirable that there be an approach made to a sale of this kind to the United Kingdom, but I do not think this was a good bargain on Canada's part. I think it was a bad bargain. I think it will create a handicap in the development of future markets in other places. In some respects I think it is an improvident arrangement. I think it will tend to restrict the expansion of Canada's trade rather than to expand Canada's world trade. I think, in making this arrangement, the government has backed away from its commitments of the past with respect to the widening of Canadian trade.
Before I proceed further, let me deal with one or two matters mentioned by the Minister of Agriculture just before he sat down. He referred to the fact that somebody had said that wheat was sold at a Canadian border point for $1.07 and that wheat had been sold for $1.87 in the United States. I do not know what impression the minister sought to leave by making that statement; but, lest there be some question as to what the so-called world price is, I should like to read from a document of Canada's own wheat board, circular No. 23, dated July 30, 1946. I shall not read it all; but section B, clause 2, which refers to a number of countries to which flour shipments may be made, reads as follows:

The price governing sales to the above countries will be basis our current class 2 price which, at this date, is $2.05 per bushel basis one northern, in store, Fort William, Port Arthur or Vancouver.
We thus have what is in effect a four-price system in Canada. There is the price of seventy-eight to millers for the production of flour for home use; there is the price of $1.25 on wheat used for certain domestic purposes; there is the price of $1.55 to Britain; and there is the price they can get in other markets, they are trying now to get $2.05. That is the wheat price structure as we have it now in Canada.
Let me refer now to another point made by the Minister of Agriculture. He said that this agreement would bring about something more in the way of stability of prices, and that it was a five-year arrangement. A little later I shall touch upon the five-year feature- show that one year has already passed and that in the last two years of the arrangement the agreement means practically nothing so far as price is concerned, that in its main features this agreement is not much more than a two-year agreement. The minister said that it was made for the purpose of bringing about stability in agriculture. I say that in some respects it is an improvident arrangement. In this connection I should like to read what a newspaper which has always been a great friend of this government has to say about some of the aspects of this arrangement. I shall not read all the editorial which appeared in the Winnipeg Free Press of August 5, 1946, but I will try to sort out the pertinent parts. The editorial reads:
The Canadian government is trying to defend the bad bargain it has made in its wheat contract with the United Kingdom by exploiting a prejudice which has no relation to the facts.
Running right through the statements of those who seek to justify this agreement is the assumption that the only alternative to a contract is the danger that wheat prices, some years from now, will fall to the low levels of the depression.
Mr. MacKinnon, the Minister of Trade and Commerce, has said, for example, that the contract protects western farmers "from crippling losses should there be a world slump in wheat prices."
Now, nobody should know better than Mr. MacKinnon that it is not necessary to have a wheat contract in order to shield farmers from depression prices. He himself has brought in an alternative policy which tries to do this very thing. All he is doing, in sponsoring the new contract, is repudiating his own previous handiwork.
Speaking in the House of Commons on September 19, 1945, the Minister of Trade and Commerce, Mr. MacKinnon, said-
I do not know whether this is the occasion to which the Minister of Agriculture referred.

Supply-Trade and Commerce


James Garfield Gardiner: The same occasion.


John Bracken: These are the minister's words:
"The government recognizes the paramount need for relative stability of income to wheat producers. Toward this end, the government undertakes that in the five-year period ending July 31, 1950, producers will receive not less than $1 per bushel, basis No. 1 northern, in store Fort William, Port Arthur or Vancouver on the authorized deliveries for each crop year. By providing a long-term floor price of not less than $1, the government will protect producers against the consequences of any sharp reversal in the world wheat position during the next five-year period."
In short, our wheat industry is not faced by any panic conditions. The policy now abandoned by Mr. MacKinnon and the government was, in reality, designed to safeguard the farmer against the "crippling losses" which, it is now claimed, can only be prevented by the United Kingdom contract and similar bilateral arrangements.
Without reading all the editorial, let me quote from another part which reads:
It should be emphasized, above all else, that there really is no guarantee that Canadian farmers will receive not less than $1.25 per bushel of wheat in the third year of this bilateral deal and not less than $1 for the fourth year, as the contract now stipulates. The contract is full of so many obscurities and escape clauses that these prices, in practice, may be made subject to further discussion and negotiation in the light of world conditions as they will exist at that time. They are far from being an irrevocable commitment by the United Kingdom.
The British government is much too good a trader to pay Canada more than the world price.
Yet that is what the government is counting on in the later years of this agreement.


James Angus MacKinnon: Under a contract.


John Bracken: The editorial continues:
Of course, it-that is the British Government -is quite agreeable to paying us about 50 cents less per bushel than the world price, if we accept such a policy and fix it in a contract.
And that is what the government has done.
Besides, it will always be within Britain's power to take suitable reprisals against us if we try to enforce the letter of the contract against her wishes or her needs. This is a pretty flimsy sort of guarantee for stability of income to the Canadian wheat producer.
We cannot take refuge in the contract and hope to escape the world price.
What the editorial is trying to say is, how can Britain in the later years of this arrangement, if the price of wheat is low, pay to Canada more than the world price? It goes on:
The contract, in short, simply obliges us to sell Britain more wheat than she normally takes from Canada for her own use, and to do so at a figure far below the current world price. We then give her a contractual right to sell the
balance at any price she can get and to keep this profit for herself, even though it is made exclusively out of our wheat.
The editorial ends this way:
This is surely an incompetent way for the Canadian government to try to run the farmers' business.
What we are saying to the greatest wheat importer in the world at a time when the price of wheat is high is this: We will sell our wheat to you at about fifty cents a bushel less than the world price in the hope that some time later on when the price is low you will remember and make up for this generosity on our part. I put the question to this committee, would you if you were members of a British parliament, if the price of wheat should go down to a $1 a bushel, would you ask the workingmen of Britain to pay $1.55 a bushel for wheat? And if you did ask that, would they let you pay it? It is not a question of their wanting to break any contract. It is a question of their not being able to come through. And it will be noticed that they have not agreed to come through. Any practical man will say that there is no prospect that they will pay us more later on than the world price, low as it may be.
I have said this arrangement was a bad bargain, and I want again to refer to this paper-a prominent organ of public opinion- which is sometimes right and which I think on this matter is right. Here is what it has to say on August 1:	.
The wheat agreement is a bargain. Canada agrees to sell; the United Kingdom agrees to buy. How does the bargain work out?
I shall not take time to have you follow the logic of their reasoning, but I will read the pertinent parts of their argument:
Mr. MacKinnon would leave the matter there. But he fails to note another and considerable advantage which accrues to the United Kingdom. Under the agreement . . . Canada undertakes to provide more wheat, particularly in the first two years-the period of the expected scarcity- than the United Kingdom normally receives from this country.
Britain agrees to take 160 million bushels of our wheat where normally she used to take from 90 to 100 million bushels. The editorial goes on:
Moreover, the agreement contemplates the sale at the contract price of quantities of wheat beyond those stipulated.
What is the United Kingdom going to do with the excess of Canadian wheat thus bought from Canada at a fire-sale price? The point has substance, was foreseen by the two governments, and is specifically covered in the agreement by clause 3, "it is agreed that the United Kingdom
government may sell or dispose of the wheat and our purchased under this agreement in whatsoever manner the United Kingdom government may deem expedient both in regard to destination and price."

Supply-Trade and Commerce

Britain in the past has taken only 90 to 100 million bushels of our wheat; she has now agreed to take 160 million bushels a year at fifty cents below the world price, and she can sell the surplus where she pleases at whatever price she can get. The editorial goes on:
In a word, Canada not only undertakes to meet Britain's normal requirements of Canadian wheat at a heavy loss in price. Canada goes further and presents the United Kingdom with quantities of wheat which the United Kingdom is free, under the contract, to sell at the world price, keeping the profit. Canada says:	Here
is the wheat you normally need from us at 45 cents per bushel less than it is worth. And here is more wheat which, if you care to do so, you can sell at a good profit. We do not want this money. You keep it and remember, two years hence, how generous we have been.
It goes on:
From the standpoint of this country retaining its own place in the wheat trade of the world, the folly of this course is clear. Here, however, we are only concerned with how the bargain will work out. Additional to the advantages of being able to buy her normal supplies of Canadian whe*at for much less than it is presently worth, the United Kingdom is being set up as a seller of Canadian wheat. The wheat thus sold will be Canada's wheat. The customers who buy it will be customers of the United Kingdom. The profit which results will be Britain's profit.
It will^be observed in all the comment in the United Kingdom on the agreement that while great emphasis is placed on the fact that Canadian wheat is now to be bought for less than it is worth, no mention is made of paying more than it is worth later on.
One comment from London reads: "The Canadian price is lower than the United States' or Argentine prices to-day and if Canada is willing to promise deliveries at that price for the next two years it would be a foolish buyer who would refuse." "Foolish" is the right word. Another comment runs: "For Britain this represents an enormous bargain at 5 shillings and 7 pence per bushel while the current price of Canadian wheat is 8 shillings per bushel." Again, the phrase "an enormous bargain" is strictly accurate.
There is a large question mark against the advantage which Canada hopes to receive. It remains to be seen if the United Kingdom will pay a penny over the market price two years hence. There is nothing binding in the agreement and all experience is against any such assumption.
Therefore, the agreement is one-sided. Canada agrees to make a gift to the consumers of the United Kingdom of 45 cents per bushel on the basis of present prices and, further, to set the United Kingdom up in the wheat business at the expense of our wheat growers. If the world price slumps ,the agreement will not stand, and there is no way in which Canada can make it stand. The disadvantages are real. The advantages are illusory. There is no doubt of the desire of the government to do the right thing, but there is more than doubt of its competence in a business matter of this kind.
I have said that a bilateral policy of this kind is a handicap to our future markets. The minister made light of that description of the arrangement, but, as I shall show later on,

that criticism of bilateral arrangements has been a basic policy of the Liberal party with respect to trade policies. The Winnipeg Free Press, in its issue of August 1, has this to say with respect to that handicap to our future trade:
If the wheat agreement w'ere a snug little deal conferring advantages on the United Kingdom and Canada even though to the disadvantage of other countries, it might be possible to plead immediate justification. In the long run it is true it would work against both signatories but in the short run it might well be attractive.
The present wheat agreement, however, cannot even make as good a showing as this. It is a bad bargain for Canada. By practical everyday standards of business it will not bear scrutiny. And no wizardry in analysis is needed to demonstrate its weaknesses.
Canada's wheat problem is a selling problem. We require all the markets we can find and the largest attainable number of buyers. Therein, lies security for our wheat farmers. And it follows that the most obvious course to avoid is to restrict our markets, to place our eggs largely in one basket.
The editorial ends this way:
The consequence of this will be that at the end of the four years covered by the agreement we will be less able to market our wheat than before the war. We will have lost valuable customers. We will have placed the future of our wheat farmers predominantly in the hands of a single buyer._ There could be no greater insecurity than this. And no agreement which involves such risk to this country and its wheat farmers should have been entered into.
I said also in criticism of the government's arrangement that a contract of this kind will restrict Canada's ability to widen her markets in the future. In other words, it will tend to block the expansion of our exports, the very thing that in so many speeches in this house, from all sides, everybody is trying to bring about-an expansion of exports and an expansion at the same time of imports.
This is what the Winnipeg Free Press has to say in this respect:
It has been stated here, in previous discussions of the -wheat agreement with the United Kingdom, that if the Canadian government prejudiced world trade prospects, now so hopeful, by such a bilateral deal, it would be little less than treason to our international obligations. That treason has now been committed.
By initiating this deal, Canada has violated the spirit and letter of many obligations w-hieh she freely assumed. Canada is pledged, by a series of commitments dating back to the early years of the war, to join in the movement to build a world economy based upon the principles of multilateral trade. That duty is now forgotten. It has been dishonoured by a bilateral deal that will stir up great mischief, and injure the long-term interests of Canada, which cannot prosper except in a -world free from arbitrary trade restrictions.
And it goes on:
The effect of this bilateral agreement will be particularly unhappy in the United States. For some time now, the United States has been

Fishing Operations
taking the lead in the campaign to liberate world trade. She has reversed the position she assumed after the first world war. Instead of building high tariff walls, she now seeks to reduce or eliminate all discriminatory practices that stifle the growth of trade. In a world burdened with many problems, this American initiative has brought the hope that international cooperation may prove a reality rather than a dream, and that the basis of prosperity may be laid in the vigorous expansion of world trade.
It is difficult to see how Canada's action in the wheat agreement can be fitted into these larger plans. It is an open secret that the United States regards the wheat deal as a contravention of the proposals to be discussed at the world trade conference, preparations for which are now being made in Washington, London and Ottawa, as well as in the capitals of other leading trading nations . . .
On the narrowest possible ground, it is impossible to solve our wheat problem by any such bargain with the United Kingdom as is now contemplated. Before the war Britain took less than 100 million bushels of wheat from Canada; usually the figure was closer to 90 millions. But we had to find a market in the rest of the world for about 150,000,000 or 160,000,000 bushels each year.
There is no security for the farmer in having the contract promise him the sale of 160 million bushels of wheat annually in the British market for the next two crop years and 140 million bushels in each of the last two years of the contract. Great Britain will simply sell the surplus to other countries, thereby making it all the harder for us to market our wheat . . .
The movement to liberate trade was only beginning when the war came. And undoubtedly one of the most hopeful glints of silver in the dark clouds of war has been the belief that the world had learned its lesson and would seize the opportunity which victory would bring to liberate trade.
Listen to this:
This was the promise of the Atlantic charter, of lend-lease, of the united nations charter, of the monetary fund, the world bank, the foreign loans granted by the United States and Canada, the food and agriculture organization, and of the proposed international trade organization. The rebuilding of trade, next to keeping the peace, of which it is an indispensable buttress, has been the greatest promise of these days . . . There is no security for the Canadian farmer in anything but a multilateral trading world.
And the editorial ends in this way:
Thus, in signing the wheat agreement, Canada, the country above all others which depends for prosperity on foreign trade and therefore should be exerting every effort to attaining the freest possible exchange of all goods, has, instead, given the lead backwards to bilateralism and pre-war protectionism.
That is from the newspaper from which I have been quoting up to now.


John Thomas Hackett: What paper is that?


John Bracken: The Winnipeg Free Press.


John Thomas Hackett: I do not want to hurt anybody's feelings.
Item stands.
Progress reported.


FISHING OPERATIONS
William Ross Macdonald: I understand that the Minister of Fisheries, with the indulgence of the house, wants to make a statement to the house.


Hon. H. F. G. BRIDGES (Minister of Fisheries):: With the unanimous consent of the house I should like to make the following
statement:
As hon. members know, there have been some complaints in recent weeks that foreign fishing trawlers have destroyed gear set by Canadian schooners in some of the international waters off Nova Scotia, particularly the Quero bank area. Naturally, the matter has been receiving close attention from this department and perhaps it may be well for me to give the house a brief factual outline of the position up to the present time.
The complaints which have been made to the department have come from the Canadian fishermen's union, of which Captain Ben McKenzie is the president, I understand, and Captain Willis Park the secretary-treasurer. The first message I received was from Captain Park, which reached me on May 21. In that telegram Captain Park protested, on behalf of the union headquarters at Lunenburg, against the action of foreign trawlers which, he said, were destroying Canadian gear by operating over grounds where fishermen from Lunenburg vessels had already set their trawl lines. Captain Park charged further that the trawlers disregarded signals and the buoys which marked the trawl lines. A day or so later I received from Mr. H. C. Meade, the union's district representative at Halifax, a message broadly similar to the one which Captain Park had sent.
Immediately on receipt of Captain Park's message we asked the department's chief supervisor at Halifax for a report. Subsequently, on June 1, Chief Supervisor Barry was also instructed to make contact with Captain Park and Mr. Meade and endeavour to obtain detailed statements from the masters of any of our schooners which had reported having gear destroyed or damaged. In this way we hoped to get definite information as to the identity of the trawlers which were alleged to have offended and as to the circumstances attending each incident. I may add, in passing, that at more or less the same time that these steps to gather information were being taken certain flights were made over the banks by planes of the Royal Canadian Air Force in order to observe the situation.
Fishing Operations

Pursuant to the instructions that he had been given to make contact with the union's representatives, Colonel Barry arranged to meet President McKenzie and Captain Park, and at Lunenburg on June 6 he gave them forms for statutory declarations to be made by the master and the mate of each schooner claiming to have suffered loss. He emphasized the importance of having the information in the declarations as complete and detailed as possible. Captain McKenzie and Captain Park said that a number of sworn declarations would be supplied to the department, but they pointed out that there might be some delay since declarations could be obtained only when the fishermen came in from sea between trips. Some delay was understandable, but I had hoped that it would not be quite so long. At all events, the first declarations given us by the union

ten in all-were not received by our Halifax office until Tuesday of last week, August 6, when they were at once sent on to Ottawa. The chief supervisor's office was given to understand by the union officers that several additional declarations would also be supplied, but so far they have not been received. Those already in the department have been made by the following individuals: Loran Riteey, master, and Michael Hackett, mate, schooner Dot tfc Hellie; Bernard Tanner, master, and Warren Selig, mate, schooner Fairmorse; Carmen Knock, master, and Ains-ley Hynick, mate, schooner Merilyn Clair; Willett Spindler, master, and John Barns, mate, Schooner Isabel Spindler; Magnus Slater, master and David Flett, mate, dragger Sea Nymph.
As yet we have not received any declaration from Captain Leo Corkum of the schooner Irene Mary who has been quoted in the press as charging deliberate destruction of his gear by a foreign trawler. One reason for the delay in making this statement has been my desire to have his declaration before me in view of the specific assertions attributed to him in the press.
My officials and I have studied the information contained in the declarations so far given the department by the fishermen's union. Por the moment I shall not discuss them except to point out that, while the declarations do set out certain destruction's as occurring at certain times, they fail completely to give us any definite information as to the identity or nationality of the trawlers alleged to have been involved in the particular incidents to which the statements relate.
In outline, then, these are the facts of the case up to the moment. I should add to them the statement that further detailed in-

vestigation of the whole matter is being carried on actively by the department and by the Royal Canadian Mounted Police, both at sea and ashore.
On motion of Mr. Mackenzie the house adjourned at 6.05 p.m.
Thursday, August 15, 1946