1946-07-16

[Stage Direction]
Nineteenth report of the special committee on veterans affairs.-Mr. Tucker.


[Stage Direction]
On the orders of the day:
Mr. F. E. LENNARD (Wentworth):: I would like to ask the Secretary of State if the article appearing in the Evening Journal of July 9, to the effect that civil servants who resigned their positions to enlist in the armed forces are now all eligible to return to their positions without loss of salary or seniority, is correct.


Hon. PAUL MARTIN (Secretary of State):: That matter is now under careful review.



OFFICIAL SECRETS ACT


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I tabled yesterday the fourth and final report of the royal commission established to inquire into violations of the Official Secrets Act. I intended at the time to ask the house for permission to have copies of that report printed so that they might be distributed, and as there is likely to be a demand on the part of members for such copies I would move, seconded by the Minister of Justice (Mr. St. Laurent):
That 2.500 copies in the English language and 1,500 copies in the French language of the fourth and final report of the royal commission established by order in council P.C. 411 of February 5, 1946, laid on the table of the house yesterday, be printed forthwith, and that standing order 64 in relation thereto be suspended.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. ALISTAIR STEWART (Winnipeg North):: I wish to direct a question to the Minister of Mines and Resources. Under order in council 2071 listing additions to admissible classes under immigration regulations, what evidence must an orphan nephew or niece produce to show that his or her parents are dead?


Hon. J. A. GLEN (Minister of Mines and Resources):: The hon. gentleman sent me a copy of the question. The requirement of the order in council was that there should be evidence of a document establishing the identity of the holder. I am informed that it would be impossible to lay down a firm procedure with regard to that. Each case will be considered in the light of the circumstances obtaining. The present state of Europe and
Immigration

the destruction of official documents and records may make it hard for individual applicants to establsih their identity. The officers will be instructed to take whatever steps are necessary, either by way of affidavit or by the word of some relative, friend or someone in authority who knows the party, to establish the identity. Each case, of course, will depend very much on the circumstances.
Last week the hon. member for Trinity (Mr. Skey) asked me a question in regard to inspectional facilities which may be set up on the continent to deal with intending immigrants. One of the officers in London has been over in Paris dealing especially with the matter and he has now given me a report.
In my statement to the house on May 29 regarding changes made in the immigration regulations which extend the admissible classes to certain relatives of legal residents of Canada, I referred to the fact that owing to the shipping situation it would undoubtedly be the end of the present year before much accommodation would be available, and that inspectional facilities would be resumed in Europe as quickly as circumstances permit. As the immigration branch is being literally flooded with requests from residents of Canada for the immediate admission of their relatives overseas, I have concluded it would be proper to inform the house of the present situation and by this means assure those interested in the matter that the apparent delay in the movement of immigrants to Canada is unavoidable. There are two factors, both beyond the control of government, that determine when the immigrant movement will commence; they are: (1) shipping facilities and (2) travel conditions in Europe. Owing to the destruction of ocean tonnage during the war, there is an acute shortage of passenger vessels. Those operating to Canada from the United Kingdom are still bringing service personnel and their dependents, which means little accommodation will be available to the ordinary traveller for several months. There are, as yet, no passenger sailings from continental ports to Canada. In continental Europe travel from one country to another is still extremely difficult owing to lack of railway facilities and frontier controls; therefore a resumption of an immigrant movement under pre-war conditions from central European countries to ports of embarkation is not possible at this time.
The immigration branch has been conducting a survey of the situation with a view to reopening some inspectional points in northern Europe as quickly as possible. This involves consultation with the governments concerned, and appropriate action is being taken. Unless

unforeseen difficulties develop, I hope that two or three months from the present, immigration inspectional facilities for the civil and medical examination of immigrants will be available.
The situation with regard to central and southeastern Europe is still obscure. I regret it is not yet possible to furnish a definite statement with regard to immigrants from central and southeastern Europe. Regular steamship services are not yet in operation and I have already mentioned the difficulties of inland travel. If it becomes possible for immigrants to move to northern embarkation ports as before the war, the immigration staffs in these areas will conduct the examinations and grant the visas. That is, of course, when inspectional facilities are set up. If this is not possible, some other solution to the problem must be found, this being dependent upon steamship routes and schedules as yet not in operation.
I fully appreciate the desire of residents of Canada for an early reunion with relatives in Europe and elsewhere who are eligible to come to this country, and I can assure the house that everything possible is being done to accomplish this without any unnecessary delay.


Mr. LOCKHART:: May I ask the minister a supplementary question? In a compassionate case would the person from southern Europe be permitted to make the necessary arrangements through the London office if transportation could be secured?


James Allison Glen: All I' can say is that if the intending immigrant from Europe is able to get to London and have the medical inspection there, and if accommodation on vessels to this country can be obtained and the immigrant is admissible under the regulations, there will be no trouble.


Mr. HOMUTH:: Have any representations been made to the Russian government with regard to immigrants from the Russian occupied zones who wish to come to Canada?


James Allison Glen: That matter is not dealt with by the immigration department.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. WILLIAM IRVINE (Cariboo):: I
should like to direct a question to the Minister of Labour. Does the strike of the hard rock miners in British Columbia come under

___________The Budget-Mr. Smith (Calgary)
the jurisdiction of the federal Department of Labour ? If so, has a commissioner been appointed to replace Chief Justice Gordon Sloan who, I understand, has resigned?


Hon. HUMPHREY MITCHELL (Minister of Labour):: My hon. friend's question is divided into two parts. One is whether the strike comes under the jurisdiction of the federal Department of Labour, and the other is whether an appointment is to be made to replace Mr. Justice Sloan. The answer to the first question is that Mr. Justice Sloan was appointed on the recommendation of the Hon. George Pearson, Minister of Labour of British Columbia, after failure on the part of the conciliation service to bring about a settlement of the strike. The answer to the second part of the question is no. I am hopeful that Mr. Justice Sloan will be able to continue, if we can give him some departmental assistance, in an effort to conciliate the dispute.



PALESTINE


[Stage Direction]
On the orders of the day:
Mr. D. S. HARKNESS (Calgary East):: I should like to direct a question to the Prime Minister. It arises out of a considerable number of telegrams which the hon. member for Calgary West and I have received in the past few days. Will the Prime Minister make a statement as to Canada's attitude toward the situation in Palestine?


William Lyon Mackenzie King: My hon. friend sent me a copy of his question, and I shall give him what I believe to be an appropriate reply.
I do not believe that any useful purpose would be served by a statement on the situation in Palestine by the Canadian government at the present moment. Representatives of the United Kingdom cabinet, the foreign office, the colonial office and war office are discussing in London with representatives of the UhitedStates state department, war department and treasury, the recommendations recently submitted to the governments of the United Kingdom and the United States by the Anglo-American committee of inquiry which examined the problems of European Jewry and Palestine. The Canadian government hopes that the conversations now in progress will lead to a decision which will do justice to the various groups having a legitimate interest in Palestine.
My hon. friend will notice that I have placed emphasis on the present moment. I believe 63260-220
there are times and seasons for all things, but this I submit is not the moment, while these negotiations are on, for the government of Canada to take a particular part by way of making a statement such as the hon. member suggests.



SERVICE PERSONNEL

[Stage Direction]
PASSAGE PRIORITY FOR DEPENDENTS	[DOT]
On the orders of the day:
Frank Exton Lennard: I
should like to direct a question to the Minister of National Defence. Is the recent press announcement from the office of the high commissioner in London correct, to the effect that passage priority for servicemen's dependents has been discontinued?


Hon. DOUGLAS ABBOTT (Minister of National Defence):: I have not seen the press announcement referred to, but passage priority for servicemen's dependents has not been discontinued. The report may have arisen from the fact that the passage priority committee which existed in London, consisting of representatives of Canada House and the armed services, was discontinued on July 1, and the handling of priorities, so far as servicemen's dependents is concerned, rests with the service authorities.
The question of passage priority for what we refer to as non-entitled persons, namely, other relatives, fiancees and so on, is handled by a committee of the various shipping companies.



THE BUDGET


[Stage Direction]
The house resumed from Monday, July 15, consideration of the motion of Right Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Maclnnis.
Mr. A. L. SMITH (Calgary West):: Mr. Speaker, I had not intended taking part in the budget debate, but owing to incidents of the last few days I wish to discuss one subject, and one only, namely, that which was the occasion for your ruling of yesterday. May I express to you in your official capacity the greatest deference and respect, and in your private capacity a liking amounting almost to affection; but Your Honour forced me into the position of taking this opportunity of bringing to the attention of the house-I hate



The Budget-Mr. Smith (Calgary)
superlatives-one of the most important situations that has confronted this country in my time; and I have lived a considerable number of years during many of which I have been able to read and write and have some small jnderstanding of the problems of this country.
At the outset may I say that I shall make no criticism of anybody-capital, labour, or government. I deliberately choose this course, first because of the seriousness of the situation, and second that no one may allege, in derogation of what I have just said, that there is any political motive in the remarks I am now making. The steel strike in Canada must focus the attention of thinking men and women on the broad question of industrial relations. We have had many troubles recently. Some have been settled and some have not; but underlying all these I am sure it will be apparent to you, Mr. Speaker, and to all hon. members of this house that we cannot have that full employment without which there can be no high standard of living if peaceful industrial relations continue to' be interrupted from time to time by strikes or lockouts. In the recent past we have been flying from one crisis to another. Finally we adopted the method of appointing controllers. That worked on two occasions, but on this occasion it has not worked. I am not for a moment going so far as to say these men in the steel business are striking against their government. Technically that may be right, but I know perfectly well that in their honest inner consciousness they are not aware that they are doing any such thing. I think no one with any breadth of view or any understanding can just sit back and say here is a pattern which has come from the United States. Others may say here are the communists, endeavouring to create difficulty here and there. These may be very self-satisfying things for some of us to say, but no one who is honest with himself can doubt that all this agitation and unrest result from some cause, and it is this. It is the natural and proper seeking of the persons generally classified as labour to improve their standard of living, their living conditions, and to obtain for themselves some luxuries and comforts. I know there are exceptions to that; there is no doubt about it. All strikes cannot be justified, nor can all lockouts. At the bottom, however, is an effort on the part of many of our citizens to improve their position and their condition.
I do not know how much thought many of us have given to it, but I am quite sure at least the Minister of Reconstruction and Supply (Mr. Howe) knows the extent to which the steel industry is the foundation underlying our economy. I am not a prophet of doom or

ill or anything of the kind, but I do know that unless this thing is straightened out and a broader pattern set, while anyone's guess is as good as that of anyone else we do not need to peer far into the future to see our economy slowed down or perhaps brought to a standstill. It may be said that parliament is not the place in which these things should be dealt with. I disagree with that suggestion, for reasons which I shall give. It is not merely the fact that so many men are out in the steel industry. Nor does it do us much good to compare that number with the total number of workers in Canada, because I am quite sure most hon. members of this house, certainly those who come from industrialized areas, have already received telegrams and letters, as I have, though I do not live in an industrialized area, with respect to the present difficulty and its portent, and perhaps commenting gloomily upon its conclusion.
What is the situation in the steel industry to-day? In this I confine myself to the Stelco plant in the city of Hamilton. A few days ago an order in council was passed and tabled in this house. To-day, according to the newspapers, there are some 2,000 men in this plant and probably some 3,000 outside, those on strike being assisted in picketing by dissatisfied members of the typographical union and others. The gates through which the trains pass have been locked both from within and from without. An air strip has been constructed within the plant, and apparently they are going to call in the airborne troops, or at least the men in the plant will be supplied by air with the necessary food and clothing.
How can anyone here regard a situation Tike that without concern, where the least incident might touch off an explosion which would be the shame of Canada and I am sure the shame of everyone of us sitting here if we did not do all we could to see that it did not occur? That is the situation in Hamilton; and as we already know, if these things are prolonged they get worse before they get better. I hope the Minister of Reconstruction will correct me if I am wrong, but I have been credibly informed that he requires a considerable amount of coke from these steel plants to help keep the people of Ontario and Quebec warm this winter. I have heard that either he or Mr. Brunning has given the percentage that is required, but in any event we are told that coke is an urgent necessity in this province. What for? Not for manufacturing; not for turning the wheels of industry, but to keep the people warm, knowing as we do of the great shortage of fuel in the central provinces at the present time. I am also informed that if maintenance is not kept up, if these ovens are allowed to cool,

The Budget-Mr. Mackenzie King
some destruction may result, and that in any event it will take approximately a week before they will be in condition to produce coke. Again I wish the Minister would correct me if I am wrong. He nods his head in assent. I say these things to you, sir, and to hon. members, not because I have any special information, but in the hope that you may join me -and I am serious about it-in a realization of the crisis we are facing.
Now I turn to the suggestion I intend to make, but I think first I should give some reason for that suggestion. I said at the outset that I had no criticism of anyone. I hope the Minister of Labour (Mr. Mitchell) particularly, and the government, will not regard this as being critical. It is a simple statement of fact-that in this instance, affecting as it does our whole economy, whatever measures we have taken have failed. I make that simple statement of fact, not for a moment criticizing the measures which were taken. From there where can we go? In my judgment the only place we can go is to parliament.
For some reason unknown to me I was chosen as chairman of a committee of members among whom I sit, and as such I have had the opportunity of talking to a good many labouring people. Whether their complaints be true or untrue, this runs pretty much through the piece, that under our present set-up they have been unable to meet those who can definitely settle their problems. I am making no comment whatever as to whether that be true or untrue; but I know they believe it. It is a conviction, just as real, whether it. be true or whether it be not true.
My suggestion is this, that this house should immediately set up its industrial relations committee. To that committee should be invited-yea, brought, if necessary-those persons who might not like to come. I think I am not saying anything very unusual, because there, and only there, can meet the big three, so-called-the three important people, the consumer, labour, and management in industry. I am not suggesting that that committee will immediately settle the strike; but I am suggesting that it will devise machinery of procedure, backed by a statute passed by this parliament, not so much to settle strikes as to prevent them. That may be considered a criticism; the inference may be so regarded, but I trust it will not be taken in that way.
Then it seems to me to these people on strike, and those who are talking strike, such as the meat people, the railway people and so on, this parliament should say:-We have 63260-220J
given you the last and best tribunal this Dominion of Canada knows. Come there' with your problem. Meet your opponents face to face in the presence of that great referee, the consumer of Canada, as represented by members of parliament. And so may I say with a great deal of hope, and even more faith, that if we do something of the kind, certainly any union or any management which does not concur in that view will get very little sympathy from. me. We have brought them to the place they have been asking for all this time. No one can do more. If they do not care to accept that, then I for one will question the motives they so loudly proclaim at the present time.
Sir, I close with this. The matter is extremely urgent. I have endeavoured to make a helpful suggestion. I have criticized no one. But unless some major step be taken 1 fear very much for coming months. And I know that with labour interruptions, lockouts or strikes, coming as they are in series, there can be no peace, no prosperity, no happiness in this country. Development of governmental action means this, if it means anything, that while years ago we had small responsibility, now the first business of government has become the happiness and con-tenment of its people.
With respect I make this humble suggestion, trusting that even though it be not concurred in by all, it will be considered in the spirit in which 1 have offered it, in the fervent hope, and with some faith, that it may bear fruit in bringing peace to industry in Canada.


William Lyon Mackenzie King: Mr. Speaker, as the hon. member for Calgary West (Mr. Smith) will be the first to recognize, I have not had an opportunity to discuss with my colleagues the suggestion which he has made. But may I say at once that I would have no hesitancy at all in seconding the suggestion, and doing my utmost to have it carried out.
I have always taken the view with respect to industrial disputes that there were not two parties only, but that there were three. In fact, I have spoken of four, because to my mind the function of management is quite distinct from that of capital as a party in industry. But certainly industrial disputes do concern and affect more than capital, labour and management. They affect the community at large.
I believe I might go so far as to say the community in this instance is the entire Dominion of Canada. Perhaps I should not confine it to that, because I believe a serious strike, and particularly a strike in the iron

The Budget-Mr. Mackenzie King
and steel industry, might have repercussions which would be felt in lands beyond Canada. Anything which will adversely affect transportation and which will occasion loss in production of those articles which the consumer needs might have a grave effect upon conditions in Europe as well as in Canada. Therefore I for one would strongly favour any measure which has in it the promise of bringing out the truth with respect to differences in industrial disputes. I hold strongly that an agency qualified to bring out exact information is the most effective instrument by which to attain that end.
Now, what I think the parties to industrial disputes, both labour and capital, should not forget is that neither of them can hope to achieve the end they have in view in production except for what the community does. To begin with, the community has the ultimate ownership of resources of the country-or should have. It has the ownership. It may part with it for good and sufficient reason. Private property has its justification in that unless opportunity is given to individuals to risk by investment what they have in the way of savings, but very little in comparison will be obtained in production. There is justification in the greater efficiency to production as effected in many instances under private direction compared with what would be effected under government control. I believe in government control and in government ownership in certain industries and at certain times, but, as I have said over and over again, there are times and seasons for all things, and I believe that in this country there is still a place for individual initiative and private enterprise, which in the interests of all may well be carried much further than it has been.
May I say, coming a step further, with respect to the position of the community in these matters, that if it were not for the community as represented by parliament and its enactments-and here I am in full accord with my hon. friend who has just spoken-there would not be the preservation of law and order; there would not be the rights controlled by patent that there are with respect to invention; there would not be the agencies of transportation and communication which have to obtain their charters from parliament; there would not be the facilities for export; there would not be the agencies to conduct diplomatic relations between one country and other countries; international commerce would not be carried out on the scale on which government alone makes it possible to be carried out; there would not be the vast

industrial and commercial organization essential'to trade, for the sale of commodities and the obtaining of raw materials. All these things and many more are made possible by what the community itself does as represented by its representatives in parliament and through the laws which they enact. The time has come when we cannot emphasize too strongly the rights of the community in all matters of this kind.
Also I do believe that publicity is a much more effective remedy than penalty in bringing about justice in the settlement of an industrial dispute. Justice, as Burke has said, is the common concern of mankind; and the one way in which justice can be made to prevail in any relationship is that it should be based on known facts, known conditions, and known circumstances. I believe that there is one court, a court which will ultimately settle these matters fairly, and that is the court of public opinion. But public opinion has to be informed. Up to the present such agencies as we have had for dealing with industrial disputes have been those that would serve or tend to serve that particular end. We enacted our Industrial Disputes Investigation Act in order that the parties to industry might have full opportunity to have their case or their side of the case fully presented to the public. I recall very well when there were not in this country any laws framed to that particular end, not so much as a conciliation act; and I also recall that the first step which was taken by government-that is, the federal government-in Canada was taken as far back, or perhaps I should say as recently, as the year 1900, when this parliament enacted the Conciliation Act and made provision for conciliation and mediation in industrial disputes. Conciliation, I believe, is the very essence of the process which is most needed in settling industrial difficulties. But when conciliation does not succeed and mediation does not succeed something further is required, and the great handmaid of conciliation and mediation is a process of investigation,-of investigation under methods contrived by the state to bring out the truth, if it is at all possible to secure it, and the maximum of truth in regard to the existing situation. The next forward step following that of conciliation and mediation under legislative enactment was the Industrial Disputes Investigation Act, which gave to both capital and labour opportunities to have their representatives on a board. But the main feature of that measure was that it provided also that the community should be represented on the board; and it had a further provision, a most important one,

The Budget-Mr. Caldwell
namely that having regard to the large part which the community plays in serving the interests of the other parties, those other parties should refrain from disturbing the activities of the community or injuring the community until at least there has been an investigation and inquiry into the facts and the public fully informed.
Now, all these particular measures have been adopted and in this dispute applied up to a certain point. Recently another step has been taken in industrial disputes, which has been to appoint a controller either immediately after or before a dispute has developed into a strike or a lockout. This I believe is the first time that the government has appointed a controller a day or two in advance of the time at which a strike has actually taken place. I need not say that the government gave very careful consideration to that particular step. I am reminded by the Minister of Labour (Mr. Mitchell) that in the case of the packers' strike a controller was appointed before any strike took place. I think I was absent in Europe at the time that that appointment was made. At any rate I can say to the house, in connection with the present dispute that the government considered very carefully the wisdom of appointing a controller when we did, which was a day or two before the strike took place, or whether we should wait until after a strike had taken place. The case which was made out for the desirability of appointing a controller at the earliest moment was precisely that which has been put forward by the hon. member for Calgary West this afternoon. It was that a strike in the steel industry in Canada at this time, at this particular season, and with conditions what they are in this country and abroad, would be one of the most devastating happenings or might develop into one of the most devastating situations which it would be possible to imagine as growing out of an industrial dispute. The government decided to appoint a controller a day or two in advance of what it seemed would inevitably be a strike unless some further step was taken, and I believe we were right in so doing. That step was not taken without knowledge on the part of the administration that we would be told that we, the government of the day, were the ones who had the chief responsibility to see that the strike was ended. The government has responsibility for everything that affects the community, and we are prepared to take our full measure of responsibility for the step we have taken in that regard. I believe that had we not taken it, we would have been asked to-day why we had not appointed a controller a little in advance and given him the chance to exercise his good offices.
Now the controller has been appointed. There are also other agencies at work. I should hope that they will all continue earnestly to do what they can in helping to bring the parties to this dispute together and to effect a settlement. But I welcome and I am sure that this house as a whole will welcome the suggestion that a committee, composed of members of all parties in this house, should meet as soon as possible, bring before it the representatives of the parties to this dispute, and seek to get at the facts so that the public may be fully informed. Fortunately the industrial relations committee is already a standing committee of this house. Its chairman has been chosen. I have just been informed that the chairman is not in the house but that he is likely to be here at any moment; but if he should be absent from the city another chairman should be appointed. I for my part would suggest that before this afternoon is over steps be taken to have the committee on industrial relations called together at once, and that the committee arrange with the utmost expedition to have brought before it those who are the responsible leaders or representatives of labour and of capital and of the management of the industrial concerns affected, and that the committee be given powers of full investigation, under oath if so desired, of the whole situation, with a view to enlightening the Canadian people upon where responsibility for any continuance of the dispute most rests. I have no hesitation in saying that the Canadian people will wish justice done in this matter. They will also wish that the will of the people as a whole be respected over and above that of any party to a dispute.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, the very fact that the Prime Minister (Mr. Mackenzie King) has intervened in this discussion is confirmation of the view expressed on this side of the house yesterday that the present situation in the steel industry in Hamilton and throughout the country is one of grave urgency. Like the hon. member for Calgary West (Mr. Smith) I had not intended to speak this afternoon, but the situation having developed as it has, I feel compelled to say something about it. Unlike the hon. member for Calgary West I shall in all probability be critical at times, but I shall give praise where I think praise is due. This is a time when we must face facts. If those facts involve criticisms, or if they are disagreeable to any particular person, that should not prevent us from stating them.
May I also comment on the suggestion made by the hon. member for Calgary West and concurred in by the Prime Minister. I too
The Budf/et-Mr. Coldwell

accept that suggestion, but in the present circumstances it comes too late to deal with the situation that has developed. It is true that representatives of capital and labour could be called before a parliamentary committee; but bear in mind the fact that this dispute, which affects the steel industry particularly, is not a new dispute. Ever since last January we have known that a difficult situation was developing; and going back beyond that, we have known that the men in the steel mills at Sydney, Nova Scotia, felt they were discriminated against because their wage schedule was lower than that of men in the steel industry generally throughout Canada.


Mr. MacINNIS:: Ever since 1943.


Major James William Coldwell: Yes, since 1943. They have been waiting for three years to get a Settlement, to get what they considered to be but elementary justice.
The Prime Minister spoke of capital taking risks. May I suggest to him that the welfare of the people should in no wise be dependent upon any corporation or any organization taking a risk. The welfare of the people is of too great concern, it seems to me, to be a matter of risk on the part of any individuals for the sake of private gain or private profit. There is, of course, when that occurs always another sort of urgency, the necessity of obviating that risk, and that sometimes leads to further injustice.
I should like to say a word about the rights of the community. I am in whole-hearted accord with the Prime Minister when he says that these disputes between labour and management go far beyond the two sides to the dispute, that to-day the community is so deeply involved that when a struggle develops between a giant industrial organization and a great trade union the community is immediately affected. It seems to me that one of the things we have to emphasize as members of parliament, no matter where we sit, and we should emphasize it here in parliament, is that there is a social responsibility upon the leadership of industry and upon the leadership of labour, and this social responsibility can be exercised only when those who are obligated :o discharge it understand the direction in which they are going. One of the difficulties in all these labour disputes, and in modern labour disputes particularly, is that on one side you have capital thinking in terms of profit, the protection of the industry, the dividends that will accrue, and on the other side you have the men, who say that the urge on the part of the industry in which they are employed is not the welfare of all the com-
munity or of the people engaged in the industry but to a degree the matter of making private gain. It seems to me that that is a matter which parliament and the people must consider in relation to a subject such as this.
I think we all wish to see something done to prevent a recurrence of those unhappy labour disputes which arose after the first great w*ar. As. a westerner I have a vivid recollection of the Winnipeg strike of 1919. Yesterday I noted that one of the men, the late John Queen, who for over twenty years was a member of the Manitoba legislature and for seven years mayor of the city of Winnipeg had passed away. He was one of those who wTere arrested, and with three of his colleagues he was elected to the Manitoba legislature immediately after the strike, John Queen and two others being elected while they were in gaol. The loader of the movement for which I have the honour to speak this afternoon, the late J. S. Woodswmrth, was himself arrested in connection with that strike. Passions ran high, and the men were condemned at the time, but let us not forget that in the years that immediately followed, four of the leading figures in that dispute were elected to the Manitoba legislature and continued to sit there for many years, while the late leader of this movement, who was also arrested at the time, found, as did one of his colleagues of that day, a seat in this parliament a few years later.
The steel industry is a focal point in postwar industrial relations, and because of its importance, unless this dispute is settled I believe the strike will spread to other industries and in a few weeks we may be in a much more difficult position than that in which we find ourselves to-day.
I regret exceedingly that when the men decided to walk out, their offer of cooperation to the steel company at Hamilton was not accepted, as similar offers I understand were accepted by the Algoma Steel company and by the steel company at Sydney, Nova Scotia. The men offered to cooperate in banking the fires and maintaining the industry in good shape so that when the dispute was settled production could be resumed immediately. What I most regret, if I may say so to the Minister of Labour, is this. The offer, I understand, was made to the controller, and the controller also ignored it. When offers of this kind are made in good faith, it indicates at least an attempt on the part of the men to come to an understanding and agreement. Groups of men to-day are no longer in the position in which they were years ago. They

The Budget-Mr. Coldwell
will no longer accept with equanimity a refusal to take the preferred hand of assistance or of friendship.
I think it is greatly to be regretted that every conceivable method has been used not only to keep the plant in Hamilton operating but to take steps which are provocative to the men who have gone out on strike. According to the Montreal Gazette of to-day, the men who have remained in the plant and are working eight hours a day are in receipt of pay for twenty-four hours a day, and not only that; they are in receipt of a rate of wage ten cents an hour higher than their normal rate. If this be true, that in itself is provocative. We are told by the press that telephones have been installed for the convenience of the men who remain in the plant; that in addition to their wages they are receiving food and free cigarettes, and rumour has it that they are receiving free beer. They are there twenty-four hours a day. I do not say that they are getting beer twenty-four hours a day, because things would have been much worse than they are if that were true. I would ask the minister, when he speaks on this matter, as I presume he will, how these payments of wages and so on conform to the government regulations regarding wage rates. Surely this is a flagrant disregard of the rates of pay that have been approved. I suggest to the minister that section 44 of chapter 194 of the revised statutes of Ontario for 1937 forbids persons to eat and sleep and lodge in a factory or plant without special permission. Has such special permission been given? Who has applied for it? Was it applied for by the federal authority? If not, if the permission has not been granted, is the federal authority not condoning a violation of the laws of the province of Ontario?
We understand of course that the order has been issued to the controller to maintain maximum production, but immediately prior to this walkout, 2,000 of the workers in the Hamilton steel plant met in the Playhouse theatre and there the officials of the union gave a complete story of the negotiations over the last six months. I am not going to recount them, but I feel that the story of those negotiations shows undue delay. In addition to the trouble in the steel industry in Hamilton, there is other tension in that city. The united rubber workers of Firestone have been on strike for three weeks; the united electrical workers at the Westinghouse plant, and the typographical union employed by the local newspaper, the Spectator, have been out for some time. Hamilton has become as it were a strike centre, and that of course is bad not only for the city and that community but for the country.
I am going to say this to the Minister of Labour. The steel workers feel, rightly or wrongly, that the Department of Labour has not kept its pledges during these recent months, indeed these recent years, that the results of discussions have been unsatisfactory, and sometimes promises have been made that have not been carried out.


Humphrey Mitchell: Let us have the details.


Major James William Coldwell: Yes; I have some details. I say, that is the information that the men give me. The government's reluctance, if I may mention this, to expedite the negotiations, and then of course the maintenance of the differential to which I referred a few moments ago as between Nova Scotia and the Ontario mills, are some of the factors. These are provocative of trouble, and now we have some of the trouble. The minister will remember that widespread wage spreads existed during the war between steel rates and those of the secondary industries-for example, the automobile industry. Many hon. members of this house were in steel mills during the war and saw the operations in those mills. They know that in many instances the heavy, hot work in a steel mill is one of the most exacting forms of labour that a man can undertake.
The minister asked me a few moments ago what the details were. Well, the present dispute was first discussed in January of this year.


Humphrey Mitchell: I may say to my hon. friend that they have never been before a regional board.


Major James William Coldwell: 
Humphrey Mitchell: Per man?


Major James William Coldwell: Per man. The 19^ cents an hour demanded would mean this. They are working a forty-eight hour week, and on the basis of a forty-eight hour week, at 19i cents an hour, there would be involved a wage increase of $9.36 a week, in other words, one-half of the amount represented by the increased output of steel at the increased rate that one man would produce in a week. What the workers are really asking is not quite fifty per cent of the increase that the government of Canada granted unreservedly the steel companies themselves in April of this year.
There have been repeated discussions with the deputy minister of labour. On June 11 Mr. Justice Roach was appointed commissioner under P.C. 4020, and here came one of the delays which I think is regrettable, a delay which I understand was caused because Mr. Justice Roach was overloaded with judicial duties. But no meeting of the parties was arranged' until June 28, seventeen days after the appointment. May I add that it was long after the three plants had carried strike votes, not by small but by overwhelming majorities. At the beginning the Minister of Labour quite properly hoped that there would be one set of negotiations covering all three plants, but Stelco, the Hamilton concern, objected to that and wanted separate hearings. Their request -was sustained. During these negotiations certain admissions were made which are to be found in the statement made by the companies. In particular a significant admission was obtained from the Algoma Steel corporation. Labour costs have actually decreased since 1939. From 1939 to 1945 its payroll increased 133 per cent. Part of the increase was due to higher wages, and part, of course, to the larger working force employed. In the same period, tonnage produced increased by 221 per cent, so that the labour costs per ton declined from $18 to $13. In this debate the hon. member for Cape Breton South (Jdr. Gillis) gave other figures which confirm the statement which I have just placed on the record. This happened, of course, during a period when all costs increased, but prices of steel were also increased. In spite of the improved output per man, the government granted a further increase of $5 a ton in April of this year.


Mr. HOWE:: May I correct my hon. friend there? The price of steel was frozen in 1941 and did not change until the recent increase of $5 a ton.


Major James William Coldwell: I shall take that correction, but it does not affect my argument. If we examine the company's statements of this

year we find that in every year except one their profits increased. The exception was between 1941 and 1942, and when I looked up the record I found that the obvious reason why the amount available for profits and dividends had decreased was that there was a large increase in the amount provided for their depreciation fund in that particular year.


An hon. MEMBER:: A million dollars.


Major James William Coldwell: Yes. Let us not forget that there have been other strikes and controllers have been appointed. These strikes have been settled. In the British Columbia strike which was settled recently, Chief Justice Sloan recommended an increase in wages all across the board, overtime after forty-four hours for six months of the year, and overtime after forty hours for the other six months of the year, this being a seasonal occupation. But in connection with the wage dispute in this industry, while some increases of fifteen cents an hour have been granted recently in other industries, the appointment of the controller-I will not say deliberately, but certainly unfortunately-coincided with the minister's statement in the house that increases of ten cents an hour were as much as our economy could permit. He told the house that that was the advice of his experts.


Humphrey Mitchell: Of those best able to judge.


Major James William Coldwell: Yes.


Humphrey Mitchell: I have to take their advice.


Major James William Coldwell: I should like to know just who they are, how they arrived at that figure, and why it was arrived at after larger increases had already been granted in other industries. That is material to the point.
I do not want to attack the companies, I have not been attacking them, but I am going to point out to the house that the history of Steel Company of Canada, of Hamilton, indicates clearly that throughout the years it has opposed every attempt at unionism. Whenever a union was in the process of formation it consistently endeavoured to break it up, and in most cases it was successful. It is a powerful company, making great profits and dividends. Its own statement shows that last year it made a net profit, after all taxes had been paid, of over $4 million. Let me again say to the government that that profit of over $4 million last year was made before the company was allowed to increase its price by $5 a ton. It is estimated that a minimum of $5 million may be added to the profits of

The Budget-Mr. Coldwell
the company because of the price increase- I should not say the one company, but the steel industry, because of the increase granted. With the cost of living as high as it is, surely the union demand for a basic wage of $33.60 a week in this industry at this time, a forty-hour week and two weeks' vacation with pay, is justified. Indeed when we look at the government's own statements as to the necessary income to maintain a reasonable standard of living, this is low. That is all the workers are asking for, and when we recall that all during the war these men were toiling in that industry to turn out the steel for munitions of war-and they did it willingly all during these years-it is not unreasonable. They contributed out of their earnings to the victory loans campaigns; many of them and their sons were overseas, and they were promised that when the war was over Canada would become a country in which they would be given the opportunity to earn decent and adequate wages.
Before I close I wish to say one or two other things. I wish to speak for a moment about the order in council passed under the authority of the National Emergency Transitional Powers Act. This order, which has been emphasized in this dispute as it was not emphasized in former disputes-and because it was not emphasized it was not raised Specifically-is in some respects even more drastic than the order of President Truman which the congress of the United States turned down almost as soon as it was announced. Let us look at it for a moment. Section 12 provides:
Any person who (a) interferes with the exercise by the controller or any deputy controller of any of the powers, authorities and rights conferred upon him or (b) interferes with any employee or other person seeking to comply with the terms of this order or (c) counsels or procures any person to violate this order, shall be guilty of an offence and liable upon summary conviction to a fine not exceeding in the case of (a) five thousand dollars or imprisonment for a term not exceeding five years or to both such fine and such imprisonment, and in the case of (b) or (c) to a fine not exceeding five hundred dollars or imprisonment for a term not exceeding six months or to both such fine and such imprisonment.
That is a pretty strong penal clause, stronger than appears in most acts of parliament dealing with violations of our statutory law. To the average worker reading that penal clause it certainly looks as though the intention of orders in council of this description is to illegalize strikes altogether. In our democracy the strike in the final analysis is the only weapon the worker has. As long as labour is sold in the market place, as unfortunately it is, so long will it be that the only possible method of protest the worker has is to refuse to sell his 63260-221
labour. That is the strike. Under this order in council I think the penalties are excessive in the case of the worker. As far as a rich corporation is concerned, or a wealthy officer of a corporation, these penalties mean little. To the humble worker, however, they spell ruination; and I am told these penalties are being broadcast continuously over one or perhaps both of the Hamilton radio stations. It is true the Minister of Labour said yesterday this was to inform, the men of what the penalties were; but has the minister thought also that in effect this is an intimidation?
Now may I refer to just one other point. The hon. member for Calgary West raised the question of supplies being taken into the Hamilton plant by plane. There is no landing field in that plant. I understand that a strip has been put down, and that surrounding this plant and the field on which the planes land are tall buildings so that landing is a hazardous undertaking. I believe the Minister of Reconstruction and Supply has certain authority. You cannot prevent a plane from landing, in an emergency, on a field where landing is hazardous, but it is the minister's duty to see to it that a practice is not made of landing on an unlicensed and hazardous field. I call upon him to use his authority to see to it that this hazardous plane landing is not used for the breaking of a legitimate strike.


Clarence Decatur Howe: Will my hon. friend quote the legislation?


Major James William Coldwell: I have not the legislation before me.


Clarence Decatur Howe: I wish you would look it up.


Major James William Coldwell: I will not say legislation, but you have regulations.


Clarence Decatur Howe: A private flyer can land where he likes.


Major James William Coldwell: But he must not make a practice of landing on an unlicensed field under hazardous conditions. Is that not correct?


Clarence Decatur Howe: I have never seen that regulation.


Major James William Coldwell: Have you no regulations about safety?


Clarence Decatur Howe: We have.


Major James William Coldwell: My advice comes from someone who looked it up for me this morning. I am not quoting the exact phraseology of the regulation, but I am giving a summary of its intent. I should be surprised if the

The Budget-Mr. Coldwell

minister has not a regulation concerning matters of this sort. If not, it is time he had.


Clarence Decatur Howe: In any event I suggest this is minor law breaking in view of what is involved at the present time in that dispute. Far more serious offences against the law are taking place.


Major James William Coldwell: That may be so, but two wrongs do not make a right.


Clarence Decatur Howe: We may as well clean them all up at the same time.


Major James William Coldwell: I have said what I
wanted to say, Mr. Speaker. I believe we as a parliament not only have to take cognizance of a situation of this kind but have to do what we can to amend it. I do not believe we shall have satisfactory labour conditions as long as we leave the two parties in industry to struggle along between themselves. I believe, with the Prime Minister, that the community, the third party, has some interest in this; and from time to time in this house some of my colleagues and I have suggested that the time has arrived when in order to deal with matters of the kind we should have a national board or committee-whatever you like to call it; in the final analysis it means the same thing- representative of organized labour as such, of the employing interests as such, and of the community as such. When I say it should be representative of the community I do not mean in any narrow sense, but I believe interests in the community such as the consumer and the farmer have to be taken into account. So I suggest to the Minister of Labour that he qualify the statement he made last week regarding the ten-cent an hour increase. I suggest to him and to the boards considering the matter of wages in dispute that if they examine the statements of these companies and the wages of the workers-


Humphrey Mitchell: May I say to my hon. friend that the board never had a chance to do that in this case.


Major James William Coldwell: Why? Because the conciliator was appointed on June 11 and did not get in touch with the men until seventeen days later.


Humphrey Mitchell: May I say to my hon. friend that there is a concerted move across the country to go around these boards, and I used the new technique of appointing a commissioner in an endeavour to stabilize the situation. These boards were made up of just the people my hon. friend speaks of, nominated by labour and by the employers, with an impartial chairman.


Major James William Coldwell: An impartial chairman?


Humphrey Mitchell: As far as my hon. friend and I could be impartial.


Major James William Coldwell: Well, I am urging the minister to see to it that in view of the profits being made by these companies;. in view of the fact that the government itself allowed them to increase the price of steel by $5 a ton, the wages of the workers be sufficient to maintain them and their families in ordinary decent circumstances, and that the hours of work and the necessary holidays for recuperation be granted to the workers as they have requested at this time.


Mr. MEN  ARY@: Mr. Speaker-


Mr. GAUTHIER (Portneuf):: Monsieur
l'Orateur-


Mr. SPEAKER:: The hon. member for Portneuf (Mr. Gauthier).


Mr. JOHNSTON:: On a point of order, if *we are going to have a list, we should follow it. There are other hon. members who wish to speak.


Mr. MACKENZIE:: It makes no difference to the debate. You are not controlling the debate. It is a debate on the budget.


Pierre Gauthier: Mr. Speaker, after listening to the three distinguished speakers who have addressed the house this afternoon, I feel doubly daring in rising after them and using one of the official languages, the French tongue, the noblest, the purest and the most delectable, even if it is not understood.
I shall add but one word on the very ticklish question of strikes. I followed with the greatest attention the previous speakers. They kept cool and refrained from resorting to unfortunate language. Allow me, however, to state my personal opinion. I do not believe, when a strike has been declared, that either the employers or the employees may benefit by the opening and the continuation of a debate on this matter, in view of the divergent convictions held by the various parties represented in this house. We should have greater confidence in those who are entrusted with the settlement of such disputes, in the hope that there is left a little humanity in the heart of employers and a great deal of common sense in the mind of workers. I understand that in the past, some hon. members have intervened on behalf of workers and sought to bring into line companies whose treatment of their employees lacked all trace

The Budget-Mr. Gauthier (Portneuj)
of humanity. To my mind, instead of making a great number of speeches on the present strike, we ought to devote our efforts to the enactment of fair legislation dealing with the settlement of these disputes. We should also trust the Minister of Labour now in office (Mr. Mitchell) who has shown that he has plenty of grit as well as a sound judgment and the other qualifications required from a minister of labour imbued with principles for which all good Canadians should stand. The meetings dealing with the adjustment of these disputes should be conducted by those who are called to handle the settlement of these strikes. Let us trust the workers, the employers, and the mediators appointed by the government; let us trust those who will be chosen to represent the communities, as previous speakers have urged, and I feel sure that if we leave well enough alone, refrain from adding fuel to fire and show reasonable understanding, strikes will disappear and we will not witness the continuation of what we might term a baseball game. When there are more "strikes" than are necessary to put a man out, it is to be feared that a continuation of such strikes will be detrimental to the country. I do not wish to enter upon a field in which I am particularly interested; I do not wish to have my utterances misunderstood and especially misinterpreted. However, the Minister of Labour has sounded a warning during the seamen's strike, and more than ever before we must be on the lookout and fight the spread of certain subversive ideas which thrive when feeling runs high as it does during strikes. I did not say anything about communism, but everyone knows what I mean.
I have listened carefully to the budget speech. Even when I was sitting opposite I never doubted the competence of the present keeper of the treasury. He has a degree of resistance and patience rarely seen in a public man. His work is a thankless task and I am sure that all hon. members will agree that he has the required patience to do his work without complaining.
The budget mentioned a tax on cooperatives. In my constituency there are fourteen cooperatives with a membership of 850, according to the report of the province of Quebec. I wonder how my electors will react to the new budget and particularly to the proposed tax on cooperatives. Following the request of our local cooperatives I wrote to the department asking them to be careful and not be too 63260-221J
hard on cooperatives, but that if cooperatives are to be taxed the proposed tax should not endanger the cooperative movement, not only in my constituency, but in the whole province.
I understand that the federal treasurer, the Minister of Finance (Right Hon. Mr. Ilsley), followed the recommendations of the investigation commission on the taxation of cooperatives. As I told you, I shall await their reaction. I took part in the foundation of the cooperative movement and I would not like to see its efficiency and strength undermined by dangerous taxation. I have not been able to get a clear picture from the figures that have been quoted, but I hope that the cooperatives will not suffer too much. I would like to see them escape altogether. Particularly, I would not like to see the cooperative movement lessened in its scope, nor that the proposed taxation should prevent farmers, whether they produce milk, butter or cheese, or are engaged in horticulture, or ordinary or truck gardening, from being conscious of the strength or the efficiency of the cooperative movement. I am awaiting the reactions, before raising the matter again, should the directors of cooperatives find that there is a threat to the interests of that wonderful movement which has so much helped the farming community.
Another matter with which I am allowed to deal in the budget debate, has to do with those who were called and have answered the call issued under the National Resources Mobilization Act. Articles appear about them in many papers. Members discuss the subject and even include it in their speeches; the matter comes up in committees and is being dealt with by the civil service commission.
In my opinion, those who answered the call, who complied with the laws of their country should not be discriminated against by anyone. I understand that they did not enlist voluntarily, but it does not behoove me to pass on their present attitude- or to search their motives at the time. To my mind, it is high time that we should stop treating them as outcasts, heaping opprobrium upon them, holding a sword of Damocles over their heads, and casting the word "zombie" in their faces when they request jobs. They should enjoy all the advantages to which volunteers are entitled.
I realize there is a difference; however, they have complied with the law of the land and I fail to see why they should be maintained in a situation of inferiority and, especially, why we should make them feel it more than is necessary.
3498	COMMONS
The Budget-Mr. Gauthier (Porlneuf)
I shall not ask for an amnesty for fear of irritating those of my colleagues who jump in their seats every time this word is uttered.
It seems to me, that the time has come for Canada to assume a rank equal to that of the other countries of the world, with the exception of Russia, whose place I do not envy for Canada. All political prisoners have been released in every country except Russia where democracy is of a special kind. Therefore, I see no reason why we should not pass a regulation, an act of parliament or an order in council for the purpose of rehabilitating those who are at variance with the Department of National Defence.
To my mind, this state of affairs has obtained long enough at a time when farmers have no help and timber operators have to do without lumbermen. Why not settle this point, instead of letting the farmer run the risk of leaving his crop on the field, as he has done before? And why expose the lumber operator to the risk of being unable to fulfil his contracts to supply the domestic or foreign markets, especially at this time when, in all countries, reconstruction is in full swing?
Speaking of reconstruction, I should like to comment briefly on a project which, though not originating in my constituency, has developed considerably in my locality since the war's end. The belief is held in my constituency, a belief which incidentally is shared by many municipal officials and members of the clergy, that the best way to foster the reconstruction of our economy, and to do so in the most efficient manner, is to interest young men in developing initiative, by helping them to build up strong healthy bodies and providing them with the required knowledge, even those who do not plan to take up long special courses leading to the professions.
It is a plan that is clearly taking shape in my own constituency and for which the government should provide in its reconstruction programme. Several municipalities are planning to establish what they call social or recreational centres, comprising community halls that could be fitted with a complete gymnasium, a reading room and library, and, in the more populous centres, even a swimming-pool. Besides developing our young people's taste for worth-while books and teaching them physical culture, such projects would teach them to make better use of their leisure and increase their enjoyment of their rural environment. By thus learning to appreciate their environment, they shall grow fonder of it and thus feel less inclined to seek in the city the entertainment they can find in their home town.

I think that this problem deserves the government's consideration and that its solution would help solve another of equal importance, the exodus from rural districts.
I was a member of the Quebec legislature when it first considered this problem and I recall that even in my student days, our debating societies would tackle this problem even if it was not as acute as now. Statistics show that, at the present time, sixty-nine per cent of the population of my province live in the cities. That is an abnormal and undesirable situation, in view of the fact that urban centres depend on the land and its workers for the garden produce they consume in such quantities. Let us keep in mind the need of reestablishing the balance between the urban and rural populations. Let us concentrate our efforts in order to w'ard off disaster. This project, which I would call a reconstruction project, involving financial assistance for the opening of social centres, is most certainly an excellent way of helping the solution of the problem I have just mentioned, which has but too long existed and on which responsible authorities do not seem willing to concentrate their efforts.
I understand that the carrying out of such a plan would be easier if dominion-provincial agreements had been entered into. I have no doubt that the people are anxious that those agreements should materialize, and they can be concluded without any interference with the proper autonomy of the provinces. The constitutional aspect has been discussed, examined and scrutinized by the learned lawyers and notaries who sit in this house. I dare not deal with it, but I wish to quote a few excerpts from a letter which Sir Wilfrid Laurier wrote to the hon. Leon Mercier-Gouin on July 18, 1918: It expounds an idea which I wish to commend to this house and to the public. Sir Wilfrid Laurier said in that letter:
You have grasped that difference in pointing out that in our constitution everything that was not expressly assigned to the provinces belongs to the dominion; while in the ease of our neighbours, it is the opposite. Under the United States constitution, everything that was not assigned to the central authority is retained by the states. And you add "Is it not indeed more logical, more liberal and more equitable?"
On this point-said Sir Wilfrid Laurier-I am constrained to differ in toto from your views. I consider as quite superior our system which assigns to the federal authority all unenumera-ated powers. The object of the federal system is to form a distinct unit out of heterogeneous elements, while guaranteeing to each of the latter its own existence, that is to say without any amalgamation. The new state will then

The Budget-Mr. Gauthier (Portneuf)
necessarily be more solid and stronger if final authority is vested in the power which unites all those elements. The idea is still more obvious if the obieet of the federation is to create a new nation out of various elements formerly quite separate.	,
Switzerland came into being only when it assigned supreme authority to the federal council. Until then, the German Bernese, the French Genevan, the Italian-speaking man from Ticino, were first of all citizens of Berne, Geneva or the Ticino district.
Now each preserves the traditions, language and pride of Berne, of Geneva or of the Ticino, but paramount over them all is Switzerland, one and inseparable.
Daniel Webster, of all American statesmen, is the one who best and most forcibly showed the path finally taken by his country after much groping and an acute crisis. He tersely closes his finest address by saying: "Liberty and union now and forever, one and inseparable."
In my judgment, it cannot be questioned that, unless based on this principle, any federal association carries within itself the seeds of inescapable disruption.
The truth of this is exemplified by the Achaean league and all other attempts at federation in Italy and elsewhere. All perished through the same cause: weakness of the central authority.
The man in the street would reflect: "How can we expect provincial governments to be strong when the central authority is weak?"
We were given yesterday English copies of the Taschereau-Kellock commission on espionage.
Mr. Speaker informed us this afternoon that copies in French would be distributed; I wish to thank the Prime Minister (Mr. Mackenzie King) for having given orders to that effect.
When this matter first came up, some persons, most of whom were opponents of the party now in power, contended that the latter was playing politics, and that the quest for spies was mere eye-wash. In this very house, some hon. members considered that the government's intervention was too harsh. The right hon. the Minister of Justice (Mr. St. Laurent) was even taken to task in this respect. I then took the floor to defend those who believe that we must not beat around the bush when it comes to espionage; that we must take the situation in hand and mete out just punishment to those who break the laws of our country. I do not believe that the sentences were severe enough. If the same thing had happened in Russia, where a special brand of democracy is prevailing, I wonder whether the government of the very democratic generalissimo Stalin would even bother to launch an investigation.
I fail to see why the government should be charged with over-harshness. I believe they have been too lenient. Pravda itself, official organ of the Russian government asserted that the liberal administration was simply indulging in a bit of window-dressing to sway public opinion and make political capital by diverting attention to one group in particular, to a part of the world blessed with a sound democratic system, to wit the Union of Soviet Socialist Republics. While hunting, Mr. Speaker, one need not ask wild beasts their permission to fire in selfdefence. The government should remain constantly on the alert against the danger of communism. Every organization in Canada and in all other countries must take a realistic view of the present situation. They should count the number of nations under the heel of communism, subject to its influence or suffering the first inroads of its propaganda. We are not sufficiently aware of such a contingency. In Canada, more than anywhere else, we should keep our eyes open. I am not advocating, at this time, the banning of the Labour-Progressive party, but I strongly urge that every means at our disposal be used against the expansion of the communist ideology and of every other nefarious, subversive, dangerous theory which eventually will kill true and sound democracy in the world.
In conclusion, Mr. Speaker, I would give some advice to hon. members by quoting a prayer which is recited in the American legislature in Wisconsin. I found it in a well-informed newspaper of Quebec district, Le Soleil. I leave it to the consideration of this house.
God Almighty, Lord of all governments, help us iu the opening hours of this legislative session to realize the holiness of political affairs.
Deliver us from the subtle temptation of sin, when the voices of parties and interests are raised in this house.
Prevent us from thinking about future elections, instead of future generations.
Prevent us from discussing personalities instead of principles.
Grant that we may not think too much of securing majorities instead of considering the merits of required legislation.
Prevent us, when debates reach a decisive stage, from speaking for effect instead of telling the truth.
Grant that we derive no pleasure from seeking to coin witticisms instead of searching for facts.
3500	COMMONS
7'he Budget-Mr. Gauthier (Portneuf)
Prevent us from considering the party an end in itself rather than a means to an end.
That, I believe, is a Liberal principle.
We not only beg for Thy protection against temptations which beset us in these legislative chambers but also ask that we may more fully understand the meaning of government in order the better to serve the interests of those who have entrusted into .our hands the government of this republic.
Help us to remember that future generations are part of our electoral body, although, as yet. they have no voice in the elections.
Grant that we respect truth more than the past. Help us to make a servant rather than a master of our party.
May we understand the futility of winning elections were we to lose our energy.
Help us to remain independent of tyrannical majorities and argumentative minorities when the truth is with neither of them.
May our motives be inspired by sincerity and our methods enlightened by science.
Help us to serve the masses without flattering them, to believe in them without bowing to superstition.
To this advice, Mr. Speaker, I shall add another. Some hon. members, during the war, urged the government in power to spend billions of dollars, or as much as possible, to make a superhuman effort, to spare neither capital nor manpower, for, to their minds, the expenditures were never large enough. To-day, these same hon. members, who are still sitting in this house urge the government to reduce taxes and expenditures. I ask them to cast a look back and tell us frankly whether they do not believe that someone is bound to pay for the debts made during the war.
They should also remember that those debts should be paid by those taxpayers who can afford to pay them, and not by the small wage earners. Even though our treasurer's efforts disappointed the small wage earners and those who look after their interests, and although the budget did not fulfil all our hopes, we must admit that he has tried to reduce the burden of income tax which rests upon the shoulders of persons in the lower income bracket. Those who approved of billion dollar expenditures and took pleasure in putting the heat on the government, as they said, should now apply that same heat to their own way of reasoning and admit that although the excess profits tax has not been abolished the treasurer tried to alleviate the burden of the small wage earners, upon whom rests the entire economic set-up of a nation. It should be remembered that when France lost the war of 1870, under Napoleon III, it was saved by the well-lined stockings of the thrifty French people. In my opinion, the administrators of finance of every nation should remember that sound economy is not based on daring, but rather on good old

fashioned thrift, on that kind of wisdom that prompts the small wage earner to think twice before risking the fruits of his toil.


Mr. W. GARFIELD CASE (Grey North) (Text):: Mr. Speaker, I think I should say at the outset it is a source of regret that I do not understand the beautiful language of my French brethren. I try to follow them and to listen to the various emphases so that I may appreciate the translation the next day. The hon. member who preceded me mentioned the name of Daniel Webster. I remembered that there was a Webster who found a meaning for everything, and I then thought I was following very closely the remarks he had to make.
This afternoon we have listened to remarks made by hon. members with regard to a serious situation currently in existence in our country; and while it is not necessarily my purpose to comment upon or to add to what has already been said, I feel it shows what the desire is on the part of the government when the Prime Minister (Mr. Mackenzie King) rises in his place and endorses a suggestion made by the member for Calgary West (Mr. Smith), a member of His Majesty's loyal opposition. I say that because it gives me possibly a greater appreciation of the responsibility of this chamber and the desire of the government to seek advice from those who are sincere in their efforts to make some contribution to the common weal.
It is interesting for those who, like myself, have not been very long in this great House of Commons to think back to the days when we were travelling up and down the concession lines of our various constituencies appealing to our electors and presenting to them the policy which we believed would be in the best interests of the country; and on the great day of days, election day, when we were endorsed by our constituents, those who were selected to follow the majority leader were charged with a greater responsibility in a sense than those whose policies were not endorsed. Yet the opposition, according to our system of government, is in a sense not entirely relieved of responsibility. The responsibility which I feel is mine and my colleagues' is that of being reasonably critical of the policies presented by the administration; that is to say, I do not believe that the opposition is necessarily expected to agree, where you have a two-party system of government, with the policies which the government advocates. Then, too, I feel that an opposition member might be expected to state his personal views. As far as I am aware, there are no restrictions upon a member stating his personal views or indicating to the

The Budget-Mr. Case
government some method whereby he believes the administration could be improved. We had evidence of that to-day and evidence of the government's willingness to accept from the opposition some suggestions which, if given effect to, might improve a serious situation that now exists in the country.
I have grown to appreciate more and more the House of Commons. In common with many other members, I was quite disillusioned after my experience in the first special session following the famous by-election. I learned that an individual, like individuals throughout the land, counts as an individual; yet within this chamber he is provided with certain protection and is privileged to state his views, which can be interpreted by those who are willing to listen to his remarks.
I arrived just about the time the high office of His Majesty's representative was being changed, when we were in a sense saying farewell to those who had so graciously occupied this position with distinction to themselves and credit indeed to the British isles. Then we welcomed a great soldier. At that time I thought that in our wisdom it would be well if we could determine that at all times in the future the governor general of Canada would be a representative from some other part of the British commonwealth of nations. I do not say that in any sense belittling the talent we have in Canada or those who would indeed lend dignity and honour to this high office. But it is a link with other parts of the empire. In my opinion any part of the empire would be proud to have as a governor general a man of the ability of Field Marshal Smuts of South Africa. When I think of the great men of my day and generation, particularly of my day, I can think of no greater man in the British empire than Field Marshal Smuts, one of the world's greatest scientists, an intellectual. a student of world affairs, a scholar. I am not making any comparison with other men, because I think we all recognize that during the trying and difficult days and dark years there was in the centre of this great empire a voice which lent determination and courage to all within its range. Its range was great, because by modern science radio carried this great voice from the heart of the empire to inspire us to greater effort. Indeed it played a great part in the winning of the war. I am referring now, of course, to the Right Hon. Winston Churchill.
I should like to go one step further and offer a suggestion which I have had in my mind for some time. In fact I have been a constant advocate of this matter, namely, the appointment of lieutenant governors to
the various provinces. While I have just said that I hoped we would never change our system-but I should like to see our future governors general selected from the various parts of the British commonwealth of nations -I believe there is much to be said for the appointment of lieutenant governors from the various provinces to the various provinces.
I have always felt that there is something tangible in the spoken word, and a governor general who is appointed from some other part of the empire can come to us from some other land and tell us about their problems, and the methods they employ, which would give us greater appreciation of them. Then, when he returns to his native land or to the place whence he came he could tell something about Canada and its many advantages. So with the provinces; if we had a citizen from British Columbia appointed lieutenant governor of Ontario or a citizen from Quebec appointed lieutenant governor of Manitoba, Saskatchewan or Ontario, he would have an opportunity to tell the citizens of this province something of the advantages that his particular province has to offer. At the same time a citizen of Ontario would be telling something of the advantages that Ontario has to offer. In this way we would probably become more united than we are at the present time. I see no reason why such a plan should not be seriously considered by the authorities who would make a decision of this kind. I want it understood, of course, that I am speaking for myself and offering this personal observation without any weight of policy or anything of that kind behind it.
I now feel that I should say something about the budget. I can think .back to that memorable night when the Minister of Finance (Mr. Ilsley) presented the -budget and outlined the fiscal policy of the administration for the supposedly ensuing or current fiscal year. The galleries of the House of Commons were loaded to the gunwales; people were here in large numbers expecting something which would give them a sense of direction, a hope that the government was awake to the problems of the nation; indeed, they anticipated something which never occurred.
I have not had a great deal of opportunity to study the budget carefully. It involved a huge volume of comment, and was a notable address. There was some degree of showmanship evidenced, which, up until that time, I had not given the Minister of Finance credit for possessing. As he proceeded with his presentation, he said that "presently I shall announce substantial reductions in the personal income tax," or words to that effect. That kept us on the alert, anticipating what the reduc-
The Budget-Mr. Case

tions would amount to. Shortly we were to learn, and then I began to realize that the Minister of Finance must indeed have had his tongue in his cheek because the reductions were more or less a myth. I then began to think things over and to ask myself if the budget was an abortion or an illegitimate child; certainly it was premature. By its very terms it is not due to be bom until January 1, 1947, and it will be nurtured by the revenues and increment from the calendar year 1946. What does this mean? In effect it means that for the first time in history, to my knowledge, we have had presented in the House of Commons a budget, the effect of which was not immediate. As a matter of fact the budget has always been looked upon as a secret document. Its contents are held closely and rigidly guarded, because therein is contained a matter of policy to which the government intends to give immediate effect. Therefore, in reality we now have a budget that is not in effect until January 1, 1947, and is currently to be in effect for a period of only three months, or a matter of one-quarter of the year.


Mr. ILSLEY:: That is incorrect. That statement has been made several times, but it is incorrect.


Wilfrid Garfield Case: The minister says it is not correct, but in the main it is correct. I am not going to deal with the matter of schedules, the effect of which may be current in some instances; but in the main there are no exemptions for the income taxpayer until January 1, 1947.


James Lorimer Ilsley: No. I was dealing with the question of this three months' theory; that parliament has the right to legislate only until the end of the fiscal year, and that therefore any reductions in the budget end on March 31, 1947. That is a completely erroneous and groundless theory, and an incorrect statement.


Wilfrid Garfield Case: I submit, Mr. Speaker, that this parliament has no right to legislate beyond March 31, 1947, when a new budget will be brought down. In that I am supported by the best constitutional authorities outside the house. All we have before us at the present moment is a promise of what will be in effect until this administration is prepared to give effect to some other change. That does not necessarily mean that it is in effect until-


James Lorimer Ilsley: In the last budget, which was brought down on October 12 last, we legislated for the whole year 1946.


Wilfrid Garfield Case: The minister is now bringing down a budget, the terms of which do not become effective until January 1, 1947; and I am told by those who should be able to

speak with some knowledge about constitutional procedure that it has always -been an accepted practice that the current session, can legislate for the fiscal year; that in reality the budget is in effect until March 31, 1947, and that when a new budget is introduced its terms may be made retroactive to the beginning of the fiscal year. This places industry and businessmen in a difficult position. They find it hard to make plans, because they have no definite advice and no reason to believe that changes will not be made. As a matter of fact, if no changes are anticipated that puts the budget in a worse light than ever. Certainly, if this administration would introduce that measure of economy which has been advocated and urged by the opposition, they should be able to lower taxation during the coming fiscal year. If they are unable to do so that makes the position even worse than I thought.
I have had an opportunity to consult with many citizens of this country, and I can tell the Minister of Finance that they think they have been flim-flammed by this budget. I think it will go down in history as the flimflam budggt, because I have failed to discover in it anything constructive, anything that would give industiy any incentive to plan, or any measure of relief for the overburdened taxpayers. It contains nothing -which would help us compete in the markets of. the world, which we are so fond of claiming as our definite objective and which we must achieve if we are to bring about that industrial production by means of which we hope to maintain our internal economy. Great as the home market is, Canada is in the unusual position that she must anticipate tremendous export markets. I am asking myself whether there is in this budget any yardstick that can be used by those planning for the future to determine their security. It would seem tome that we are constantly moving, without any definite guidance from the administration and without any hope of relief which would put us in a better competitive position. As a matter of fact I think we are becoming more handicapped.
I said there is no evidence of economy on the part of the administration. A good deal has been said about this subject, but I should like to refer to one department in particular.
I have in mind the public information service.
I am quite ready to admit that perhaps this was necessary in war time, when news of a privileged nature had to be given out with a good deal of discretion, but to-day the public information service is doing nothing more or less than disseminating party propa-

The Budget-Mr. Case
ganda. To-day the taxpayers of Canada are paying a great deal of money to be told how good their government really is. I do not wonder that hon. gentlemen want to keep that propaganda before the people, because there is a feeling abroad that the government is in great difficulty. I do not mean that in the sense that they have not a great many loyal supporters, but among their followers there are those who are very much in doubt. The central government can set an example. We now find regularly on our desks another sample of propaganda entitled The Saskatchewan News, a weekly information and news bulletin issued by the bureau of publications, legislative buildings, Regina, Saskatchewan. They are simply following the lead of this government. If we have reached the point where each party in power feels it can use the government printing presses and legislative machinery to tell all the good things about itself, then I think democracy is in great danger, because it will become more and more difficult-and we see the situation developing in connection with radio-for the opposition to make itself heard, though I do not suppose the government worries a great deal about the opposition.
Apart from the budget, Mr. Speaker, I want to say that in a sense I can appreciate some of the difficulties of the government. I realize that I can stand here and tell the government where in my opinion they are going wrong; yet they may reply that in doing so I am assuming no responsibility. However, if I can bring home a picture which would indicate that I have at least an appreciation of their difficulties, and if I indicate my belief that those difficulties can be solved, then I think I may have made some contribution to the councils of the nation. It was regrettable, of course, that the government failed-and I say that advisedly-at the dominion-provincial conference, when they sought to obtain tax adjustments. But it must be remembered, and I think it only fair to say, that it was the federal government alone that was creating double taxation. It cannot be said that the conference failed for any party reasons, regardless of the fact that the two central provinces were represented by premiers who would not be considered kith and kin of the Liberal administration. I can think back to another day and another conference, when the delegation from the province of Ontario was headed by that greatest of all Liberal thinkers, Hon. Mitchell Hepburn, and when no common ground could be agreed upon even to commence the conference. So that the latest failure cannot be charged to the parties represented at that meeting.
In common with other hon. members, I was privileged to sit in the gallery of the senate chamber and view the scene below. My mind went back to another day, of which I have learned in history. I am thinking now of those who met together and became the fathers of confederation. The last conference presented a great object lesson of the tremendous difficulties that were faced by the fathers of confederation. Yet they did not dare to fail. Under the most trying conditions they brought about in Canada the birth of a great nation. How was this accomplished? It was accomplished by a series of compromises. It has often been said that, after all, confederation is nothing more than a compromise, and that it is held together by a delicate thread. I believe in days gone by the Prime Minister has had high regard for that delicate balance which has maintained confederation, and some standard of unification in our country.
I do not know whether he departed from those feelings, but the hon. member for Mus-koka-Ontario (Mr. Macdonnell) has said he felt that if the Prime Minister had been ten years younger he could have saved the conference. I would not prophesy. Perhaps I might say that if he had been ten years older he would have saved it. But the fact remains that the conference failed, and its failure is the responsibility of someone. I do not think we can charge that failure entirely to one group, but rather to a combination of them. There was a group, however, which sought to give leadership. The type of leadership evident on that occasion now appears in the budget, and it is set out in a take-it-or-leave-it proposition.
Since sixty per cent of the population of Canada is in Ontario and Quebec, I am wondering what the effect on confederation will be if certain provinces accept the minister's proposals. What will be the effect if those provinces which accept constitute only twenty per cent of the population? In my view, the great danger is that Canada will be divided, that it will set the west against the central provinces or the central provinces against the east.
The situation is indeed serious. As a matter of fact it is so serious that no one should seek to make political capital out of it. My hope is that the Prime Minister and his administration will seek to reconvene the conference; that it might meet in a spirit of compromise and better understanding, resolve its differences and arrive at something which would offer some
The Budget-Mr. Case

advantage, so far as unity in Canada is concerned. I believe that our national unity hangs in the balance at this critical moment, and that we must encourage our government to do everything in its power to follow those principles of unity it has professed in the past. While I do not endorse in toto the practice the government has followed, I know it has always contended that it has sought greater unity in Canada.
More recently we have had brought about parity with the United States dollar. I do not know what the administration proposes to do; but I do know that our natural resources which have been developed, those which remain undeveloped and others in process of development will suffer most. I am one who believes that this generation has a right to exploit to the full the natural resources of this great land. But I say that by careful planning we should seek to replace all replaceable natural resources, so that those who are yet to come will enjoy some of the advantages we enjoy.
Our lumbering, mining and fishing industries will be affected by parity with the United States dollar. I believe I might properly ask where the pressure came from which caused the government to take action, apparently without consultation with anyone. It must have known that these vital industries would be critically affected.
We have before us the problem of maintaining; price ceilings. That could have been a reason for the change-perhaps a good one. It is possible the government felt that parity with the United States dollar would help maintain the ceilings on our goods. But I am wondering if we are going to succeed. I am not demonstrating any lack of interest in this vital problem, because I know very well what would happen if the dam gave way. I think of a nation's purchasing power as a constant source of pressure against a resisting force, a force which one might compare with an obstruction across a stream. One will notice that if the water ever goes over the top of a dam the structure is destroyed; and in my view that is the problem we face to-day. If we are to maintain price controls tremendous selfdiscipline must be exercised by the people of Canada.
Let me place on record some of the figures involved so that hon. members may have a greater appreciation of the situation. I shall not mention the authority for my figures, but I can assure the house that it is a thoroughly reliable one. I accept the challenge of anyone who doubts it. These figures show that personal individual holdings in liquid resources, made up of bank deposits and government

bonds, amount to about $1,025 per capita. I give this figure in comparison with that of 1939, at which time we had about $300 per capita, and with that of 1926 with a per capita of $185. To-day we have a total of six and one-quarter billions in bank deposits alone, and six billions in bonds held by Canadians, These are bank deposits, and currency in the hands of individuals. This is money in the tills of merchants, money that is hoarded or hidden. Even our bonds must be considered liquid resources, because every Canadian bondholder understands that if he wishes to realize on his bonds he is free to cash them.
This serves to increase the pressure upon the limited supply of goods. If I were to remind the house that we financed the speculative bubble of 1929 on about two and a third billions of dollars, I believe hon. members would appreciate something of the courage of the Minister of Finance and his colleagues when they seek to continue to give effect to this method of controlling prices. There was an incentive during'the war period to pass things by; people were willing to do without. People were willing to conserve their resources in the hope of winning the war. But there is at the present time the tendency-and the debate to which we listened this afternoon in relation to labour and their tendency to strike for higher wages provides all the evidence necessary to substantiate the statement I am about to make-on the part of our citizens to feel that unless they make their purchases now, increased costs will push the price of products beyond their reach. They do not know what may happen. We have that as well to contend with. So that I feel that we have in this budget all the elements which will make problems greater for the administration in controlling prices. There is no incentive for industry to produce, which is the only thing that, in my opinion, will avoid inflation. More goods is the one remedy which would help to stem the dangers of inflation. Yet we find a tendency for labour to be seeking higher wages. Higher wages mean higher costs. This discourages industry; it discourages capital investment and it reduces production; yet no one is satisfied. That is one of the problems we face in the matter of subsidies. Those who receive them feel they are not getting enough; those taxpayers who are paying the subsidies feel that the recipients are receiving too much. It seems to me that the more government regulation you have, the more restricted our production will -be. As a matter of fact, if we continue with price ceilings on natural products for a great while longer we shall live in an economy of scarcity

The Budget-Mr. Ashby
in what has always been recognized as a land of plenty, because incentives are needed to produce.
I am reminded that my time has nearly expired. I shall take only a moment or two
more.


Some hon. MEMBERS:: Go ahead.


Wilfrid Garfield Case: I say to you, Mr. Speaker, in conclusion that I believe the real challenge to labour to-day is to seek to share the responsibilities of industry. Industry should be alive to the possibility of having labour represented on its boards of directors, so that they will know more about the problems of industry and will be able to appreciate better those problems. After all, labour is making an investment as well as capital, and each should share to some extent the advantages and the profits which result therefrom.
I will conclude by saying that the privileges we enjoy as a democratic country have been dearly won; let us seek to measure up to our responsibilities.
Mr. PATRICK H. ASHBY (Edmonton East): Mr. Speaker, the Social Credit group warmly and heartily endorses the recommendation which has been made by the hon. member for Calgary West (Mr. Smith). We feel that if the industrial relations committee of this house is set up at once, and if both parties to the present steel strike and all pending and threatened strikes are required to present themselves before the committee to give evidence and to attempt to iron out their difficulties, great good is sure to come of it. We believe that the people of Canada will welcome such an action on the part of this parliament. It is undoubtedly the wish of Canadians everywhere that this body do all it can to bring about industrial peace in Canada. But let it be understood that the setting up of this committee should in no way relieve the government from its responsibilities. I trust that the readiness of the Prime Minister (Mr. Mackenzie King) to accept the proposal of the hon. member for Calgary West does not mean that the government will attempt to shift its responsibility to an all-party committee. The government will be expected by the people to get busy in a real and determined effort to remove at the earliest possible time the basic reasons for labour unrest. It will be expected also to do all in its power through the use of present machinery to prevent further strikes and to reconcile differences between capital and labour.
I have not brought down with me the many hundreds of letters which I have received, complaining about the excessive taxation that has been imposed upon the people of Canada. But from just one day's issue of papers that I received I clipped out enough clippings to fill up the whole of my time if I read even half of them. Here are some headings: "The burden of taxation", "Protests high taxation", "Income tax on the salaried man", "The cost of living index above wartime peak", "The high taxes"; and so on all the way through. I am not going to burden hon. members; I notice most of them have gone out; they are so sick and tired of listening to all these speeches that I do not blame them, and I do not want to add to their trials and tribulations. But I was interested in taxation and I thought I would go to the library and find out something about it. I obtained a book the name of which is, "The Principles and Methods of Taxation", and I read in it a definition of what taxes are:
Taxes are a portion of private wealth exacted from individuals by the state for the purpose of meeting the expenditures essential to carrying out the functions of government.
The writer of that statement did not know what he was talking about. He had not the faintest idea of what he was saying. Yet he was the president of a great university, a great economist, lecturing to students. Imagine it! Another great university president a short time ago made another statement which was absolutely imbecilic. What the man said was, "We must devise ways and means to provide full employment for all."


Charles Edward Johnston: That sounds like the Liberal party policy.


Mr. ASHBY:: Let us analyse what the man said. What is full employment? Employment is a means to some end. If I had a pile of stones on my lawn and I wanted to get rid of them I would have either to hire somebody, giving him employment, or to employ myself and remove those stones elsewhere. The object of employment is to obtain a result. So what that poor imbecilic university president said in effect was, "Ways and means must be found to provide ways and means", which is pure, unadulterated insanity. No wonder we are in such a terrible predicament. We have passed through the stone age, I am told; I was not living in that age. We have since passed through the iron age and various other ages; we have reached the economic age, the age of money, and now we are getting into the age of illusions. It does not matter to whom one speaks; if they have been through these training institutions that we call universities, although they are no longer really universities at all, but just training institutions, elaborated
The Budget-Mr. Ashby

barber schools, where human minds are moulded to a pattern, they are incapable of thinking clearly. I had a friend, a university professor. I know many of them, and they are all fine fellows, but they cannot help their training. This man told me that the tariff was a result, that it was not a method at all. He said, "You can vote for a high tariff, or you can vote for a low tariff." The man did not understand that a tariff was a means to some end. He could not distinguish between means and ends, between methods and results, and a great many other people have the same difficulty. Let me read a paragraph from a clipping I have here. Listen to this poor fellow. I pity the poor soul. He is perfectly honest but he just does not understand, and he is not alone in that; it is universal. He says:
I am a white collar worker and not making any more than in 1941. Before the war I paid no income tax. All during the war and now, I pay $400 to $500 a year. We are supposed to be exempt $1,260. Yes, if you don't make more, but if you make, say $2,000, even though married, you are taxed on the $2,000. No exemption except $125 allowed off the taxes for your wife. Try and keep her on it!
What struck me about that was this. We are living in an age of illusions. This man says: "But if you make more than SI,200, say S2,000." Do you get the idea? Does that man make $2,000? Yet everywhere you will meet people who will say: "I made $50 on that deal." Did he make $50? A man came to me in my office only the other day and was complaining. He said: "I make so much a week and have to pay so much out for taxes and all that." I asked him, "Do you really make that much?" "Yes," he said. Then I asked him, "Why don't you make twice as much?" He said, "I would if I could." "Why can't you?" I asked him. "If you know how to make so much money, why can't you go ahead and make more?" Of course, what the man meant was that he received so much money. I can turn up almost any page of Hansard and find where members have been speaking of the terrific costs of government. But does it cost money? No, it does not. Then why use that word? The war did not cost a cent. The prices we have paid for things used in the war are something else entirely. Let us get down to sane reasoning. What does anything cost? What is the true cost?
A man, by the name of Christ, lived some two thousand years ago, and it seems to me that that individual had the greatest mind of any man who ever lived on this earth. What did Christ say? "Seek ye the truth." Is it true that it costs money for things? This chair did not cost money. The price paid for it is something else entirely. I tried to explain that

to a friend of mine a while ago. I said, "You have a ton of coal and I have the price of the coal, $10, we will say. I want the coal to keep me warm, and so I give you the $10 for the coal. You accept the money and I accept the coal." But did that coal cost $10? "No," I said, "you have the $10 and I have the coal. I take the coal and burn it in the furnace." Then in the spring of the year we meet again and I say, "Now what did the coal cost? It did not cost $10, because there it is, you still have it-or someone else has it. The cost of the coal was what was consumed in producing it." The cost of keeping me warm was the coal, for it has been consumed; we no longer have it.
If we went into the bush and built ourselves a shack, what would be the cost of the shack? We can perhaps say that the true cost of production is the consumption of all that is produced over a given period of time, but let us briefly say that the cost is what is consumed in producing it. So what is the cost of building a shack? The cost is what has been consumed in building it. We no longer have the trees growing that went into it in the form of lumber. We no longer have the rock in the soil. These things have gone into building the home. The home did not cost money to build but it cost the things that went into making it. If we can only get away from some of these illusions that so many people have, we shall begin to make some real progress.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Patrick Harvey Ashby: Mr. Speaker, at six o'clock I was discussing this age of illusion and was dealing with costs. One lion, member told me that he did not follow me, that he was confused regarding the difference between price and cost of goods. I should like to use this illustration in that connection. If I had $10 and required a pair of shoes I could use that $10 to obtain the shoes. Money is a means to an end and not an end in itself; all that I would do would be to hand the $10 to the retailer; he would transfer the shoes from his possession to mine, and I would wear them if they fitted me. The shoes did not cost $10. That was the price paid for them.
For the benefit of the hon. member who asked me the question, may I use this other illustration? If we had, we will say, a sack of wheat which we wanted transported from a granary to a feed barn and we used a wheel-

The Budget-Mr. Ashby.
barrow for the purpose, would it cost the wheelbarrow? Of course not. I would suggest to anyone who is confused about price and cost that he repeat to himself when eating soup, for example, "The soup costs the spoon." That would be just as insane as it would be to say that it cost money.
I mention this age of illusion for this purpose, because we are finding it more and more difficult to convey our thoughts from one to another, and this matter of costs and making money and so on is all the result of the infiltration of an alien agency which is trying to undermine the whole democratic system of life and all the institutions which we have developed, or rather which have naturally evolved in the course of the ages.
The British commonwealth of nations is the greatest united nations organization ever known in human history, and the British commonwealth of nations, this great united nations organization, is under attack. It is being attacked not directly but indirectly. We see it all the time; and this is one method of attacking it, by means of the great illusions that are created in- the minds of people, as though our systems are wrong, whereas our systems are not. What is wrong is the abuse of these systems. There is nothing wrong with automobiles, but there is something wrong with the improper use of them, and it is exactly the same with our financial institutions.
I wish to congratulate the Minister of Finance on holding on to this system, because if he ever gives way to all the pressure brought to bear upon him, we may lose it and this money system is the greatest system that has ever been devised by man. May I read a brief extract to illustrate that contention:
Remove the abuses, and the more one understands of our systems, the more beautiful and subtle and delicate and appropriate do they appear, and the more desirous and pledged one becomes to see them administered correctly, and according to their nature, and the less one itches to destroy.
Let us be careful. Never destroy until we have a better system or structure which is tested and tried and which will take the place of that which we seek to destroy. The writer
says:
I do not believe that anyone in the least susceptible to natural beauty in its less obvious and picturesque guises, studying dispassionately the intricate and nicely-adjusted system of balances and checks that operate in the different departments of the money system, could reasonably refuse it their admiration. Take any of them-the investment market; bank clearing house; particularly the foreign bill market and exchange regulations, so unjustly blamed as the prime cause of the restriction of international trade, and consider how well designed they are
to fulfil their genuine purposes. Yet it is this growth, resulting from centuries of well-directed traditional husbandry, that the monetary reformers would ruthlessly hack at, fracturing vital connections and displacing fine adjustments, to substitute something which they imagine they personally will be better able to manipulate; something artificial and quite alien and unresponsive to human reactions. For your planner is the congenital enemy of nature, because she is not susceptible to manipulation,
[DOT] and when she is manipulated hits back with a ruthlessness on a par with his own.
What it amounts to really, is this; that the impulse behind wholesale reform, what we call social planning, the planned economy, is the impulse to alter and break up nature ... It is precisely "management" not "money" that has brought society to the pass in which it is. Our trouble lies, not in the monetary system, but in the abuse and exploitation of the system for their own ends by those in control of it, and the failure on the part of all of us to control the controllers.
I think that illustrates the point I wish to make. I was greatly disappointed in the budget when it was brought down. For weeks we had talked about it. It did not matter where one went one heard comments about the budget, and as the weeks passed on my hopes began to rise. I became more expectant every moment, and finally the time arrived when the budget was to be brought down. The bell rang; I rushed out of my office and rushed back to comb my hair. I was so excited and expectant that I had to go back again to get. my coat. However, I finally arrived in my place prepared to see the budget brought in. But what a disappointment it was. I am not an old political war horse; I am just-


Angus MacInnis: A new one.


Patrick Harvey Ashby: I am a newcomer, and perhaps my hopes were too high. I looked for too much. I heard but little that went on. My eyes were glued to the door, for I expected that any moment the doors would open; there would be a blast of silver trumpets followed by a couple of dram majorettes and then a long procession of sober-faced dignitaries, followed finally by the budget carried aloft on a golden platter, looking for all the world like a great suet pudding decorated with cabbage leaves and a sprig of spring onions. But instead of that, all I saw was a weary looking Minister of Finance and a couple of sober-faced deputy ministers who looked as though, if they had a good farm dinner, they would develop flatulent colic. I am not blaming the Minister of Finance at all. I get letters-I would not dare to read them-blaming the Minister of Finance for everything.
The Budget-Mr. Ashby


Charles Edward Johnston: Give an indication of what they are.


Patrick Harvey Ashby: I am not blaming the Minister of Finance, but I shall have to explain to my constituents that the minister is but the representative of the people, although I presume they must hold him responsible. I do not think the Minister of Finance drew up the budget. I believe it was drawn up by the technicians, the civil servants behind the scene who are ruling Canada to-day. I was speaking to one of my friends-I have many in the civil service. I went down to see them one day and one of them said: "Members of parliament come and go but we live on forever." A few days ago I paid another visit to him. I was not watching the time, and when I read an article here it reminded me of it. I shall put it on the record later. As I say, I went down to his office least expecting the welcome I would get when the doors of the prison on the comer here called the Confederation building opened. I just got to the doors when a bell rang or something happened. The doors flew open and out flushed the greatest flood of humanity I ever saw in all my life. They were mostly members of the fair sex. I was swept half a block down the street before I was able to get hold of a barber's pole and swing into the door. The barber said, "You are next," and would have had me in the chair had I not told him it was a mistake. These girls were so happy to get away from their prison, as they call it, that they were singing, "Give me a home where the buffalo roam." The tune that I sang had a mournful air. I sang, "Why can't every man have two or three wives?" I think I shall have that stricken from Hansard because if my wife sees it, she will be down here in a day or two. However, there is more than one way of calling to one's mate, anyway.
The other day I attended the meeting of the marine and fisheries committee. A bill was brought before us for approval. I looked at the bill. It occurred to me that there was no name on it and I wondered who drew up that bill for us to pass. The next question which occurred to me was, who gave the individual the authority to draw it up? I asked to be informed but I never found out. The point I want to make is that we are working upside down, as it were, wrong end to. Instead of us as representatives assembling here and giving instructions to the civil servants, the experts, as to what results the people want and the experts devising ways and means of producing these results, we merely assemble here and pass bills, some of which we know little or nothing about, and

we are actually given instructions by the civil servants. That is entirely wrong, and until we rectify it we are going to get nowhere. Some of the people in the United States are going to get ahead of us unless we "step on the gas", as it were.
I should like to read two short paragraphs from the American Magazine of July, at page 39:
Congress has enacted-and the president has endorsed-legislation designed to plan for permanent prosperity. Furthermore, any actions taken under the law will be taken within the framework of our own free enterprise system-
Let us remember that.

and through our existing democratic processes. We have committed ourselves to a goal. Here it is:
"The congress hereby declares that it is the continuing policy and responsibility of the federal government ... to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining . . . conditions under which there will be afforded useful employment-
Useful employment, not employment such as we see here in this city, where thousands of people are merely shifting bunches of paper from one place to another and making marks on them, but useful employment. I continue: -opportunities, including self-employment-
That is what we call the leisure state where human beings may employ themselves at the kind of work they like to do best. I continue with the article:
-for those willing, able, and seeking work, and to promote maximum employment, production, and purchasing power."
That, in a mouthful, is the goal. You will note, in the last clause, that congress recognized it is futile to expect everyone to have jobs unless our industries have a full supply of orders and unless all our people have enough money in their pockets to buy all the goods our farms and factories can produce.
That is the greatest forward step our sister nation to the south of us has ever taken. I am making this direct recommendation to the government , namely, to see to it that something of this kind is introduced immediately, and that means without delay.
The solution of our problems can be found by simplifying government.


Mr. HERRIDGE:: I should like the hon. member in his own inimitable and fabalistic style, to give an illustration of his simplified form of government.


Patrick Harvey Ashby: I shall be indeed pleased to comply with the hon. member's request. It is a well known fact that historians have great difficulty in obtaining detailed data regarding some of our early parliamentarians. It

The Budget-Mr. Ashby
requires years of work, of probing into attics, cellars and archives to obtain this information. In the first place, in the olden days they spelled badly; in the second place, they had no parliamentary reporters, and in the third place, they did not keep any records anyway. But I should like to take hon. members back to one of our early sessions of Parliament. There must have been a time in past political history when we switched off the main road which by this time would have led us into an era of blessed prosperity and happiness, on to a side trail which has brought us into our present state of dissatisfaction and unrest. We have to go beyond the crossroads where we turned off; we have to go beyond the early days of confederation; we have to go beyond Westminster.
I have in mind one of the greatest sessions of parliament in British history, a session presided over, it may interest the Minister of Labour (Mr. Mitchell) to learn, by an ancestor of his; at least they were both men of Sussex. I refer, of course, to that illustrious prime minister, that most potent of all potentates, his high and mighty self the Right Honourable Sir Bonehead Piltdown, whose thick but noble skull was discovered buried in the gravel of the Sussex downs where for thousands of years, in death as in life, it defied all comers, the forces of nature, the elements and time itself, to emerge at last triumphant and again become a world-known character. I can picture a brief session of parliament in that period, when they were not bothered with figures of billions and billions and billions, but just went about their business in a natural way. I can visualize the members of parliament in committee. I can visualize the prime minister himself walking up and down the floor of his apartment as he pondered the perplexing problems that were probing his pericranium. I can see that great man make up his mind and give a few lusty scratches on the floor of his cave with his great feet, sending bits of bones and small stones clattering in the general direction of his wives, and testing the the thongs which bound a five-pound rock to the end of his knobkerry; then, girding about his loins an Aberdeen sporran, stride forth to parliament in all his glory, just as the bell rang. I can visualize that great prime minister smite with his stone hammer his official boulder which he used as an altar, calling the assembled members of parliament to order.
If hon. members will permit me, I should like to quote the whole of his speech at that time. I could quote from almost any Hansard, because every great prime minister from that day to this has repeated the same address. Our
own Prime Minister spoke to us last December 13, I think it was, or about then, on the same subject. The address was:	"Members of
parliament are here to represent the people of their constituencies." That is all there was to it; brevity was his keynote. In other words, it was not really a speech at all but a warning that members of parliament should attend to their business, which is not making long and windy speeches. If I may disgress for just a moment, I have learned why we come here and sit around month after month, accomplishing nothing. It is because whenever a problem is brought before us we immediately make up all the words we possibly can, assemble them into lengthy speeches and completely bury the problem under an avalanche of words. Then, when we can not longer see the problem before us, we go on to the next one.
This brief session of parliament went right through without let or hindrance. The prime minister was a stern man, but on occasion he was very tender-hearted. At this moment he turned toward his page girls. I see hon. members are interested, and I should point out that this great prime minister was an expert judge at all beauty contests, the winners of which were honoured by being made page girls. By the door were beautiful blondes and lovely brunettes, their hair hanging over their smooth shoulders clear down to-well, down to here. Turning to the page girls the prime minister said, "Open the doors. Bring in the deputy ministers." The doors were opened. The policeman outside could be plainly heard saying, "Right! Right! Right!" You will notice, Mr. Speaker, there were no leftist movements in those days. In marched the deputy ministers. "Halt!" The doors were closed behind them. The prime minister then delivered his usual speech; facing them, he said in a stern voice, "Hear ye!" That's all. No sooner had he uttered those words than the deputy ministers cupped both hands behind their ears. No excuses were accepted; either they heard what was said, or the prime minister found it necessary to send his knobkerry to the cleaners. Next the prime minister turned to the members of parliament and asked this simple question: "What results do the people desire?" They should know; they are representing the people. There was a little commotion; finally one member was pushed to the front, and then and there gained the honourable title of Mr. Speaker, a custom which has been followed to this day; and Mr. Speaker stood up and said-


An hon. MEMBER:: Order!
The Budget-Mr. Ashby


Patrick Harvey Ashby: Mr. Speaker, glancing behind him to see that his supporters were still standing there, said in a clear voice, "The people demand that all taxation on incomes of S2,000 for married persons and Sl,500 for single persons be immediately abolished, with no increase in the price of goods and no lessening of social services; that all women who survive to the age of fifty years shall be paid their rightful allowance of S50 a month; that all men who survive to the age of sixty years shall be paid their rightful allowance of S50 a month, and that there shall be no spying or prying into their private affairs, either, by guess, by gosh and by golly, so help me, amen." And he collapsed into the arms of his staunch and loyal supporters who held him up on his feet.


James Horace King: Order. I regret to inform the hon. member that he has spoken for forty minutes.
Mr. IV. A. ROBINSON (Simcoe East): Mr. Speaker, I am afraid I shall have considerable difficulty in following the hon. member who has just spoken; but if he can convince the coal dealers in my vicinity that a ton of coal cost nothing, as he attempted to convince the house this afternoon, I should like him to pay me an extended visit next winter.


Patrick Harvey Ashby: On a point of order, Mr. Speaker, the hon. member misstates what I said when he assumes I said a ton of coal cost nothing. I said it did not cost money.


Mr. ROBINSON (Simcoe East):: If I can get a ton of coal without money it is the same thing to me.
It is with some diffidence, Mr. Speaker, that I rise to offer a few remarks at this late stage of the debate, and I only hope I may be able to make a worth-while contribution. I have listened with a great deal of interest to the previous speakers, and I shall tty to avoid anything of a repetitious nature. I cannot, however, avoid making some reference to what appears to be the main criticism of the budget by hon. members immediately opposite, namely, the charge of lack of economy in public expenditures. This charge was levelled very briefly by the hon. member for Muskoka-Ontario (Mr. Macdonnell) in the words, "spend, spend; borrow, borrow, but never save, save," as they appear at page 3215 of Hansard. This has been repeated in various forms, but unfortunately at much greater length, by many hon. members on the opposite side of the house.
It is extremely difficult for me, and I know it will be extremely difficult for the people of this country', to place any credence in a charge

of this kind, when it is directed at the Minister of Finance (Mr. Ilsley). I recall clearly the first occasion upon which I heard him speak. It was some years ago, before he had assumed his present position, at a meeting of service clubs in my' own constituency of Simcoe East. His subject at that time was a comparison of municipal and governmental financing. I can still remember the homely reference he made on that occasion to a rural municipality in his native Nova Scotia. There each taxpayer examined each item of municipal expenditure with an eagle eye, and could calculate to the last penny the effect of such expenditure upon his individual'tax bill. Woe betide the municipal council which made unnecessary disbursements. Those who heard the minister speak on that occasion were convinced that he would apply the same principle of careful scrutiny of expenditures to the broader field of national finance. I am happy to say the people of Canada have given him an opportunity to do so, and in the last few years have entrusted him with the raising and spending of sums of money such as have never before been dreamed of in this country. I do not think there is present in the house, or outside it, anyone who would dare say that the minister did not do a magnificent job.
As I said before, I put no credence in this type of criticism, and I feel sure the people of the country still look to the Minister of Finance as the watchdog of the treasury.


Karl Kenneth Homuth: Have you read the auditor general's report?


William Alfred Robinson: If the hon. member wishes to ask a question I wish he would rise.


Karl Kenneth Homuth: If you will sit down, I will. Have you read the auditor general's report?


William Alfred Robinson: I do not know what that has to do with my present remarks.


Karl Kenneth Homuth: A great deal.


William Alfred Robinson: I can assure the hon. member that I have read as much of it as he has.
There is another trend in criticism of the budget to which I should like to refer. I have detected a tendency on the part of critics of the budget to consider it as a thing unto itself rather than as merely one link in our progressing economy. Less than a year ago we concluded the most disastrous war in history. In that war, to the everlasting credit of the people of Canada, we pulled our full share, or more than our full share if considered

The Budget-Mr. Robinson (Simcoe)
on a per capita basis. Following that war, and again to the everlasting credit of the Canadian people who submitted to every restriction and accepted every sacrifice, we find ourselves in Canada in a favoured and enviable position.
No one on the treasury benches in front of me has attempted to take unto himself any credit for this fortunate result. That credit has been and will be left to the people of Canada, where it belongs. But, from my secluded seat under the somewhat improved lights, I want to say it is high time that some of the gentlemen in front of me who directed and planned this great effort of the Canadian people should be given some small measure of approbation, rather than constant criticism. Further, not only did they plan and direct our war effort, but similarly they laid the foundation, well in advance, for our transition to a peace-time economy.
The present budget is, in my opinion, not a thing unto itself. It is in its essence merely one link in a far-reaching plan of transition for Canada, tempered by the exigencies of a devastated world where we must in all humanity go to the help of people less fortunate than ourselves-starving peoples, homeless peoples, naked peoples.
In this light I cannot agree with those critics of the budget who complain, for instance, that the income tax exemptions are not sufficiently high. I think every hon. member would like to see the tax exemptions greatly increased; but at the same time I should like to think there is no hon. member who would espouse such a proposal to the detriment of the national economy.
I have indicated previously that I consider the present budget merely a part of a continuing phase of our Canadian economy. I have no doubt that the minister has already fitted this budget to its proper place in this phase of transition, and is now looking to the future. I should like to commend to him at this time one aspect of the Canadian picture which I hope will have his serious consideration, and which I trust will fit easily and naturally into the Canadian economy. In this I refer to shipping and shipbuilding, and I hope I may be pardoned if I make somewhat extended remarks in reference to my own riding. In the riding from which I come we are proud, and I think justifiably, of our position in the shipping and ship-building industry. We are similarly proud of other things-our productive farms, our factories in Orillia, Midland and Penetanguishene, which helped so much, as the Minister of Reconstruction and Supply (Mr. Howe) well knows, to create the goods necessary to the winning
of the war. We are proud of our historic past and our scenic beauties, our lakes and islands and beaches, which attract so many visitors to the province of Ontario.
(Translation):
Allow me, at this time, to point out with pride to the fact that the northern part of my constituency is dotted with villages inhabited by worthy French-Canadian families who contribute to the prosperity of the district.
(Text)
I hope my constituents and hon. members will forgive me if I do not dwell at too great length on the beauties of my riding, but rather confine myself to the subject I mentioned earlier. Shipbuilding in my riding is centred in the town of Midland on Georgian bay. Our experience in this industry goes back many years, in so far as the building of wooden ships is concerned. In fact, I think even today there may be on the great lakes hulls built half a century or more ago by Ganton Dobson. We commenced the construction of steel vessels during the first great war, and launched at the Midland shipyards a series of vessels such as the War Fiend and certain sister ships with similar ferocious names. Following that war, the yard constructed a number of cargo ships, such as the Ashcroft, the Stada-cona, the Gleneagles and the Lemoyne. I con-not allow this occasion to pass without paying a well deserved tribute to the Lemoyne. Launched at Midland in the middle twenties, she was then and still is the queen of the great lakes. Built to carry huge cargoes of grain, being 633 feet in over-all length and the only ship on the lakes with 70-foot breadth, she has been unapproachable as a record carrier of wheat. Some of her records are as follows: wheat, 1929, 571.885 bushels; corn, 1938, 534,000 bushels; rye, 1927, 538,817 bushels'; soft coal, 1944, 18,116 net tons.
During the thirties the yard which produced such magnificent vessels was unfortunately closed, and it was only with the coming of war that we returned to something of our old position in the shipbuilding field. Then the big yard came to life again and we saw on its ways corvettes, mine-sweepers and powerful oceangoing tugs. Also, our smaller yards, which had previously been engaged in the construction of small pleasure craft, expanded rapidly to turn out Fairmiles and wooden mine-sweepers. I assure you, Mr. Speaker, we felt very close to one important phase of the war effort. We saw these vessels in course of construction. We saw young Canadian officers come to Midland, commission their ships and sail away with their first command. We took into our homes young English boys, made old by fatigue and strain, whose ships had sunk beneath them
3512	COMMONS
The Budget-Mr. Robinson (Simcoe)
and who only remained with us until a new one was launched and they could return with it to duty on the high seas. Yes; we felt very close to the war effort and I think we did a job. Here is the record:
Hunters Boat Works at Orillia produced seven Fairmiles.
Grew Boat Works at Penetanguishene constructed eight Fairmiles and two wooden
mine-sweepers.
Port Carling Boat Works at Honey Harbour launched ten Fairmiles and two wooden minesweepers.
Midland Boat Works at Midland produced eight Fairmiles and two wooden minesweepers.
Midland Shipyards Limited delivered five Western Isle trawlers, eleven ocean-going tugs and eleven corvettes.
I should like to give the names of these corvettes, although they are already well known in Canadian naval annals. They are the Midland, Brantford, Strathroy, Thorlock, LaMaria, Willowers, Lindsay, Cobourg, Whitby, Parry Sound and West York.
I wish now to turn for a moment from shipbuilding to shipping and to indicate our intense interest in the grain trade, which is the backbone of Canadian lake shipping. We have at Midland and Port McNicol five modern elevators with a combined capacity of 20.750.000 bushels. The individual units can handle grain at rates ranging from 12,000 bushels an hour to 40,000 bushels an hour. Our elevators play a large part in the annual grain movement. To illustrate, I have before me some figures for 1945 on the destination of the major grains and soy beans at ports in Canada and the United States, which customarily receive grain in large volumes. These are as follows:
Bushels
Grain received at ports in United
States	 343,111,905
Grain received at ports in Canada 331.168,647
Total	 674,280,552
Grain received at all Georgian bay
ports	 172,123,052
Grain received at Midland and
Port McXicoll	 131,297,923
In other words, out of a total of some 331,000.000 bushels of grain received at Canadian ports in 1945, two ports in my riding received some 131,000,000 bushels.
These immense cargoes were carried in our great lakes fleet, of which Canadians can be justly proud. This fleet consists of 226 vessels with an aggregate gross tonnage of 611,795 tons. Even at the risk of boring the house with figures, I should like to give a picture of the make-up and disposition of

that fleet among the various trades. According to the annual report of the Lake Carriers' Association, at the close of the great lakes navigation season in 1945, commercially employed vessels of Canadian registry were as follows: First, we had bulk freighters in the iron ore trade, including nineteen steamers in ore, coal and grain trades, and nineteen steamers in grain and coal trades. Second, classified as bulk freight, self-unloading vessels, we had nine steamers, self-unloading conveyors in the coal trade, and two steamers, self-unloading conveyors, in the cement and coal trade. Third, classified as bulk freight vessels in mixed trades, we had five steamers of the upper lakes fleet in coal and grain trades, eighty steamers in the lower lakes fleet in coal, grain and paper, and twelve other ships in various trades, including paper. Then we had twelve barges in coal, grain and pulpwood. Of package freighters we had twenty. Of oil tankers we had thirty-four. The remainder of the fleet was made up of car ferries, three, and passenger vessels, eleven: a total of 226.
I think this presents an impressive picture of Canadian lake shipping, but there is another side of the picture which should be told. Some of our ships are very old. To quote a few at random: James B. Bade, of the vintage of 1894: Algorail, 1901; Laketon, 1903; Bayton, 1904; Westmount, 1917; Matthewston, 1922, and Royalton, 1924. In other words, the average age of our fleet, and especially our upper lakes fleet, is high, and this means, at the least, increased cost of operation and, at the worst, actual obsolescence in some cases.
Although my remarks have been directed primarily at the role of my own riding in shipbuilding and shipping, I hope that two general points will have emerged. First, I think it is clear that we have in Canada shipyards which are ready, willing and competent to build ships of all kinds. Second, we have in Canada a great lakes fleet of which we can be very proud but which is in need of new blood. The inference seems to me to be obvious, and I commend to the minister and to the government that in any deliberations as to our future economy these two points be kept well to the forefront. Let us see to it that these related industries, shipping and shipbuilding, play an increasingly important part in the national scene.


Mr. E. L. BOWERMAN (Prince Albert):: Mr. Speaker, I am afraid that my remarks regarding my constituency will not be quite along the lines to which I have just listened from the hon. member who has just spoken.

The Budget-Mr. Bowerman
I rise to take part in this debate because of a sense of responsibility to my constituents who will expect me to present to the government, through the Minister of Finance (Mr. Ilsley) in this budget debate, their reactions to his proposals as well as their pressing and immediate needs.
At this time it is not my purpose to deal in detail with the budget proposals, because I understand that we shall have an opportunity to do that in committee and my colleagues have also presented in an able manner our views as a group. My purpose this evening will be to present the views of my constituents as I see them in relation to pressing problems of a constituency nature.
First, may I express my support of the amendment which has been moved by my colleague the hon. member for Vancouver East (Mr. Maclnnis). I believe that by far the greater majority of my constituents feel as I do about this amendment, that it sets forth clearly and concisely their objections to what the Minister of Finance is pleased to call essentially a peace-time budget providing for the financial requirements of the first post-war year which is wholly a year of peace. I am quite sure that all the socialists and most of the Liberals and Conservatives of the riding of Prince Albert feel, as I do, that the minister's budget does not provide as it should and could for the peace, happiness and prosperity of our citizens. While I am sure that these are the views of my constituents, I am also sure that they would, as I do, want to express appreciation and admiration for the manner in which the Minister of Finance has so conscientiously and unhesitatingly given of his energy and talents to the winning of the war. True, it has been our privilege to view most of his efforts from a distance. Nevertheless we feel that we can say, and say it sincerely, that no one in the government is more worthy of the honours bestowed upon him than the present Minister of Finance.
I should like at this time to thank all other hon. members of this house for the kindness and consideration that I have received from them, especially from the various ministers of the government when I have sought information from them or their departments on behalf of my constituents; also the senior members of the house who have in so many ways assisted us newcomers to this parliament to find our way around, as it were. During my first session here there were times when I sat in what seemed to me a maze of formalities that tended rather to hinder than facilitate the business of the house. I say that it seemed that way to
me. Then there is a certain book in which the precise way for members of parliament to get in and out of difficulties is set forth, but what has puzzled me and still does is that there are times when its citations are to be considered in the light of one or more other books and previous rulings, depending, as I see it, on which side of the house the difficulties arise. Then the Speaker is called upon to rule on the matter.


Mr. DEPUTY SPEAKER:: Order. The hon. member is reflecting on the action of the Speaker.


Edward LeRoy Bowerman: I am very sorry that Your Honour is taking that position, and I am sure that if you will wait for a moment you will be satisfied with what I intended to say. It was not my intention to reflect in any way upon the Speaker; but may I say with all deference and respect that I have not been at all times sure that the rulings given could be found in any of the books mentioned. However, let me hasten to add that the gracious manner in which the Speaker and the Deputy Speaker have given their decisions has gone a long way toward dispelling from my mind any thought but that their desire was to fulfil, in a fair and impartial way, duties of the high office placed upon them by this parliament. Having said that in all sincerity, I return to the amendment to the amendment.
We in this group look with grave concern and with a measure of regret upon the failfire of the government to implement their preelection pledges and to fulfil the promises made only a year ago to the Canadian people from coast to coast. By no stretch of the imagination can I agree with the minister when he refers to this year as being "wholly a year of peace." There is no peace, either abroad or at home, and there can be no peace in our land until this government, or some other, recognizes the fact that the labourer is worthy of his hire, be he farmer, artisan or what-not, and that he is entitled to a fair share of the national wealth and a voice in determining his hours of labour and the conditions under which that labour shall be performed.
It is, in my opinion, absurd even to think of calling this a year of peace, when at the very time of the preparation of this budget thousands were out of employment and thousands were out on strike, because that is the only means they know by which their demands are heeded. Further, thousands are homeless because this government has failed to plan for peace as it planned for war. Even as we continue this debate, thousands have just gone out on strike who have patiently and consistently for months, yes, all during the war,
The Budget

Mr. Bowerman

given of their best, hoping against hope that the conditions under which they laboured and the "take-home pay" they received might be improved to a point where there would be an assurance of a decent standard of living. In the face of all this, the government brings down a budget that leaves the burden of taxation upon the backs of those who can least afford to pay while, practically at the same time, it brought down a measure increasing the pay of all members of this house and of the other place, with tax exemptions for us in this chamber.
Without any hesitation, I affirm that every . married couple are entitled to at least $2,000 a year tax-free income, and every single person to at least $1,000 tax free. We have every reason, because of the pre-election promises, to expect jobs, housing and rehabilitation plans to a far greater extent than we have at present, and promised for the distant future, in this budget.
Mr. Speaker, because I have not had the opportunity or availed myself of the opportunity if I had it, I wish to say, in the light of this budget, a few words regarding the constituency I have the honour to represent. Prince Albert, a news commentator has said, and I quote:
... is the rightful electoral heir of the old federal district of Saskatchewan, Northwest Territories, and it was in the federal electoral district of Saskatchewan, Northwest Territories, in the year 1896. that a political leader by the name of Wilfrid Laurier was elected to parliament on a protest vote. The handful of Canadians in revolt against the double talk and double-dealing of the government that had been in office too long for its own honour or its country's good, did the job then by a majority of 44, and after forty-nine years Prince Albert has got back at last to pioneer form.
The territory of this constituency is as wide as from Ottawa to Montreal and stretches northward from the North and South Saskatchewan rivers to the Northwest Territories, a distance as far as. from here to Toronto. Within this vast territory are some of the finest agricultural lands to be found in Canada. In the northern parts are to be found hundreds of lakes and streams teeming with fish, and its forests are a hunter's paradise. Gateway to this vast area of unlimited, potential mineral, water and forest wealth, indeed to much more of the Saskatchewan great northland, is the city of Prince Albert, located on the banks of the North Saskatchewan river. All that has kept this enterprising little city and the surrounding territory which comprises the constituency from taking its rightful place as one of the leading industrial and recreational centres of western Canada is the fact that for
ninteen years it has been tied to the apron strings of the Prime Minister and a small group of Liberals, so-called. Lest it may be thought that I am alone in this opinion, and just to keep the record straight, I should like to quote from others who, both from a distance and closer up, have viewed the situation. First, may I read from Maclean's of July 15, 1945:
Prince Albert is a city of about 13,000, a bustling and ambitious little place with a Rotarian civic pride. But newcomers arriving by train would conclude, from looking at its railway station, that it was a none-too-enter-prising village. Prince Albertans are acutely conscious and ashamed of this eyesore.
Prince Albert is also on the North Saskatchewan river, a navigable stream which used to be the sole transport artery of the region. Bridges over such streams are a federal responsibility. Prince Albert has a bridge that looks like a museum specimen of the late Victorian era; it's ugly, grimy, rickety and inadequate to the traffic it bears.
Worst grievance, though, is the Prince Albert airport. Other western cities of comparable size and status have good, modern air fields with hard-surfaced runways. The Prince Albert airport looks like what it is, somebody's cow pasture. Two days' rain converts it into a swamp on which no plane can land or take off. But nobody ever persuaded Munitions and Supply to release the asphalt, or Transport to release the money, that would have made this piece of prairie farmland into a modern air station. Clamour on all these grievances met the reply, "now don't embarrass the Prime Minister."
This neglect has been rooted, of course, in Mr. King's honourable reluctance to give any favours or preference to his own riding. But resentful Prince Albertans, even Liberals, will tell you that he carried this policy much too far.
Next, I wish to quote from the Prince Albert Daily Herald of April 1 of this year. By the way, the Prince Albert Daily Herald editorially is Liberal, but in spite of that they publish a paper of which, for world, national and community news, any constituency might be proud. I quote:
For twelve days now Prince Albert has been cut off from the rest of the world by air mail. The Canadian Pacific Air Lines has been forced to by-pass the city because of the quagmire conditions at the landing field. Prince Albert is the only sizable place in the province in the unenviable position of not being able to provide a safe landing field for wheel-equipped planes at times of the year when water lies on the field.
Throughout the war the field was used under the commonwealth air training plan for the training of pilots for the war. It so happened that the type of training given in Prince Albert did not require hard-surfaced landing facilities. It was only because of this that the facilities which are essential if a city is to be of any importance on the air map of the country are lacking in Prince Albert.
During the election campaign, when Minister of Reconstruction Howe visited Prince Albert, he declared that if Prince Albert wanted hardsurfaced runways at the airfield, these facilities would be provided. The election did not go the
[Mr. Bowerman.1

The Budget-Mr. Bowerman
wav that Mr. Howe no doubt hoped it would when he made this promise, but a promise is a promise and now seems the opportune time to remind Mr. Howe of his pre-election commitment.	,
There are good arguments with which to support a request to the dominion government for the construction of hard-surfaced landing facilities here. One is that these facilities have been provided in Saskatoon, Regina, North Battle-ford and elsewhere out of dominion funds and it is not unreasonable to expect the dominion [DOT] to place Prince Albert on a footing of equality with these other centres.
Further, I wish to place on the record the fact that a delegation from Prince Albert did come to Ottawa, and briefs were presented to the Prime Minister and the ministers concerned regarding the airfield runway. In this brief they say:
The council of the city of Prince Albert and the board of trade respectfully request the immediate construction of hard-surfaced runways at the Prince Albert airport, and they further request that the Department of Transport take over the operation and maintenance of the airport.
The city of Prince Albert is located at the extreme north of the populated area of the province and is the starting off point for flying in the north.
During the war airports adjacent to small centres were hard-surfaced. We point particularly to fields at Davidson, North Battle-ford, Mossbank, and Dafoe, etc. In many instances we understand that these fields are not being and will not be used for civil aviation.
In view of the actual use of the field and its possibilities for future development it is felt by the city that a modern airport with hardsurfaced runways is indispensable.
The city accordingly urges that the matter be given immediate attention by the federal government.
I said that this delegation did come. They received the same promises, only extended, that were received prior to the election last year.
In regard to the traffic bridge, I only wish to remind the ministers concerned that this matter is urgent and that plans should be made for the starting of this project without delay.
There is another urgent matter confronting the citizens of Prince Albert as well as those of many other communities in Canada. I have received letters in regard to this matter, and, because I can get it before the Minister of Finance more quickly in this way, I shall again quote from an editorial appearing in the Prince Albert Herald of July 3, as follows:
The Prince Albert citizens' rehabilitation committee in resolutions passed at a recent meeting has drawn attention to the acute housing situation in Prince Albert which requires the immediate attention of government authorities.
About a year ago Wartime Housing Limited commenced the construction through a contractor, of fifty houses in the city. At that time it was said some of the houses might be
ready for occupancy by Christmas. Here it is six months from Christmas and not one family has been able to move in. Another fifty houses are to be built, but when? Wartime Housing Limited dwellings, in the meantime, have been completed in other cities. Some of them have been occupied for months.
The committee in its investigation found that there were approximately 275 veterans' families awaiting adequate living accommodation in the city. It is urgent that as many of these as possible be quartered as soon as possible in order to permit the occupants of the houses to obtain their winter's supply of fuel.
The situation will be made more acute this fall when additional vocational training courses are opened in the city.
The minimum demand should be that the fifty houses now being built and the additional fifty should be completed with the least possible delay. Wartime Housing Limited has priorities, but apparently these have been used for materials for houses in other cities.
I bring this to the attention of the minister, of the government and of those in charge of this particular project so that there may be some stepping-up of the completion of these houses for the benefit of the 275 families of returned men in Prince Albert. I also believe that the budget brings no peace or contentment to these 275 families. I have quoted and read at some length to place these matters before the house because, as I said in the beginning, Prince Albert feels that it has been neglected too long. I might add that now that the Prime Minister (Mr. Mackenzie King) has found safe retirement in the vales of Glengarry he need not have any scruples or reluctance in seeing that Prince Albert receives just and fair treatment from his government after these long years of hopeful waiting.
I should like to thank the Minister of Mines and Resources (Mr. Glen) and the Postmaster General (Mr. Bertrand) on behalf of my constituents for the intended improvements to the national park and postal facilities. These improvements are long overdue. Nevertheless they are gratefully appreciated.
In conclusion, may I say, as I said at the beginning, that I am supporting the amendment to the amendment because I am satisfied that by far the greater majority of my constituents of every political affiliation from the farms,, villages and cities find very little comfort or peace of mind in the budget now before the house, and that from their reaction I gather that the words of the amendment as proposed to be amended express their feelings when it says in particular:
That the budget does not provide for tax reductions in the calendar year 1946 by raising sufficiently the exemptions of those in the lower income brackets;
That the budget fails to provide for the investment of public funds to bridge the gap be-
The Budget-Mr. Dorion

tween anticipated private investment and the total national investment required to assm'e a high national income and full employment;
That the budget fails in the new offer to the provinces to provide for social security measures which will achieve a reasonable standard of economic security for all Canadians;
That the budget fails in its tax proposals to recognize the principle that cooperatives are non-profit-making organizations.
Mr. FREDERIC DORION (Charlevoix-
Saguenay): (Translation); Mr. Speaker, I shall confine the brief remarks I wish to make in connection with this debate to a few features of the speech delivered by the Right Hon, the Minister of Finance (Mr. Ilsley).
However, before dealing with the problems I intend to discuss, I wish to mention an event which, to my mind, deserves to be stressed, I mean the appointment of the Right Hon. the Minister of Justice (Mr. St. Laurent) as acting prime minister.
That choice made by .the Prime Minister (Mr. Mackenzie King) has been unanimously applauded by the house and I am sure of voicing the opinion of my Quebec fellow-citizens in tendering the Minister of Justice my heartiest congratulations.
I am convinced that his Quebec compatriots and especially his Quebec East electors have been pleased to note once again that he enjoys the esteem and the confidence of his colleagues. Even though one may not share his political views, one cannot but recognize his great dignity and his perfect integrity and it must be admitted that he is a credit to his French-Canadian fellow-citizens, in his public life as well as in his professional capacity; to a lawyer, this is always a prime consideration.
However, I wonder whether the pleasure felt by the people of Quebec at this announcement will suffice to erase the impression of pronounced uneasiness created by the speech delivered on June 18, by the Right Hon. the Minister of Justice in the debate on redistribution. I am sorry he is not present at this" time, but I hope he will hear from this and will have some remarks to make on the subject.
Referring to Hansard of June 18, I quote the following from the speech delivered by the Minister of Justice:
The hon. member for Calgary West asked, what about section 133, which provides:
Either the English or the French language may be used by any person in the debates of the, houses of parliament of Canada and of the

houses of the legislature of Quebec; and both those languages shall be used in the respective records and journals of those houses.


James Horace King: Order! I regret to interrupt the hon. member but he may not refer to a previous debate.


Mr. DORION:: I am not referring to the debate. If I am not allowed to read from the record the exact words of the Minister of Justice, I am at least entitled to say this: on June 18 last, the right hon. gentleman stated that parliament could forbid the use of the French language in the debates of this house and the Quebec legislature. This statement has dismayed and deeply disturbed our people.


James Horace King: Order! I called the hon. member to order a moment ago, not only because it is forbidden to read speeches made during a previous debate but also because it is not permitted to debate a motion which nas been carried or defeated in the same session. I must call his attention to standing order 41 and paragraph 293, sub-paragraph (a) of Beauchesne's Parliamentary Rules and Forms, second edition:
(Text):
(a) refer to any debate of the same session on any question not then under discussion . . .
(Translation):


Frédéric Dorion: Mr. Speaker. Are you
referring to standing order No. 41?


James Horace King: I have referred the hon. member to standing order No. 41, entitled "Decorum in Debate."
(Text):
In Beauchesne's Rules and Forms, second edition, citation 293 states:
Besides the prohibitions contained in this standing order, it has been sanctioned by usage both in England and in Canada, that a member,, while speaking, must not:
(a) refer to any debate of the same session on any question not then under discussion . . ,
(Translation):
The hon. member is referring to a previous debate, which is contrary to the standing orders of the house.
(Text):


Ian Alistair Mackenzie: Would my hon. friend permit me to intervene for a moment?


Frédéric Dorion: With pleasure.



INDUSTRIAL RELATIONS


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): I have a motion I should like to have passed, but it requires unanimous

The Budget-Mr. Dorion
consent; and if it is adopted the committee on industrial relations will meet at ten o'clock this evening. The motion is:
That the committee on industrial relations be directed and empowered to investigate immediately all issues connected with and appertaining to' the present industrial unrest in Canada, with power to call for and examine witnesses under oath, and with power to send for persons, papers and records, and to take all essential evidence, and to report their findings and conclusions to the house. And that the committee be empowered to sit while the house is sitting, and that the committee be further empowered to employ counsel to assist them in their deliberations.
Motion agreed to.
Ian Alistair Mackenzie: Thank you very much indeed. The committee will meet at ten o'clock this evening. I want to thank my hon. friend for his kindness in allowing me to intervene.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Right Hon. J. L. Usley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Maclnnis.
(Translation):
Frédéric Dorion: Of course, Mr. Speaker, I accept your ruling. With no thought of referring to any previous debate of this session, I merely wished to comment briefly on a section of the British North America Act. It is section 133, which reads as follows:
Either the English or the French language may be used by any person in the debates of the houses of parliament of Canada and of the houses of the legislature of Quebec; and both those languages shall be used in the respective records and journals of those houses; and either of those languages may be used by any person or in any pleading or process in or issuing from any court of Canada established under this Act. and in or from all or any of the courts of Quebec.
The Acts of the parliament of Canada and of the legislature of Quebec shall be printed and published in both those languages.
I maintain, Mr. Speaker, that even those who hold the view that the constitution may be amended without consulting the provinces must admit-and I except no one-that there are sections of the British North America Act which cannot be modified without the previous consent of one or several of the provinces whenever such province or provinces are directly concerned by the provision whose modification is contemplated. Now section 133 specially and directly concerns the province of Quebec. It deals with the debates in the legislature of Quebec and with proceedings in the courts of that province. The claim that this house could amend this section would mean that the dominion parliament could compel members of the Quebec legislature to carry on their debates in the English language. The mere thought of it is so extraordinary that it verges on the absurd. Now, I have never seen any absurdity sanctioned by law and this argument is very often set forth in all courts of justice.
Mr. Speaker, there have been occasions, since 1760, where the French Canadian have had to complain of the treatment meted out to them in this country. In references to the settlement of past problems, the impression is often conveyed that all difficulties were adjusted through the magnanimity of the masters of the time.
If controversies arising out of the language and the rights of French Canadians were solved in former days it is mostly because French-Canadian representatives, either in the Union Parliament which lasted from 1840 to 1867 or afterwards insisted upon and demanded the recognition of our rights. I recall no chapter in history more inspiring than that which relates the 1842 session of the Union Parliament, when Louis Hippolyte Lafontaine took his seat as a member. The events to which I have just referred are narrated in page 36 of Hon. L. 0. David's book "LTJnion des deux Canadas." As I said a moment ago, these happenings occurred in 1842, and the excerpt reads as follows:
When the Hon. Denis Benjamin Viger had concluded his eloquent speech, Mr. Lafontaine took the floor.
A tremor of curiosity passed through the house and galleries as Mr. Lafontaine rose; people wished to see and hear the man whose name, for some time past, carried so much weight. For many, however, curiosity gave way to surprise and disappointment when" he addressed himself to the chairman of the house in French. Mr. Dunn having asked him to speak in English, he answered:
"Has the hon. member forgotten that I belong to the nationality which was the object of such unfair discrimination by the Act of Union? He asks me to use for my maiden speech in this house a language other than my mother tongue. I am diffident about my ability to express myself in the English language, but even if I spoke it as fluently as an Englishman. I would nonetheless make my first speech in the tongue of my French-Canadian fellow-countrymen, were it only to protest solemnly against the cruel injustice perpetuated in that part of the Act of Union which tends to outlaw the mother tongue of half of Canada's population. This much I owe to my fellow countrymen, this much I owe to myself."
The Budget-Mr. Dorion

As a result of this just, bold and courageous demand of Louis Hippolyte Lafontaine, in 1842, two years later, that is in 1844, the Canadian government requested an amendment to the Union Act to allow its citizens to express themselves in the French language in this parliament.
For this reason, I claim that it is absolutely true, in this circumstance as in all others, that the language and privileges of French Canadians have been recognized, mostly, if not entirely as a result of the efforts of our forefathers.
Reverting now to the matter under discussion, the budget, I consider it to be neither a literary work nor a problem in higher mathematics to be discussed by scientists or financial experts. It must be remembered that it is submitted to the people of the country. This is why I shall endeavour to express the views of the average taxpayer whose yearly income does not exceed a few thousand dollars and who belongs to the group making up at least 90 per cent of the total population of Canada. He, and he alone, the average taxpayer, should be the object of our thoughts, for what good are a few score millionaires when 90 per cent of our people are destitute?
For an appraisal of the policy we mean to adopt, we must therefore turn to the average taxpayer who cannot count on accumulating wealth, even if he wanted to, for it is known that a fervent aspiration of mankind is to set aside a certain amount of savings for the peace and comfort of old age. But no one will deny that, because he is burdened with the evergrowing responsibilities brought on by the high cost of living, the average taxpayer is now denied this legitimate ambition.
All the average taxpayer can now hope for, all he can demand, is to live comfortably, to marry and be in a position to allow his wife and children to have a comfortable life, free them from hardship and too much denial. He is the one therefore, who has first claim on the assistance of the government.
I have no fear for the rich and the mighty for experience has shown that, even in the worst depressions, they manage to get by and have the means to do so. See what is happening in the war-torn countries of Europe, in the grip of famine and of the black market. We all realize that the poor are still those who suffer and die. The moneyed classes manage very well.
I admit that low wage earners are somewhat relieved of income tax by the budget proposals, but these reductions are insufficient anil do not live up to the average taxpayers' expectations. Exemptions should have been fixed at $1,000 for single persons and $2,500 for

married persons. Other considerations than income tax must be taken into account. No one can deny that practically all taxes eventually press upon the consumers and the mass of the people.
In order to provide his family with food, clothing and living quarters, the ordinary tax-pare pays so much more for these necessities of life as the higher taxes levied on the merchant, the manufacturer or the landlord raise the price of goods and the rent of buildings.
That is why the average taxpayer is directly concerned not only with the part of his revenue collected by the government but with the total taxes making up the national revenue. What stands out in the budget is the enormous debt of the country, a debt which is constantly increasing and may never stop increasing, to a point that we must pay nearly $500 millions in interest, a burden which will fall upon the taxpayer. Our enormous debt has resulted from the extravagant expenditures of the last few years when the government led us to think that our war effort was to be reflected by the amount of our expenditures, whether they be justified or not.
It is not my intention to discuss again the question of our participation in the war; this is neither the right moment nor the right occasion. However, now that the war is over, we have the right to ask ourselves what have been the results of the sacrifices that we imposed upon ourselves during the past six years, and we also have the right to examine the consequences of the policy followed by this government throughout those years. We were told that we were fighting to save civilization. Will anyone contend that civilization, which we sought to defend, is not at the present time in as great, if not greater, danger than in 1939? Will anyone contend that the sacrifices and hardships which we have endured in the last few years have brought us that peace and tranquility which we were looking forward to? Is it not true that the world situation is to-day just as insecure as it was prior to the war? This is the thought which is in the mind of the taxpayer when he is required to pay heavy taxes in order to meet the enormous war debt. If at least he could think that the sacrifices which he has made and which he is still being asked to make were of some use. On the contrary, he is being made the target for an ever increasing amount of pernicious propaganda. He feels surrounded, almost smothered, by communistic propaganda whose object is to provoke here as elsewhere internal difficulties which will weaken nations and make them an easy prey for the monster which threatens the world at present.

The Budget-Mr. Dorion
May I recall an incident which took place in Quebec about three weeks ago. We were having the visit of a Belgian officer who had been a prisoner in the notorious and hellish Dachau concentration camp, from which only about ten per cent of the inmates came out alive. That Belgian officer came to this country to raise funds on behalf of the Belgian war orphans. After relating the hardships which he had to endure in the Dachau camp, he spoke of the communistic propaganda being carried out at the present time in his own country as well as in France, and of the means used to spread this subversive doctrine in those two countries. In conclusion he could not help exclaiming: "As you know, there were two monsters in Europe. We have destroyed one and we are now wondering if we have destroyed the worse one."
We have abundant evidence of this pernicious propaganda here in Canada. I only have to refer to the report of the Kellock-Taschereau investigation which was tabled yesterday in this house. May I refer to an item which appeared in Le Droit of Ottawa, on the Uth instant.
It is a dispatch from Regina, Saskatchewan, which reads as follows:
His Excellency Archbishop P. J. Monahan, ol Regina, has urged the delegates to the convention of the Saskatchewan French-Canadian Association, as well .as the delegates of the French Canadian School Trustees Association and those of the Catholic School Trustees Association, meeting jointly, in the basement of Holy Rosary cathedral, at Regina, ito oppose with the utmost energy the Cooperative Commonwealth Federation government's policy, which consists in appointing men who are publicly recognized as communists to high positions in the field of teaching and education in Saskatchewan.
"One of the greatest dangers which threaten democracy and all minorities, said His Excellency, is communism. To-day the greatest enemy of society, of religion and of Canada, he added, is communism. It is my duty, the archbishop continued, and it is your duty, as school trustees, to direct open protests to the prime minister and the other ministers of the Saskatchewan government, against the appointment of men -who are not acceptable to us and whose philosophy is a danger to adult education in this province.
Now, at this time when we feel much concern, as we might as well admit, we must nevertheless note that during the war, notwithstanding the sufferings, and the hardships that necessarily accompany this scourge of mankind, some people have succeeded, in this country, in accumulating wealth for more than $12,000,000,000, and we must now pay them a tribute of many millions a year in the form of interests, in recognition of the ability they showed, when, at a time when our soldiers were being killed, those people were 63260-222
accumulating dominion bonds. Mr. Speaker, no one had the right to make money out of the war.
To-day, in order to give some relief to the taxpayers, to do them the most elementary justice, the government should have the courage to restore the balance in demanding the return to the common fund, that is to the state, of at least part of the wealth that was accumulated during the war. Instead of that, new sources of income are sought and, as the taxation field is almost totally covered already, organizations such as cooperative associations, which should always have remained exempted, are brought under the fiscal measures.
I do not intend to delve deeply into the matter of taxation of cooperatives as proposed, for we shall have another opportunity of dealing with this question when the budget resolutions are submitted to us.
I shall be content to state that, to my mind, the principle of taxing these associations is opposed to the proper management of public affairs.
Indeed, it is generally admitted, to-day more than ever, that one of the foremost duties of any government, is to prevent, by all means at their disposal, that our people be led into reactionary movements.
I submit that the best way to ensure our population against the dangers of supporting subversive doctrines, is to give them the means and opportunity of acquiring a measure of wealth and becoming landowners.
Since it is difficult if not entirely impossible to conceive of all citizens individually acquiring property, we may, as an alternative, encourage them to joint ownership; such is the function of cooperative societies.
To my mind, therefore, the fact that cooperatives are organized and carry on remains one of the strongest ramparts for society in general against the increasingly dangerous tide of communistic ideologies.
The budget, however, ignores this principle; that is why, among several other reasons, I cannot approve the financial scheme as it was brought before us.
In support of this contention, I take the liberty of setting forth a piece of evidence which I consider noteworthy. About two weeks ago, while listening to a newscast, I heard that the new French minister of food, passing through Washington, was on his way back home. Asked how he intended to deal with the crisis which is rife in France, as it is all over Europe, the French minister of food, Mr. Yves Farge, stated that he had definitely resolved to fight the black market relentlessly

The Budget-Mr. Dorion

and that the expansion of cooperative societies in his country would provide the best means of putting teeth into his campaign.
It may be claimed that some cooperatives have, to a greater or lesser degree, become joint stock companies; that may be so, in certain cases, but we should have differentiated among the various types of cooperatives. I know, for instance, that in my riding, only two varieties are represented; they are the farmers' and fishermen's co-operatives. I am also convinced that these have never pocketed any real profits;, if they set aside reserve funds, their savings will be applied to the purchase of required farm machinery or fishing tackle which they lack and will use on a joint basis. This is also true of fishermen's co-operatives which also happen to put aside small savings, but no one could call it a reserve fund since the few hundred dollars which they save and which will be used to buy the necessary fishing gear. That is why I say that in taxing those reserves we are not taxing capital but the savings of the co-operator. That is how I happen to know that this plan is causing justified resentment in the province of Quebec, and besides it is not the sole cause of discontent.
When for instance we realize how federal affairs are being managed and consider the status of French Canadians in the civil service, we can easily see that our people very often have good cause to complain of the way they are treated. Thus statistics will show that in 1918, before the creation of the Civil Service Commission under the federal administration, the proportion of French Canadian civil servants amounted to 21-58 per cent while in 1946 the proportion was down to 12-25 per cent. What is worse, with respect to salaries of $6,000 or more a year ,the proportion of French Canadians fell from 25 per cent in 1918 to 9-52 per cent in 1946. According to a return which was tabled in the house at my request, out of 37 employees holding a rank comparable to that of deputy minister-indeed there is not a single full-fledged French Canadian deputy minister-5 only are French-Canadians.
Among the deputy ministers and those holding a rank comparable to that of deputy minister, one gets $15,000, four $12,000, fourteen $10,000, seven $9,000 and eleven $8,000 or less. Of course the five French Canadians who appear on that list fall in the last class, those receiving $8,000 or less.
The Prime Minister has tabled to-day the report of the royal commission investigating civil service conditions. Although I did not

have time to read the whole report, I glanced through- the summary of the recommendations appearing in the first part of the report. I have failed to find any remedy to this situation which was forcefully outlined to that commission by the chamber of commerce of the district of Montreal. In this connection I wish to endorse the conclusions reached in a splendid report prepared by the latter, which was submitted to the commission in April, 1946.
It is not only the civil service, Mr. Speaker, that French Canadians are complaining about. For instance, in Quebec, in the district and city of Quebec, there are many unemployed for whom jobs will have to be found shortly. At Quebec there are thousands of unemployed who, at the present time are drawing unemployment benefits, but before long they will be without means of providing a living for their family. On the other hand, in Quebec, there are large plants, namely that of St. Malo, for instance, for which the country spent millions of dollars, that are now absolutely idle; at the same time we are receiving letters from farmers in our constituencies requesting our help in securing farm implements which they badly need, and contractors complain that they are unable to obtain building materials.
What is lacking then? The plants are owned by the dominion government and it would be easy for them to take the necessary steps in order to put them into operation and manufacture farm implements or building materials which are so urgently needed, and at the same time provide work for the unemployed.
I am no socialist, far from it. I have said before and I repeat that I am in favour of private enterprise, but when it has failed, it seems to me that it is up to government authorities to organize an industry, the need of which is admitted by everyone.
Another complaint against the federal government concerns the inactivity of Quebec harbour. It is generally recognized that since the control of national harbours has been centralized, the Quebec harbour is noted for its idleness by river travellers. In days gone by, as everyone knows, the harbour at Quebec was always doing big business and I well remember the time when the Quebec harbour commission employed many Quebec workers. If the Quebec harbour were to regain its former animation, I am convinced that the labour problem could be very easily solved in the city itself as well as in the whole district.

The Budget-Mr. LaCroix
At present, the Quebec harbour is altogether idle. I am quoting statistics for the year 1943, published in the 1945 Canada Year Book which are, I believe, the latest available. On page 696, I find that in that year, 177 ships entered the Quebec harbour while 720 docked at Halifax, 593 at St. John's, 123 at Trois-Rivieres, that is, almost as many as at Quebec, and so on. This is conclusive evidence that as long as the harbour administration is controlled by this central commission in Ottawa, the Quebec harbour will remain idle and Quebec workers unemployed.
The government might undertake quite a few work programmes in my riding, for the constituency of Charlevoix-Saguenay is known as the largest in the dominion. It extends on the north shore of the St. Lawrence river for 900 miles, from Quebec city to Blanc-Sablon in the strait of Belle-Isle. Of all necessity, means of communication should be provided to allow people in that vast district to get in touch with the outside. What we need most there is wharves and protective- works, and it is obvious that we would have to do twenty times more than is being done at present. [DOT] When our people consider the gifts of millions of dollars made to foreign countries-indeed I have always considered the loan which was made as a gift-while at home our people, our fishermen and our farmers, are awaiting various projects and the building of means of communication which would enable them to sell their products, I say that those people have reason to be dissatisfied and to protest against this state of affairs.
I trust therefore that the situation will be remedied so that these people may get the means of communication which are so urgently required.
There is another point to which I would only refer in passing, the offer to the various provinces contained in the budget speech. Obviously everyone regrets the failure of the dominion-provincial conference; everyone hopes that it will be resumed and that a fair agreement will be reached in the best interests of the country and of the provinces. But in this connection it must be remembered that if we may hold views on the position taken by the dominion government and that taken by the provinces, the people of Canada are entitled to their own opinions regarding dominion-provincial relations. I wish to recall to the government that a by-election was held recently in the constituency of Compton and that the people there were called upon to approve the position taken by the dominion government and that taken by the Prime Minister of Quebec. We all know the result.
63260-222J
The voters of that constituency, which includes both French and English speaking citizens, endorsed by an overwhelming majority the attitude of the Prime Minister of Quebec.


James Horace King: The hon. member has already spoken for forty minutes.
Mr. WILFRID LaCROIX (Quebec-Mont-morency): Mr. Speaker, I do not intend to speak at any great length, but I deem it my duty to rise in this house in order to submit to the Right Hon. the Minister of Finance (Mr. Ilsley) a resolution that was passed at a meeting which I attended. It reads as follows:
Resolution passed at a meeting held in the parish hall of St. Gregoire de Montmorency, on June 10, 1946, which was attended by the federal member of the constituency, Mr. Wilfrid LaCroix, and more than 200 directors of cooperatives and credit unions of the district.


James Horace King: Could the hon. member speak louder?


Pierre Gauthier: Louder.
Mr. LaCROIX: The authorities of the House of Commons should rather improve the acoustics. I intend to speak in the same tone.
Whereas cooperatives are not profit-seeking undertakings but rather service organizations;
Whereas cooperatives are now a powerful factor of economic stability and social peace;
It is moved by Mr. Leo Lessard, president of the Loretteville cooperative, and seconded by Mr. Ernest Fiset, president of the Ancienne Lorette cooperative, and unanimously resolved;
1.	That the federal member for Quebec-Mont-morency constituency, Mr. Wilfrid LaCroix, be urged vigorously to oppose any new legislation which would bring the cooperative associations under the income tax and especially to oppose taxation of:
(a)	patronage dividends either actually paid or credited -to members;
(b)	reserves of cooperative associations which are absolutely necessary to them for the maintenance of the value of their equipment as recommended by commissioners Arnason and Nadeau;
2.	That copies of this resolution be sent to the Right Hon. J. L. Ilsley, Minister of Finance and Right Hon. Louis S. St. Laurent, Minister of Justice.
Passed at Quebec, June 21, 1946,
30 Hebert street,
Quebec, P.Q.
Fransois Jobin, Secretary of the meeting,
I understand that pressure is being brought to bear on the Right Hon. Minister of Finance,, by a large number of hon. members to urge him to accept certain amendments before the. resolutions are submitted to the committee..
I gathered from a statement by the Right Hon. Minister of Finance, that patronage divi-
The Budget-Mr. LaCroix

dends will not be subjected to income tax. If I am wrong, I ask him to correct me when he makes his speech to close the debate. I also believe that reserves of cooperative associations will not be subject to taxation provided they are distributed to the membership. I would be delighted to know the views of the right hon. minister on this matter.
Allow me to point out to you, Mr. Speaker, that our co-operative associations are very important, since they are such that they do away with the middleman and establish direct relations between the farmer and the consumer.
The cooperative associations are non-profit organizations, making it possible for the farmers to buy collectively what they need. At home, in the old province of Quebec, they are the only means of fighting trusts, chain stores and large business enterprises.
I believe that the farmer cooperative associations now existing constitute the surest way of ensuring economic independence to our population. I wish to protest strongly against taxation of reserves which are so essential to the maintenance of the value of the equipment of our cooperative associations and also against taxation of patronage dividends either actually paid out or credited to the membership.
We have already met the Right Hon.. Minister of Finance on several occasions in this connection and I dare hope he will take into consideration the views of hon. members of both sides of the House who seem unanimous on this matter. Any other course of action would constitute an encouragement to the trusts and would lead our people into the most thorough socialism, so earnestly desired by the C.C.F. party.
Mr. Speaker, may I therefore make a final appeal in this connection to the Right Hon. Minister of Finance? I must also register a strong protest against the fact that the small taxpayer was not granted relief by increased exemptions on small incomes.
May I ask the Right Hon. Minister of Finance that, when those resolutions are submitted to us, he consider granting full tax exemption to all who earn less than S3,000 a year.
I appreciate what difficulties may stand in the way of tax exemptions in view of the many billion-dollar gifts to Great Britain and of certain interest-free loans of other billions. I hope that common sense will finally come into its own and that due regard will be had for the fact that we should first look after our own welfare.
It seems ridiculous to me how Conservative, C.C.F. and Social Credit members, having endorsed billion-dollar gifts to Great Britain and interest-free loans of other billions, should now

complain in this house that taxes are too high. They are the ones who, in constantly outbidding the financial policy of the government, drove us into the present chaos.
If the government is to blame, all parties must share equal responsibility for our present plight.
(Text)


Mr. G. H. CASTLEDEN (Yorkton):: It had been my intention to devote the forty minutes of my talk on the budget to War Assets Corporation and its workings throughout the past two or three years because, in my opinion, the Minister of Finance (Mr. Ilsley) has missed a great bet. I believe we could wipe out the entire estimated deficit of this year's budget by a proper distribution and proper use of the assets held by Canada at the close of the war and as a result of the sudden cessation of hostilities.
The story has been pretty well told in one of Canada's magazines. There is, for example, the story of an employee of Research Enterprises who tried to buy some of this material after it had been reduced to junk and was told that he could not do so because he was an employee of the concern. A couple of years later he went back to the same man in the same position and asked whether he could buy the same material at a price twice as much as was charged for junk, and he was informed that he could not do so because he was not an employee. There is the story of a typical case of a war veteran and his efforts to obtain machine tools to reestablish himself in his industry. We have the story of War Assets and their 15,000 cars and trucks resold to dealers and manufacturers. There is the example of 48 four-wheel drive trucks which cost the government 811,350, which were sold back to the assemblers or the manufacturers at about 84,801 each and were resold to priority claimers at from $6,800 to $7,200 each. There is the story of an enterprising aeroplane dealer from New York, Charles Babb and Company, who bought 185 Finch aircraft from the Canadian government at a price of $302 each when a private individual had a hard job getting anything. There is a report on how not to buy an aeroplane. I believe another article is going to appear, but at this time I would congratulate the Maclean Publishing Company on the work they are doing in exposing what, in my opinion, is one of the black pages of Canada's war record, and that is War Assets Corporation. I know my own efforts over a couple of years are a story of complete frustration; for I have tried in vain to get questions answered, even on the order paper, and in the committee I have tried to get information, but one is

The Budget-Mr. Castleden
smothered under an avalanche of words. Big business and the junk dealers are in the saddle, while soldiers, farmers and poor people in need of clothing cannot get hold of any material.
This is part of the price we pay for war. These goods were bought from the manufacturers at high prices, under cost-plus contracts, and another price is being paid to-day, when these goods are denied the Canadian people and, instead, are passing out in the form of junk, leaving the hands of the ordinary trade and getting into the hands of the junk dealers. The price we are paying is tremendous-


The ACTING SPEAKER (Mr. Golding):: Order. I would remind the hon. member that that is a matter which is before a committee of the house, and it is not in order to discuss that question now.


Mr. FRASER:: Oh, go on.


William Henry Golding: There is no "go on" about it.


Gordon Knapman Fraser: I think it is absolutely in order.


William Henry Golding: No; it is not.


George Hugh Castleden: This is a speech on the budget.


William Henry Golding: It is not in order to discuss any matter that is before a special committee of the house. That is a well established rule.


Gordon Knapman Fraser: Parliament might as well go home.


William Henry Golding: I would ask the hon. member to withdraw that remark. The rules of the house are clear. If hon. members wish to have the rules changed, that can be done, but we must abide by those rules. I hope the hon. member will withdraw that remark.


Gordon Knapman Fraser: I will withdraw it, Mr. Speaker, but I certainly still feel it.


Mr. HANSELL:: I am aware, Mr. Speaker, that there is some element of truth in your ruling, but I maintain that if we were to follow that out completely in the budget debate there would be very little that we could speak on, because all committees on all subjects are meeting at the present time. I believe that in a budget debate certain liberties are taken in this respect.


Mr. GRAYDON:: May I rise to a point of order? I ask the right to be heard on a point of order, if I may. Do I understand the
Speaker's ruling to be that in the budget debate, because a special committee of the house is dealing with war assets corporation, no reference can be made to that subject?


William Henry Golding: That is not a point of order. I am quite sure that every hon. member knows very well the rule which prevents a discussion of any matter that is currently before any special committee. It is a well established rule and I hope the hon. gentleman will abide by it.


Gordon Graydon: If that is the case, this is simply a parliamentary blockade-


Gordon Knapman Fraser: Absolutely.


Gordon Graydon: -so far as the budget is concerned. I am quite sure that no rules of the house were ever intended to be interpreted in the way in which they are now being interpreted by Your Honour, because as the hon. member for Macleod (Mr. Hansell) has so well said, we shall not be able to discuss anything on the budget if a special committee is dealing with any phase of the subject which is under discussion by an hon. member. That applies also to questions on the order paper. One of these days the House of Commons will have to have a showdown with the government with respect to the matters which are referred to special committees. In my opinion there is no justification for such an interpretation. I believe that His Honour himself would be the first one to agree in all fairness, as he has through the years, that it is not fair to the House of Commons to throw the tarpaulin of parliamentary rules over free house discussion in respect of matters which may be for the time being before a committee, and which may not have even been discussed in the committee. At some time we must either alter our rules or adopt a more reasonable interpretation of them.


William Henry Golding: I would say to the hon. member that if hon. members do not wish particular items, such as the war expenditures committee is now dealing with^referred to special committees they can at R1 times have an opportunity to discuss the matter in the house; but, once the matter has been referred to a special committee, it is not in order to discuss it until the committee has made its report.


George Hugh Castleden: Mr. Speaker, on a point of order, if that rule were carried out in a general discussion of ordinary business in debate it might be all right; but with regard to a budget debate in which opportunity is given to members to discuss any matter before granting money to His Majesty
The Budget-Mr. Castleden

to carry on government, which is a right that has rested1 with members of parliament for generations, it should not apply. If Your Honour rules that I cannot speak on war assets, then the same rule would apply to other matters and I would not be permitted to speak on labour, veterans affairs, defence or any other subject. What am I to speak on? If it is Your Honour's ruling that I am not allowed to speak-


Douglas Charles Abbott: Why cannot the hon. member speak on defence?


George Hugh Castleden: on these matters, then I must challenge the ruling.


Ernest George Hansell: The hon. member cannot speak on the budget because the banking and commerce committee is meeting.


Gordon Knapman Fraser: We are just gagged and hog-tied.


George Hugh Castleden: I should like your ruling, Mr. Speaker.


William Henry Golding: I should like to call hon. members' attention to citation 303 at page 100 of Beauchesne's Parliamentaiy Rules and Form, second edition, which reads as follows:
Until the committee reports, it is irregular to refer to its proceedings in debate in the house. For instance, in the session of 1873, Mr. Huntingdon was proceeding to refer to certain papers and letters relative to an important matter under the consideration of a select committee, but the Speaker decided in accordance with English precedents that they could not be read in the house.


George Hugh Castleden: I was not referring to anything being brought up in the committee.


William Henry Golding: I should like to say to the hon. member that that is my ruling. If the house wishes to permit the hon. member to discuss the matter I am agreeable.


George Hugh Castleden: With unanimous
consent.


Gordon Graydon: I do not think unanimous consent is needed.	%


George Hugh Castleden: I had just about finished anyway. I did not think the rule preventing the member from saying anything was to be extended to the budget. I have been trying to get information about War Assets, but I did not think the rule was going to be applied to this extent. I could have spent forty minutes on that particular story which would have brought us up to date on where the present government stands. It would have added to their record of 1944 when the Liberal

administration, by order in council, handed over to the Imperial Oil, a subsidiary of the Standard Oil Company, the tremendous oil resources of the Yukon and the Northwest Territories. I could have spent forty minutes of my time on the budget in discussing the matter of farmers' income tax, if it is not before a committee. I could have discussed with the Minister of National Revenue (Mr. McCann) the fact that, although the budget allows a farmer to average his income over a three-year period, it has not yet tackled the problem of the farm income tax, because basically it differs in many ways from the ordinary business proposition. The ordinary business man carries on his work in his little business. He leaves his home and goes to his business place. He hires people to do his work and he is permitted, as deductible from his profits, the income that is paid as wages to those who assist him in earning that income. In the case of the farmer, his wife and children work on the farm, but there is n<j allowance for wages that might be paid because no wages are paid. The largest army of unpaid workers in Canada are the workers on the farms. To face up to this problem in all fairness, the minister should. grant exemption of at least $3,000 for the woman and the family who work on the farm. That would permit the farmer to bring the earnings of the family into equity and make it possible for him to carry on. Something has to be done in that regard to bring back into the minds of the Canadian people the proper place that agriculture has in our economy, to encourage the people to come back into production, to entice the young people particularly to go and work on farms. To-day they do not want to come back to the farms, and something is needed to rectify that situation.
But when the minister completed the reading of that part of his budget dealing with the taxation of cooperatives I recognized at once an attack on the cooperative way of life. After reading the budget through a couple of times,
I came to the conclusion that this resolution is designed to go deeper at the roots of the cooperative way of life than would possibly be imagined on first reading. I should like to warn the government that when it sets out to cripple the cooperative movement in Canada and destroy the very basis of the principles of cooperation it is aligning itself against the masses of the people, and putting itself by the side of those who stand in special privileged positions, monopolistic industry, the grain exchange, and so on. Apparently the campaign of the taxpayers' association which must have cost hundreds of thousands of dollars has worked so far as the government is concerned. The minister has started out on a road which

The Budget-Mr. Castleden
will be filled with thorns. He is on a road which will be filled with opposition. This group to which I belong, the Cooperative Commonwealth Federation, which believes basically in the cooperative way of life, are going to fight with everything they have.
When the budget speech informed us that section 4 (p) of the Income War Tax Act would be repealed we knew that the lid was off. Here is the government, returned by the people in 1945, cutting at the very roots of the cooperative movement, which plays a valuable part in the economic life of all countries. Big business is showing its hand to-day. It is a mailed fist, and it is out to render the cooperative movement in Canada useless as a weapon by which the small man, the person in the lower income group, can protect himself against those who would establish a complete monopoly, either in services or in commodities, and compel the rank and file of the people to pay their price because they can maintain it in scarcity. I charge this government with aiding and abetting that movement. I should like to refer to pages 29 and 30 of the report of the royal commission on cooperatives, where they outline the public interest of cooperatives in the life of any country. The report says:
The representatives of cooperative associations advanced two main grounds upon which they sought to be freed from tax. They urged, in the first place, that their associations performed certain public services for people in receipt of low incomes which ordinary companies did not attempt, or at least not to the same extent . . . Secondly, it was alleged that they were not profit-making institutions by intention or practice; that their object was to perform services for their members at cost, giving rise to the argument that, in fact, they did not derive profits from their members.
The social and economic advantages to the people of Canada are not small. Again on page 30 they say:
The commission is in no doubt that the cooperative associations can and do perform services which are valuable not only to their members but redound to the advantage of the community in general. . . In particular, the cooperative form of organization, especially in rural areas, affords an opportunity to individual members of outstanding capacity to obtain an experience in management, administration and leadership which, in the ordinary course of events, they could not obtain in any other way.
Further they say:
Some representatives of the cooperative associations argued, and it was repeated on many occasions, that the methods of cooperation resting. as they say, upon the self help motif, appealed to and developed a higher set of principles than the individual and purely selfish pursuit of gain.
Cooperation is an essential part of democracy. In Scotland and England, allied with the labour movement the great Scottish and British cooperatives ha've fought a battle for a hundred years to maintain their existence. Apparently the battle is to be joined here too. In Sweden, in the United States, in Canada, in China, in Denmark and for a while in Germany, progress in almost every country has been in direct proportion to the extent the people have the ability to democratically organize and completely work their cooperative organizations. Is it not a significant fact that when fascism comes in, the ultimate of monopoly enterprise, the first things that have to go in any country are the cooperative movement and the labour movement. Hitler did it in Germany.


Mr. GARDINER:: The cooperative movement was operating in Saskatchewan before you ever heard of it.


George Hugh Castleden: We shall talk about that later on. I was there when it was bom. I was born there too.


James Garfield Gardiner: No new cooperatives have been established there since your day.


George Hugh Castleden: They will have to look out, or this administration will fix them.


James Garfield Gardiner: They were all put in by the Liberal party.


George Hugh Castleden: You can go on with your little speech when I am through with mine. I have had enough interruptions for to-night.


James Garfield Gardiner: I just wanted that in the middle of your speech, so that it will go out with it.


George Hugh Castleden: I am sure the people of Saskatchewan will appreciate that. The Minister of Finance has used the report of this royal commission as a screen from behind which he can attack the cooperatives. Yet he claims that in general he has followed their recommendations. Where the commission does not recommend that the government go farther, however, the minister goes the rest of the way himself. The hon. member for Swift Current (Mr. Bentley) and the hon. member for Selkirk (Mr. Bryce) have outlined the democratic basis of this great people's movement. They have told the story of the early fight of the grain growers in the west to organize their cooperative movement. Cooperatives are not profit-making organizations. Their purpose is to provide the people who
The Budget-Mr. Castleden

patronize them, whether producers or consumers, either with commodities at a proper cost, or with services, which services have not been available to them in the past unless they paid exorbitant prices for them. Cooperatives have grown up as the only means whereby the rank and file, the common people, can protect themselves against the vagaries and vicissitudes imposed upon them by those who get control by monopolies.
There are three points with which I want to deal briefly. The first is the legislation passed by the Liberal government in 1930, which this government claims was ambiguous and perhaps doubtful. I am going to point out that in the present legislation the government is striking at the very basis of cooperative principles, and that if this taxation goes through on the basis at present advocated it may not kill but certainly will cripple the cooperative movement and prevent it from growing. I claim further that this government has extremely weak grounds for going after the cooperatives and taxing them retroactively. Tor that purpose I will refer to the stand of the Liberal party as set out in Hansard for May 24, 1930, when the then Minister of Finance, Hon. C. A. Dunning, brought in the legislation. Here is his budget resolution as it appears at page 2505 of Hansard for 1930:
2. That the income of cooperative companies and associations be exempt from income tax.
Then at page 2507 I find this discussion:
...Mr.. Hanson; Does this arise out of the litigation in relation to the wheat pool?
Mr. Dunning: No.
Mr. Hanson: There was litigation, was there not, between the department and the wheat pool over the question of payment of income tax?
Mr. Dunning: Yes.
Mr. Hanson: What was the decision?
Mr. Dunning: It was decided against the department by the Supreme Court of Canada.
Mr. Hanson: That is exactly what I thought was the case. Is the litigation ended?
Mr. Dunning: The litigation is ended.
., Mr, Hanson: If that be so, and you have ihe decision of the highest court of appeal in this country, why the necessity of this legislation?
An hon. Member:	There are other cooperatives.
Mr. Hanson: I know, but the principle is there established.
Mr. Dunning: Oh, no; it was a question of contract, and the interpretation of a contract. It did not bear specific relationship to the nature of the organization.
And listen to this, by Mr. Dunning:
The intention here is to exempt bona fide cooperative associations and companies from income tax. I can better discuss the details when the bill is presented, and hon. members will have the proposed sections before them. It 
is difficult to make a statement when the bill is not before the house, but I may say that a bona fide cooperative organization shall be exempt entirely from the provisions of the Income War Tax Act. I may read what is contained in the bill, although hon. members will understand that the bill cannot be introduced until the resolution has been adopted by the house.
Then he proceeded to read section 4 of the act, which was tc be amended by adding thereto the following paragraph, and here is paragraph (p):
(p) The income of farmers', dairymen's, live-stockmen's, fruit growers', poultrymen's, fishermen's and other like cooperative companies and associations whether with or without share capita] organized and operated on a cooperative basis, which organizations-
(a)	market the products of the members or shareholders of such cooperative organizations under an obligation to pay to them the proceeds from the sales on the basis of quantity and quality less necessary expenses and reserves;
(b)	purchase supplies and equipment for the use of such members under an obligation to turn such supplies and equipment over to them at cost, plus necessary expenses and reserves.
Such companies and associations may market the produce of, or purchase supplies and equipment for non-members of the company or association provided the value thereof does not exceed 20 per centum of the value of produce, supplies or equipment marketed or purchased for the members or shareholders.
Then followed this statement by Mr. Dunning, and I should like to emphasize it:
That means that any cooperative organization falling within the groups there mentioned or other like groups may do business for its own shareholders provided that the arrangement of the business is to return all proceeds less the necessary reserves and expenses to those who contribute the commodities or, in the second place, in the case of the purchasing association, to those who purchase the goods.
I read this to show the house that what was intended by the legislation was clear beyond doubt. That was the Liberal party in 1930. What has been brought down to-day is a complete reversal of that. At the time the resolution was brought in, there was no question of doubt as to what it was for. There was no question in the house, and no question in the mind of the minister. Still we now have a doubt raised. The matter is not even brought to the courts.
The minister bases his argument upon some pretence that this is ambiguous, and that the intention was not clear. Then we have the commission being set up.


James Lorimer Ilsley: On a point of order, it is not in order for one member to say of another that he is basing his action upon pretence. My submission is that it is not in order for one hon. member to say that of another.

The Budget-Mr. Castleden


George Hugh Castleden: I accept that, and withdraw. The facts herein do not prove that there was any doubt in the mind of the government or the ministry when they put that legislation through.
I will take the report of the commission itself and deal, first, with what the minister says. The minister's statement to the government was carefully phrased in his budget speech, and he gave the impression that what the government was doing was accepting the commission's recommendations. I will point out that in that report and in the recommendations there were statements 'which are somewhat different from the interpretation one could make of the minister's remarks in the budget.
In effect what he is doing is this:	He says,
"The commission does not go far enough. We are accepting so much, and we are going the rest of the way ourselves." I think the minister would accept that, because he says in his speech:
I am now in a position to say that in general the government accepts the commission's report as the basis of its proposals with respect to the taxation of trading cooperatives, credit unions and mutual insurance organizations.
The first recommendation of the commission is that we should repeal section 4 (p) of the Income War Tax Act, the section which was inserted in the act in 1930 to authorize an exemption for specified classes of cooperatives under certain conditions.


James Lorimer Ilsley: Right.


George Hugh Castleden: I think they were practically all cooperatives with the exception of those which did more than twenty per cent of business with other organizations.


James Lorimer Ilsley: No.


George Hugh Castleden: With that exception-


James Lorimer Ilsley: I do not want to interrupt, but the hon. member is making a lot of statements with which I just do not agree.


George Hugh Castleden: I have taken the minister's words right out of Hansard, and I shall continue with the rest of it. The minister says further:
The government accepts this recommendation and, accordingly, proposes that section 4 (p) be repealed.


James Lorimer Ilsley: Yes.


George Hugh Castleden: And it continues:
Apparently the section has little or no value in any case, for whatever the original intention of parliament may have been, the methods of doing business followed by our ordinary types of cooperatives are not such, in the opinion of the law officers of the crown, as to enable them to secure exemption under this section.


James Lorimer Ilsley: Right.


George Hugh Castleden: I should like to take the minister back to page 40 of the commission's report. These are their words, in defence of what they said when they were advocating the repeal of section 4 (p). At page 40 we find this:
In suggesting the repeal of section 4 (p) of the Income War Tax Act, we do in the consciousness that enterprises which are truly cooperative in organization and operation have no need of the exceptive provisions thereof.


James Lorimer Ilsley: Right.


George Hugh Castleden: And it continues:
If they make no profit they are not taxable.


James Lorimer Ilsley: That is correct. Nor do we do anything to make them taxable by anything that we are doing here.


George Hugh Castleden: I beg to differ, because I think you do.


James Lorimer Ilsley: We certainly do not.


George Hugh Castleden: The commission advocated the repeal of section 4 (p) because they felt that cooperatives do not make a profit.


James Lorimer Ilsley: Certain cooperatives cfo not make a profit. If a cooperative does not make a profit, and if my hon. friend's contention is correct that they do not make a profit-an income within the meaning of the Income War Tax Act-that cooperative is not taxed by anything proposed here.


George Hugh Castleden: But you do not allow them to distribute tax-free dividends, beyond three per cent interest on their capital; is that correct?


James Lorimer Ilsley: That is not accurate, no. If a cooperative has no income to begin with, it bears no tax and the three per cent provision does not apply. It has not anything to apply to. It is only if it has an income within the definition of "income" that the three per cent provision has application-if it has profits.


George Hugh Castleden: Are those profits? We maintain they are not.


James Lorimer Ilsley: If they are not profits they are not taxable. Let my hon. friend get that through his head.


George Hugh Castleden: All right; in other words, if there is no return, it is not taxable?	[DOT]


James Lorimer Ilsley: No "profit".


George Hugh Castleden: I believe the commission could have defined what a cooperative is, and put it on the record. That is one of the difficulties, that there is no accurate definition of a true cooperative.

The Budget-Mr. Castleden

Mr. ILS'LEY: Would you like to have one?


George Hugh Castleden: It requires an act respecting cooperatives on the statute books, so that there would be no dispute about it. If the commission had said that a cooperative is an organization which is operating on the basis of one man, one vote; that it would' allocate all its surplus to members in proportion to the business they are doing; that all surpluses must be reported to the government as part of income, and that they do not do more than one-third of their business with non-members, I think we could get a basis upon which to define a true cooperative.
I will say this, that any time a cooperative does business with non-members, and shows a profit, such cooperative-and all cooperatives across Canada-would be quite willing to pay an income tax and a profits tax on such moneys made out of doing business with non-members.
The next step the minister took was one where he went a little farther, because at page 2921 of Hansard he says:
Affer careful consideration, the government has therefore come to the conclusion that it should accept the commission's recommendation that patronage dividends and similar payments be treated as a deduction from income subject to one relatively minor limitation designed to avoid at least some of the discriminatory effects I have mentioned. The limitation is this:	that no company or association
shall be able to go so far in its distribution of tax-free patronage dividends as to reduce its taxable income below a reasonable return on capital employed in business.


James Lorimer Ilsley: Right,


George Hugh Castleden: You are going to compel them to declare returns on capital. Many cooperatives do not do that.


James Lorimer Ilsley: Only if they have income.


George Hugh Castleden: Many of them, although they have income, do not declare any jiterest on capital.


James Lorimer Ilsley: Why?


George Hugh Castleden: Because they do not believe in a return on capital; they do not believe in interest on capital.


James Lorimer Ilsley: It would not be to avoid taxation, would it?


George Hugh Castleden: It is not profit. They are not out to get profit.


James Lorimer Ilsley: Let my hon. friend get this through his head, if he can, that if there is
no profit a cooperative would not be taxable on anything now proposed.


George Hugh Castleden: You define any return as a profit, and a cooperative does not accept that.


James Lorimer Ilsley: No, I do not say "any" return is a profit.


George Hugh Castleden: Any "reasonable return" were the words you used. These are the minister's words:
This reasonable return will be defined as three per cent on the capital employed, including borrowed capital, less the interest paid by the company or association on borrowed capital that is allowed as an expense in the computation of the taxpayer's income. '
This compels true cooperatives, which recognize no interest on capital at all, to violate one of their basic principles, namely that they are not operating for profit, and that they are not looking for a return on their capital. They put money into the business whereby they can carry on business and provide themselves with service at cost, without getting a return on money invested.
This is the point I think the minister might find difficulty in understanding, and I do not blame him. Perhaps he does not understand that people can come together and try to do some good for one another without looking for returns for themselves. These people believe that there is some other motive in life than trying to make gain out of somebody else. There is such a thing as doing service to one's fellow man and helping the little fellow who cannot put a great deal together.


Paul Joseph James Martin: May I point out that there is perhaps no man in this house who knows more about public service than the Minister of Finance (Mr. Ilsley).


George Hugh Castleden: There is not any argument about that. But I would not say that he knows more about cooperatives than other members of the house.


James Lorimer Ilsley: This remark is probably not in order, but I have been the recipient of much sympathy because of my ignorance of cooperative principles. Now I thank the hon. gentleman for that sympathy, but I want to say that I think I have been acquainted with cooperatives as long as any person of my age in this house, because when I was growing up we belonged to a cooperative, and I think I know all about it.


George Hugh Castleden: I will accept the minister's word, but I find some difficulty regarding that statement. I should like to ask him if he invited these cooperatives, cooperative unions and the rest of these people around and suggested that there might be some legislation like this which has been brought in to tax cooperatives, and asked them if they thought it was O.K.

The Budget-Mr. Castleden


James Lorimer Ilsley: I have certainly had many conferences with representatives of' cooperatives over the last few years. We appointed a royal commission after one of these conferences, and after the report of the royal commission came in we were also in touch with them. But we did not submit the budget to the cooperatives any more than we did to the trade.


George Hugh Castleden: Apparently the minister has also had around him, close to him, some men from the private grain exchange, for the past few years.


James Lorimer Ilsley: That is correct; I have had representations from the grain trade and from other private institutions. But it is my duty, I think, to receive representations from Canadian citizens. I think a larger volume came from the cooperatives than from the other element. But I do not refuse to hear representatives from both sides.


George Hugh Castleden: Has the minister any representatives in his department whom he recently borrowed from the grain trade?


James Lorimer Ilsley: No.


George Hugh Castleden: In the past five years?


Douglas Scott Harkness: It seems to me that the question is not as to who understands most about cooperatives, but who knows best how to mount a soap-box.


George Hugh Castleden: I thank the hon. member very much for the valuable contribution of the Conservative party. I thought he might be kind enough to thank me for permission to make the interruption. I think the worst blow of this set-up is the blow which was aimed in retroactive taxation.


James Lorimer Ilsley: What does the hon. gentleman mean by "retroactive taxation"?


George Hugh Castleden: I mean the effect of the budget. The minister says that he is going to apply taxation against the wheat pools in the west. He also stated, as reported in Hansard, at page 2923.
Furthermore, the government is willing to allow as a deduction from taxable income patronage dividends, refunds of excess charges, and similar amounts actually paid in cash by the wheat pools in fiscal years ending in 1942 and 1943, but not in 1944 and 1945.
That is what I mean.


James Lorimer Ilsley: It was not applied in the budget, nor is it proposed to have any legislation. The assessment was made years ago. My hon. friend is suggesting that we drop those assessments, discontinue our case, walk out of court. That is what he is proposing.
63260-223-J


George Hugh Castleden: No; I would like you to take your case to court.


James Lorimer Ilsley: We are just saying, if you want to do it in this other way, all right; but
if you do not want to,-


George Hugh Castleden: Why did you assess them in 1944 and 1945?


James Lorimer Ilsley: Because we had an opinion of the Department of Justice that they were liable.


George Hugh Castleden: How about the decision of the court? If they had protection under 4(p) from 1930 to 1942 and 1943, they had it in 1944 and 1945.


James Lorimer Ilsley: Well, no. The method of business changed greatly, as the hon. gentleman well knows. After 1929 or 1930 the method of business changed completely, and there came a time when the Department of Justice gave the opinion that they were now taxable, whereupon we assessed them, as it was our duty to do in justice to the taxpayers of Canada.


George Hugh Castleden: Were you not
challenged?


James Lorimer Ilsley: Yes.


George Hugh Castleden: Well, did it go to court?


James Lorimer Ilsley: Yes. We are-


George Hugh Castleden: Where is it now?


James Lorimer Ilsley: We are in court at the present time.


James Horace King: Order. The hon. member has exhausted his time.


An hon. MEMBER:: Who exhausted it?


George Hugh Castleden: Mr. Speaker, it is not very often I question-


Some hon. MEMBERS:: Time.


James Horace King: The hon. member knows perfectly well the rule that an hon. member who has the floor is not interrupted without his permission. He has answered questions; he put questions to the right hon. the minister, and whenever the minister rose to address the hon. member he asked his permission and the hon. member gave it. He has now exhausted his time.


George Hugh Castleden: Mr. Speaker, on a point of order, I should like to point out that at the beginning of my speech ten minutes were lost over your-ruling.


James Horace King: I have said already that the hon. member has exhausted his time. Moreover, I must call to the attention of the hon.
The Budget-Mr. McGarry

member that we are not in committee and I should not have permitted a debate like the one we just had.


Mr. ROSS (St. Paul's):: Mr. Speaker, on a point of order-


Some hon. MEMBERS:: Order.


Douglas Gooderham Ross: -I do not think the minister or any other member of the house has the right to make speeches during another member's speech. Let us have the rules of debate observed in this house. The minister has no right to make speeches in contradiction of what another hon. members says.


An hon. MEMBER:: Who is making a speech now?


Some hon. MEMBERS:: Order.


Mr. M. E. McGARRY (Inverness-Rich-mond):: Mr. Speaker, like a great many hon. members who have already spoken, I may say that I did not intend to enter into this debate, but always something arises to incite one to say a few words on an important matter like the bduget. I rise particularly for two reasons, and I can express them in a very short time.
First of all, I wish to associate myself with the hon. gentlemen who have given the Minister of Finance (Mr. Ilsley) such deserved compliments, and I wish to endorse the statements of some hon. members who designated the minister as the best finance minister this dominion has had since the days of confederation. That is one reason why I attempt to say a few words in this debate. Another is to make a few remarks as to what I personally think of this budget.
It is my opinion that it is a matter-of-fact presentation of our financial position. I do not believe that this budget could be expected to be very bright and cheery on account of the awful experience to which the treasury has been subjected. It was encouraging at least to see that the deficit was reduced so substantially from last year, but those who hoped for larger tax reductions were somewhat disappointed. To me it appears that the budget is a forceful reminder to the Canadian people that we have emerged from the most devastating war in history, and while we have achieved victory on the battlefield, we must continue to fight with sacrifice and determination against other dangers which threaten us. Our assumption of obligations in the remaking of the world and our obligations to those who fought for us are important factors in the budget. War was costly and produced only destruction; rehabilitation is costly but 
will produce good citizens of our land, and in some measure, repay the debt we owe to those who left home and loved ones to endure hardships and face death to protect our way of life.
The finance minister is making another effort to bring about a dominion-provincial conference. If we are ever going to get anywhere, we must face up to our national problems as Canadians, not as citizens of the maritimes, Quebec, Ontario or the west. Therefore we must earnestly hope that these last proposals will result in some amicable agreement between the provinces and the federal government.
The budget contains a clause allowing farmers and fishermen to pay taxes on a three-year average rather than on a single year's operations. It was unfair that a farmer or fisherman, so dependent on nature for success should be taxed on, say a $5,000 income this year if last year he actually lost $3,000. The fairness of this proposal, which has been long discussed here, will, I think, receive general applause.
While the step-up in exemption figures was not as great as was hoped for, it should be kept in mind that our figure here is higher than in the United States, Britain or New Zealand. The exemption limits under the present tax are $660 for single persons and, in effect, $1,200 for married persons. As a major part of the present revision, it is proposed that the exemptions be raised to $750 for single persons, and $1,500 for married persons without dependents. This measure, taken in conjunction with the proposal regarding allowances for dependents, will remove entirely from the income tax roll between 550,000 and 600,000 taxpayers, or about one-quarter of the present number. The proposed exemptions will be in the form of deductions from income in the manner of the pre-war exemptions, and the $1,500 deduction will replace the combined income deduction of $660 and the tax credit of $150 granted to married men under the present law.
Consideration was given by the finance minister to suggestions made by persons who may not be familiar with all the facts, that the exemption limits be raised to $1,000 for single persons and $2,000 for married persons, and even that the exemptions be $1,200 and $2,400 respectively. After careful examination of these and other suggestions, the minister came to the conclusion that exemptions of $750 and $1,500 respectively are as high as can reasonably be proposed under present circumstances.

Privilege-Mr. Fraser
In the first place, we must still raise very large amounts of revenue. Even if no tax reductions were made, our revenues will fall considerably short of our expenditures and far short of our total financial requirements for the current year. Moreover, there is already a great excess of purchasing power and we must not add unnecessarily to it. In addition to these immediate considerations, we must bear in mind that the government and parliament face a post-war period in which events are likely to move swiftly, and in respect of which we have accepted a large measure of responsibility for maintaining high employment. Under these circumstances we cannot afford- to reduce our revenues too drastically.
Second, we are all, I believe, agreed that the income tax is the fairest and best tax on which to rely for the bulk of our revenue. More than any other tax, it takes ability to pay properly. into account. We must, I consider, rely upon it as heavily as we can, subject to the limits imposed by its effects on incentive and efficiency. This applies as well in the lower backets a' in the higher. We cannot secure proper equity and fair treatment if exemptions from income tax are so high as to exclude most of those receiving incomes. It is just as important to be fair in the distribution of taxation between persons earning $1,500 and $2,400 a year respectively, as it is to be fair in the distribution of taxation between these persons and those earning $5,000 or $10,000 a year. I have said that we cannot afford to reduce our revenues beyond reasonable figures. In these circumstances, if we raised unreasonably the exemptions for the income tax, or lowered the rates of income tax too drastically, we would only make it necessary to impose other less equitable, even regressive, forms of taxes.
Comparison of our proposed exemptions with those of other countries indicates clearly, I believe, that the figures now proposed are as high as Canada can reasonably go. The suggested exemption of $750 for the single person compares with one of $700 in Australia and New Zealand, of $500 in the United States, and of $490 in Britain. Similarly, the proposed exemption of $1,500 for a married person compares with $1,077 in New Zealand, $1,000 in the United States, $931 in Australia and $800 in Britain. In addition, Britain, Australia and New Zealand have substantial social security taxes which apply at much lower levels than the exemptions I have given for income tax alone.
On motion of Mr. McGarry the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, July 17, 1946.