1946-07-11

Mr. BENOIT MICHAUD (Restigouche-Madawaska):: Mr. Speaker, I rise to a question of privilege. The Montreal Gazette of this morning carries the following heading on its front page:
M.P. scores "Empty Seat" report, accuses Gazette man of bad faith.
I did not accuse the reporter of the Gazette of bad faith. As a matter of fact I did not use the term at all, and the body of the report bears me out on this point. To the mass of readers who do not always read an editorial to the very last line, the heading is most misleading, and so I leave it to the house and the country to determine whether or not such a heading discloses lack of good faith, or just bad faith, to use the words of the Gazette.


Mr. SPEAKER:: Order. The hon. gentleman must state his question of privilege and be brief and to the point.


Benoît Michaud: The newspaper in question insinuates that I accused the reporter of bad faith, which I did not do, when referring to the fact that the house has now but 242 members as the result of vacancies which had occurred recently and of which the reporter did not seem to be aware. I made the following statement in this house, which is reported verbatim in the Gazette:
Either the reporter's sense of observation is no keener than his judgment, or eVo he is disclosing an unusual lack of good faith, and that requires no further comment.


Mr. GRAYDON:: What is an unusual lack of good faith if it is not bad faith?



MR. BROWN-INDIAN AFFAIRS COMMITTEE- NEWSPAPER REPORTS AND HEADLINES

Mr. D. F. BROWN (Essex West):: Mr. Speaker, I rise to a question of privilege affecting the members of a special joint committee of the Senate and the House of Commons. As joint chairman of the committee which is examining and considering Indian affairs I raised this question of privilege at our committee meeting this morning, and the committee have directed me to raise the same question in this house at the first available opportunity.
The question arises out of newspaper headlines and reports which give an entirely misleading, unfair and untrue impression of certain of the proceedings of the joint committee on Tuesday, July 9, 1946. Newspaper reports I hope unintentionally, are unfair to both houses of parliament, mislead Canadians generally and will cause grave distress to the people most concerned-the Canadian Indians. As examples I should like to quote the Toronto Evening Telegram of July 9, which contains this heading: "Defeat motion to put Indians on committee." The Cornwall Daily Standard Freeholder of July 10 had this heading: "Defeats motion to have Indians on committee." The Kitchener Daily Record of July 9 has this: "Reject Indians on Ottawa body." The Owen Sound Sun-Times of July 9: "Refuse to name Indians to Commons body." The Toronto Daily Star of July 9: "Defeat move to let Indians give opinions." The Toronto Globe and Mail of July 10: "Oppose naming of five Indians to house group." The newspapers from western Canada, the maritimes and British Columbia are not yet on file, but it is likely that many of them will carry similar headlines unless some correction is made.

Questions
I have seen the story which was sent out from the House of Commons by the Canadian Press. That story is fair and impartial, and if properly used by the newspapers this question could not have arisen.
Your committee has put itself on record time and again as being unanimous in its desire to give all interested parties the fullest opportunity to make representations to the committee. At present we are getting on record the departmental case. As a courtesy we have already heard representatives of one Indian organization, because they were in Ottawa in conference; and if we can find some feasible means of having Indians in attendance at all times we shall be glad to recommend it. However, the Reverend P. R. Kelly, himself a full blooded Indian, who represents the largest democratically organized group of Indians in British Columbia, and in fact in Canada, has expressed to members of the committee his belief that the present is not the time for the committee to have Indians attend Ottawa constantly to be in attendance during the deliberations of the committee.
But we have, and I think it is important to emphasize this, engaged as counsel and for a liaison officer between the committee and the Canadian Indians, a member of the Six Nations band who is also a member of the Ontario bar. He attends all meetings of the main committee and the subcommittee on agenda and procedure, questions the witnesses, and later, when we arrive at the time to hear representatives of Indian bands, will assist them in the preparation and presentation of their briefs.
It is most unfortunate that the newspapers did not take the time and trouble to make a proper use of the Canadian Press report. This is not the time when the Canadian Indian should be allowed to believe that your committee is not doing everything in its power to give effect to the resolution moved on May 13 last by the Minister of Mines and Resources (Mr. Glen), the order of reference to the committee, or desires in any way to restrict either the scope or the character of our inquiry. I am glad to have this opportunity to assure the house, the people of Canada generally, and Canadian Indians in particular, that the work of the committee will be as thorough, as comprehensive and as searching as it is possible to make it.
Permit me in conclusion to assure all concerned that the committee is doing and will do all in its power to ensure that the revision of the Indian Act will in every sense be the magna charta of Canadian Indians.


Mr. A. L. SMITH (Calgary West):: Mr. Speaker, arising out of a similar question of privilege my complaint is this, that the Midna-pore Gazette, immortalized by Bob Edwards but never published, has not mentioned my name in the last three months.



RAILWAY COMMITTEE

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

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

Mr. McLURE:: 1.	Has the Borden-Tormentine Ferry Prince Edward been overhauled and repaired?
2.	If so, when will she resume her work? Where were her repairs done?
3.	What was the cost of repairs?
4.	Has the Scotia been able to take care of all freight at Borden-Tormentine ferry? If not, how many cars are waiting transportation?


Mr. CHEVRIER:: 1.	Yes.
2.	(a) Resumed regular operation on July 6 at 2:31 a.m.; (b) At Halifax Shipyards Limited, Halifax, N.S.
3.	Not yet finally determined. Specifications can be prepared only of known work to be done prior to entering ship repair plant, but drydocking and examination of hull by steamship inspector frequently reveals the necessity of considerable additional work, and the over-all price has not yet been settled.
4.	The Scotia has taken care of movement of all freight between Borden and Tormen-tine, but there has been some delay in the movement of the lower grade commodities.


VETERANS LAND ACT-LAKE CENTRE, SASKATCHEWAN
Mr. DIEFENBAKER:: 1.	How many applications for (a) land; (b) loans, have been made by veterans under the provisions of the Veterans Land Act within the federal eonstitutency of Lake Centre, Saskatchewan, since the 1st of January, 1945?
2.	Of these, how many have been (a) accepted; (b) refused?
3.	What are the names and addresses of the applicants and what decision was made in each case?


Mr. TUCKER:: 1 and 2. Lake Centre federal constituency is in the Regina and Saskatoon regional areas. The following information is supplied respecting applications for financial assistance that had been reported to the Saskatoon district office from inception of operations to May 31, 1946:

Prairie Farm Assistance
Regina	Received Approved Declined
Full-time farming..	420	259	40Small holding ....	35	25	1Commercial fishing	-	-	-Provincial lands...	26	21	4Saskatoon Received	Approved	DeclinedFull-time farming.	414	260	25Small holding ....	35	19	8Commercial fishing	1	1	-Provincial lands...	10	7	-
The number of properties purchased in the constituency of Lake Centre since January 1, 1945, as shown on head office records is 51.
3. It is not considered to be in the public interest to disclose information of -this nature affecting individual veterans.


ST. LAWRENCE WATERWAY
Mr. ISNOR:: 1.	Has the Canadian government made a survey of the St. Lawrence waterway project to determine (a) what benefits, if any, would accrue to Canada from this development; (b) particularly in relation to the competition which will thus be created to the Canadian National Railways?
2.	If so, what is the date of such survey?


Mr. MACKENZIE KING:: 1.	Yes. The following surveys of the St. Lawrence waterway project which are concerned with the benefits to be derived from the development and with the competition with other forms of transportation have been issued as Canadian public documents:
(a)	Report of the international joint commission on the St. Lawrence Navigation and Power Investigation 1921, submitted to both the Canadian and the United States governments on January 6, 1922;
(b)	Report of the Canadian national advisory committee submitted to the Prime Minister on January 11, 1928.
A special committee of the senate also heard evidence, received documents and presented a report to the senate on June 6, 1928.
2.	Answered by No. 1.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. ROSS (St. Paul's):: 1.	Who are the personnel of the Canadian
Information Service?	_
2.	Where does each one live and what is his regular occupation?
3.	What do they receive by way of salary and remuneration?
4.	In what way is the service organized and what office, if any, does each one hold?
5.	Is there an executive of the service, and if so how often did they meet in 1945?
6.	What days and how many were present at each meeting?
7.	Are the meetings open to the public?
8.	Have any persons other than the executive of the service attended the meetings, if so, who are these persons and on what occasions did they attend?


IMPORTS OF CORN
Mr. HATFIELD:: 1.	What quantities of corn were imported into Canada in the years 1941, 1942, 1943, 1944, 1945 and 1946 to date?
2.	From what countries?
3.	What subsidies were paid each year on the above corn?
4.	For what purpose was the corn used?
5.	Have any subsidies been offered to the Canadian growers of corn to induce greater production?



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Hon. J. G. GARDINER (Minister of Agriculture) :: Mr. Speaker, the hon. member for Maple Creek (Mr. McCuaig) on Monday last asked me a question with regard to the bringing down of amendments to the Prairie Farm Assistance Act. At that time I stated that while my estimates were under consideration I had indicated that it was the intention to bring down amendments this session and refer them to the agriculture committee. I had hoped that the bill would be prepared and ready to present to the house at a much earlier date than this. As a matter of fact it was prepared just before I left to go west three weeks ago and could not be given final consideration until I returned. It is now suggested to me that to place this bill before the house at the present time would have two results which might not be helpful so far as this session is concerned. In the first place there are, I think, sixty members on the agriculture committee, and therefore many members who are now tied up almost continuously on other committees would have to sit almost daily from now until the end of the session to consider the bill; in the second place, full consideration could not be given even then. It has been suggested that hon. members be permitted, when my supplementary estimates come down, to ask any question on prairie farm assistance which they desire to ask on my general estimates; that I take time then to answer those questions, and that the legislation be not brought down until early next session, when it can be referred to the agriculture committee and there will be more time to discuss it thoroughly and go into all the details. If this meets with the
Labour Conditions

approval of hon. members, I will bring the legislation down not this session but early next session.


Mr. BENTLEY:: If there is no bill this session to amend the Prairie Farm Assistance Act, will that prevent changes in regulations for this year's operations if the suggestions are acceptable to the minister?


James Garfield Gardiner: No. There is a general section in the act which provides for the making of regulations. I presume it would be the same in an amended act. The regulations could, if thought desirable, be changed.



SEED ACT


[Stage Direction]
On the orders of the day:
Mr. MARK C. SENN (Haldimand): I understood that earlier in the session the Minister of Agriculture suggested that the Seed Act was to be revised this year. Is there any intention of bringing down now a new bill?
James Garfield Gardiner: I am not certain about a revision of the Seed Act. There was a suggestion made earlier in the session, which I hope and believe is being carried out, that some provision be made in the supplementaries for payments which had not been provided for in the regular estimates and which it was understood would be provided for. I think the passing of the estimate itself in that regard constitutes legislation upon it. But there is no change made in that intention, if that is what the hon. member had in mind.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: I should like to direct a question to the Minister of Labour, of which I have given him notice. Because of inquiries I have had in the province of Saskatchewan may I ask if railway companies are subject to provincial legislation regarding holidays with pay for their employees?


Hon. HUMPHREY MITCHELL (Minister of Labour):: I thank the hon. gentleman for sending me notice of his question. In answer to him I can only say that the question is a legal one which may eventually have to be decided by the courts. The legal departments of the railways. I am informed, have discussions under way with the provinces and I prefer to refrain from expressing an opinion for the present.



APPOINTMENT OF CONTROLLERS FOR STEEL INDUSTRY-NOTIFICATION TO UNITED STEELWORKERS

[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: I wish to ask a question of the Minister of Labour, arising out of a long distance telephone call I got from Toronto just before I came into the house. Did the minister say that the representative of the united steelworkers of America bad received a copy' of the order in council which he tabled in the house yesterday? The complaint is that they have not received it.
Hon. HUM-PREY MITCHELL (Minister of Labour): The order did not go through council until about half-past four yesterday; it then had to be signed and passed through the usual channels, but I did instruct my department to send copies forthwith to the parties concerned. That is purely a matter of mechanics; it is always done in that-way.


Mr. CLARENCE GILLIS (Cape Breton South):: May I ask a supplementary question arising out of the one just asked by the hon. member for Vancouver East? At the present time a maximum increase of approximately ten per cent or ten cents an hour is fixed by the wage regulations. Is that mandatory in the present steel dispute, or has the controller power to negotiate further with the war labour board if he so desires?


Humphrey Mitchell: I have no knowledge of any fixed amount in any regulations of any kind whatsoever. My advice to the leaders of some labour organizations-and I am now speaking of a very small minority-is that if they would avail themselves of ,the machinery that is set up I do not think we would have a strike in Canada to-day. Let me say very plainly to my hon. friend, because I think it should be said, that down through the years labour and employers have asked for representation on boards. Now I know that some of the young men who are in charge of organizations to-day, who have not had the experience of some older men like the hon. member and myself, believe they are rendering a service to organized labour by circumventing the machinery set up for the settlement of disputes. I think that in the light of experience they will find out that they were wrong. Consider my own position. These people take the men out on the street, as they say, and they are out for a while; they break agreements with the employers-I am not speaking generally, you understand-[DOT]


Clarence Gillis: Or of the steel workers.

Foreign Exchange


Humphrey Mitchell: No, I am not speaking of the steel workers, that is true, because they are not on strike yet. But they take these people out on the street, and then, when they get into a jam, as they say, they come to me and ask me to get them out of it. I believe that the sanctity of contract is the very basis of democratic life, and I do not think that anybody, be he employer or employee, who deliberately breaks a contract is rendering any service to the organization he is supposed to represent, or to himself, or to the country.


Clarence Gillis: Mr. Speaker, I hardly think that lecture was called for by the question I asked, because I too agree as to the sanctity of contracts. But the present dispute involves a large percentage of the steel workers in my own community.


James Horace King: Order.


Clarence Gillis: There has been no strike there. They have been negotiating.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I mentioned yesterday that I hoped to be able to make a statement to-day on Canada's representation at the Paris conference. Hon. members will have noticed that in the invitation which was accepted there is mention of the following fact:
Detailed particulars of the organization of the conference and of the rules of procedure recommended for consideration will be forwarded to the Canadian embassy in Paris.
I have cabled the embassy to see if it is possible to get this detailed information before making a statement to the house. I expect to have it in time to make a statement to-morrow afternoon.



RESERVE ARMY


[Stage Direction]
On the orders of the day:
Mr. P. C. BLACK (Cumberland):: I should like to ask the Minister of National Defence whether any consideration has been given to the recommendation of an honour list of members of the reserve army, which rendered such valuable services and carried out its duties so faithfully during the entire period of the war. Is it proposed that the services of these men be given any special recognition?


Hon. DOUGLAS ABBOTT (Minister of National Defence):: I thank my hon. friend for his question, which has been asked by some
other hon. members. I am glad to be able to say that an appropriate certificate has been authorized expressing the government's appreciation of the devoted services rendered by the men who served in the reserve army during the war. It will be available to all who were not on active service but who had not less than six months' service in the reserve army, and it will be issued through the commanding officers of the units concerned.



FOREIGN EXCHANGE


[Stage Direction]
On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens): Mr. Speaker, I wish to direct a question to the Minister of Finance, of which I sent him notice as soon as I received it myself. What protection will be afforded to an exporter of goods to the United States who signed B-13 form with the foreign exchange control board, thus contracting to bring back American money, prior to the parity of Canadian and United States funds, and who shipped, delivered and sold but had not received payment? Will he receive SI.10 Canadian money on his contract with the foreign exchange control board?
Right Hon. J. L. II.SLEY (Minister of Finance): The answer to the question is as follows:	Facilities have been available by
which exporters could cover themselves against exchange risks for certain periods ahead by entering into a forward exchange contract with a Canadian bank acting on behalf of the foreign exchange control board. If the exporter had entered into such a contract he would receive an amount of Canadian dollars based on the exchange rate prevailing at the time the forward exchange contract was made. If he did not enter into such a forward exchange contract, he will receive the rate prevailing at the time the exchange is sold to his bank in Canada.

[Stage Direction]
On the orders of the day:
["Mr. Speaker, I shall not waste what little time I have in discussing other matters. I have but a few moments left to utter my remarks on federal policies and I cannot use part of them to answer the question that has just been asked. I shall merely add that to my mind the habit of a sister of charity, the cassock of a priest, are just as sacred as the uniform of a nurse of the Victorian Order or the uniform of a British soldier.\nIn the province of Quebec we were faithful to the teachings which were instilled into us in so far as communism is concerned. In our\n\nThe Budget-Mr. Gariepy\nuniversities and our schools, long before the recent events took place, we had erected a bulwark against that nefarious doctrine. I have in my newspaper clippings an article which appeared in the Montreal Gazette, the Tory sheet of Montreal, lauding Stalin, Russia's hero.\nIn keeping with those teachings, our province, once war had been declared, held fast and accepted all sacrifices in men, in munitions, in food and in money. In my modest town of Three Rivers all victory loans exceeded their\nobjectives. Everyone, the rich as well as those of average means, responded to the appeal. In regard to the war itself, my youngest son volunteered and spent five years overseas, under enemy fire. We have accepted all that, Mr. Speaker.\n(On motion of Mr. Gariepy the debate was adjourned)."]
Mr. J. H. BLACKMORE (Lethbridge):: I desire to direct to the Minister of Reconstruction and Supply two questions pertaining to financial asistance to coal producers in Alberta. First, were Acadia Coal Mines Limited, of Calgary, Alberta, refused a hundred thousand dollar loan by the Industrial Development bank in May or June, 1946, the loan being sought to increase coal production? If so,
The Budget-Mr. Boivin

will the minister at an early date tell the house (1) why this loan was refused in these times of dangerous fuel shortage; (2) what the government is doing to enable this coal company and any other coal cohapany similarly situated to obtain the financial assistance necessary to increase production of coal?


James Horace King: Order. I would ask the hon. gentleman to put his question, which is a lengthy one, on the order paper.
[Later]:


John Horne Blackmore: Mr. Speaker, shall we get an answer from the Minister of Finance with respect to these questions?


James Horace King: I have asked the hon. member to put his question, since it is a lengthy one, on the order paper.



[Stage Direction]
The house resumed from Wednesday, July 10, 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. Maedonnell, and the amendment to the amendment of Mr. Maclnnis.
Mr. MARCEL BOIVIN (Shefford) (Translation) :: Mr. Speaker, since the first session of the 20th Parliament was convened, the electors of the constituency which I have the honour of representing carefully followed the various reports on the House of Commons appearing in the newspapers and probably wondered, rightly so, when their member would rise to speak in this chamber. The moment, so long-awaited by many is finally at hand, and since the electoral division which I represent is mostly French-Canadian, I will take the liberty of speaking in their language, which is also mine, that is to say, in my beloved mother tongue.


Some hon. MEMBERS:: Hear, hear!


Marcel Boivin: Since coming here, I have leatned that a member of the Liberal party has a right to his opinions and convictions-


Mr. GAUTHIER (Portneuf):: Hear, hear!


Marcel Boivin: -in that ease, it may well be that I shall differ with some of my colleagues, but as I am aware of my rights, I consider it my duty, with reference to the budget now before the house, to express my opinion shared, I might add, by a large section of my constituencj'.

The budget is the most important item and if discussion of its provisions were left only to the financial experts of the house, the debate would soon end and it would be carried in no time.


Some hon. MEMBERS:: Hear, hear!


Marcel Boivin: May I at the outset congratulate the Right Hon. the Minister of Finance (Mr. Ilsley) for his masterly budget speech and for the manner in which he has accomplished such a thankless task, although he has been in poor health during the last six years.
After taking cognizance of the real meaning of the budget and in view of the confidence which our constituents have placed in each one of us, I consider that it is our duty, whoever we may be, to express our views. Some people claim that speeches delivered in this house are not very effective. I believe that eventually they will change their minds for in my opinion those speeches have always received and will continue to receive consideration. Further they are placed in the official records of the house in support of our statements and show whether we are right or wrong.
I have listened carefully to the mover of the address in reply to 'the speech from the throne, my colleague from St. Boniface (Mr. Viau); may I digress here to say that bishop Cabana of St. Boniface is a native son of Granby, and the constituency which I have the honour to represent is proud of him. I have also listened carefully to the seconder of the address, the hon. member for Queens-Lunen-burg (Mr. Winters). You will agree with me that both did their work with the same mastery and ability as their predecessors of the first session and one might have been led to believe that they had several years of experience in parliament.
Lord Athlone's message on the occasion of the opening of the second session, that is shortly before his departure, was followed with interest and even read over again by the members of the house following its publication. As I read it later, I shall take the liberty of referring to it when I conclude my remarks.
Mr. Speaker, since your appointment to that office, several of my colleagues have spoken in this house for the first time, either in reply to the speech from the throne or on various other matters.
You have, more than anyone else, been in a position, especially in view of your experience in the Legislative Assembly and the House of Commons, to appreciate their tact in fulfilling such an arduous task, and those are moments which remain forever in the

The Budget-Mr. Boivin
memories of the members elected by the people to represent them in the House of Commons.
Having spoken about my predecessors, I think it is my duty, at the beginning of my speech, to introduce myself and beg your indulgence as I am no philosopher.
You have no doubt noticed that I am one of the tallest members on the government side, but 1 am also one of the youngest.
You can easily understand why the diffidence I now feel is much greater than that of my predecessors, and for quite a good reason which I should like to state.
I had the honour to visit Parliament Hill as a young child, and my constituents showed their confidence by electing me as their representative, old memories come back to my mind. I may add further that when I went to the library in order to glance through the debates of many past years I noticed that thirty-five years ago, just a few days after the opening of the first session of the twelfth parliament, that is on November 29, 1911, in this very house, the then youngest member delivered before His Honour Thomas Simpson Sproule his maiden speech as the member for the constituency which I now have the honour to represent. While I am not a professional man, Divine Providence has ordained that the son should follow in his father's footsteps in order to protect, defend and assert the rights of his fellow-citizens.
On August 7, 1926, Divine Providence called to his reward a man who had devoted the best that was in him to his party and his country. He had been entrusted with the functions of Deputy Speaker of the house and later on, just about a year before his decease, that is, in 1925, those of Minister of Customs and Excise, duties which he honourably discharged in spite of the strong campaign waged by the opposition of that time.


An hon. MEMBER:: Hear, hear!


Marcel Boivin: I shall never forget the following message of sympathy sent to my mother, by the then prime minister, who is still at the head of the administration, the Right Hon. William Lyon Mackenzie King:
No other man of his time has rendered so many services to his country, with so much devotedness and loyalty, both as member of parliament, and as minister of the cabinet, as did the late Hon. Georges-Henri Boivin.
I feel it my duty, as one of the successors of the faithful supporter of the party and defender of his fellow citizens, to relate these facts to my younger colleagues from Quebec and the other provinces, so that they might draw inspiration from them and follow in his
footsteps during the transition period on the threshold of which we stand at the present time; thus, we shall ease to a certain extent, the heavy burden of our cabinet and, in particular, of the Prime Minister, who has directed our country through six long years of war, in such a way as to ensure its prosperity and cause it to be better knowm throughout the world as a country in which it is good to be living.
I grant, Mr. Speaker, that I should have liked to take part in this debate before to-day, but felt it my duty, as a junior member of the house, to take my bearings and first look after the interests of my constituents, by answering their requests and fraternizing with them, as I have ever done in the past, so that I may better understand their needs, which are largely those of the province and of the country at large.
May I be allowed to digress at this point in order to pay them tribute. Yes, the urban worker and the rural worker have indeed devoted time and energy to send one of their number as their representative in Ottawa; and you may be sure that, in return, I strive to represent them with that same sincerity which is theirs to such a high degree. Mr. Speaker, I was saying just now that they have made their needs known to me and, therefore, as their representative, it is my duty to acquaint you with those needs and tell you what the people of Shefford expect from the central government.
The county of Shefford lies in one of the most picturesque parts of the country, a region known as the Eastern townships, about 45 miles from the metropolis. Its industrial centre is my own home town of Granby, also known as the Princess of the Eastern townships, a most fitting appellation in view of the many parks and playgrounds that grace the locality. With a population of some 20.000, it boasts of some fifty different industries which provide employment due to the initiative of its business leaders.
I should add that the city of Granby also feels the effect of reconversion. We have our quota of unemployed. Its public organizations, such as the junior and senior boards of trade, and others too numerous to mention, are constantly on the lookout for new industries, ready to welcome workers and, thus decrease its claims on unemployment insurance.
Several of its citizens live in a princely fashion in this queen city, owning their homes of which they are justly proud.
On the other hand, a great number of our citizens are still homeless. In view of their insecure position, the town of Granby appealed
The Budget-Mr. Boivin

to the people through its radio station, its daily, its French and English weeklies, to provide them with housing facilities, but all to no avail. A government subsidiary company was approached, but answered that the number of our veterans was too small to warrant such building projects. Some time later, I took upon myself to inquire from a member of the legion in Granby the number of returned veterans. I learned that up to now we had more than 600. As a reward for the sacrifices they made overseas, those brave men would ask for nothing more than a home, however small. It is rumoured that the company to which I referred is ready to reconsider its decision. Meanwhile, a large portion of the people are waiting to see this hope fulfilled.
May I be permitted at this point to mention the county town of Waterloo, whose loyalty to the party in power has not wavered, although its two munitions factories were closed at the beginning of June last year. It can boast of the greatest war effort on the basis of its population. I tried vainly to secure the crown buildings for the municipal authorities. They were sold to strangers by the War Assets Corporation, to be demolished. Waterloo is left waiting for a new industry to absorb its unemployed, as a reward for its war effort. In view of the above mentioned facts, I hope that the wartime prices and trade board will cooperate in the way indicated recently by the Right Hon. Minister of Reconstruction (Mr. Howe)	to help this municipality.
Because of our returned veterans and of a floating population which has come back to its pre-war domicile, there is a housing shortage in Granby and Waterloo, as in most other cities and municipalities of the country. I hope, Mr. Speaker, that for a long time to come, the Minister of Finance will keep in office the housing administrators all over the country.
Several of my colleagues and myself have been informed of a shortage of building materials which contractors expect from manufacturers; rumour has it, however, that the latter must attend to priority orders before supplying other customers. That being the case, it is to be hoped that the building trade will increase its activity in the near future so that several thousand families now living in inadequate quarters may be properly housed. With reference to this industry, may I draw your attention to existing conditions and while my suggestion will not, I hasten to add, solve the construction problem it can substantially improve the situation. Throughout the country, at present, many wholesale merchants dealing in building materials are issued licences authorizing them to do both whole-
sale and retail business; nowadays, they tend to limit themselves to retail trade which is more profitable to them; contractors who formerly had the right to buy at wholesale prices and are now forced to pay retail prices, naturally refuse to purchase at an increased price. Distributors take advantage of the shortage of materials to make unreasonable profits, and in my opinion inspectors should be appointed to make sure that they sell at wholesale prices, for if their business was profitable in normal times they should, in return, do their fair share in critical times. I am sure that such steps would help to curb black market operations and materially increase the building of houses.


Mr. COTE (Matane-Matapedia):: Hear,
hear.


Marcel Boivin: The primary purpose of the budget in former years was to bring the war to a successful conclusion. Why should it not aim to put an end to difficulties occurring not overseas this time but right here in this country?
Speaking of the budget, I wish to refer to [DOT] a problem which is being discussed from coast to coast at present, a problem which it seems dangerous to tackle. This matter is highly important but it seems that my older colleagues are reluctant to discuss it. I am speaking of army deserters. On July 4, 1946, the Ottawa Journal, five o'clock edition, published an article under the following headline which appeared in large type: "The Provost Corps is seeking 14,000 deserters".
It read as follows:
The Mounted Police and Provost Corps are still seeking 14,117 deserters, of which 5,819 are volunteers and 8,298 have been called up.
After reading that item I wondered whether the Minister of National Defence (Mr. Abbott), in spite of his numerous occupations, ever took time to discuss this matter with the Minister of Finance in order to ascertain the cost to the country of these gentlemen, who deserted the army for a reason which in their own mind appears quite legitimate, and of which you are all aware.
Some people seem to believe that deserters cost nothing to the country as long as they are absent without leave. I do not agree with that opinion, especially since I visited military camps and found out that officers and men are waiting for the return of the deserters, and spend their time playing cards or fooling around; they seem to hope that the deserters will take their time to return so that they may keep their well paid jobs, especially in the case of officers. It is only natural that those

The Budget-Mr. Boivin
officers should want to remain in the army, in view of the higher rate of pay they are drawing in addition to dependents' allowances in the case of married men.
Mr. Speaker, I would like to continue my speech on this same matter but to speak about judges of military courts.
In the opinion of the rank and file in the camps those men have some of the nicest posts in the army, and you may rest assured that the judges want to acquire as much credit as possible by condemning deserters to twenty months, or even more, in order to make a good name for themselves and keep their highly-paid jobs as long as possible.
I again wish to refer to that item from the Journal which I mentioned a while ago. I must say a few words about the members of the provost corps who go around in the country to look for deserters and, in 90 per cent of cases, make useless trips at the expense of the Department of National Defence, whose estimates are included in the present budget. We must take into account the fact that most deserters do not have the same education as the majority of members of this house. I beg you to believe that when they deserted the army they were willing to fight for their country, but not for another country where they never lived and which really did not mean anything to them. It is true that they deserted the army, but they would have been willing to fight had their country been threatened.
Mr. Speaker, although I do not yet know much about life in Parliament, I have already made representations several months ago to the appropriate authorities regarding the way they are treated and, later on, I heard that the lot of deserters had been improved. I speak in their behalf again and I beg you to believe that they are not murderers or thieves, and I am convinced that they should receive a reasonable sentence.


Mr. DECHENE:: Hear, hear!


Marcel Boivin: You are no doubt under the impression that I am going to request an amnesty on their behalf, but I admit, Mr. Speaker, that this would not be practical, because the resolutions passed by the various legions would run counter to my request. I shall voice my personal opinion by stating that the best course to follow, in view of the fact that scarcely one year after the war of 1914-18 we granted full amnesty, I am wondering why the Department of National Defence does not make another concession this time, 63260-211
by punishing deserters with a 30-day jail sentence. The latter admit that they transgressed the law which had been passed by a majority in this house. So that I may be clearly understood I repeat that they transgressed a law of their land, but that they did not default against their country, because the latter was not threatened. Most of those deserters would submit to the law provided we give them a reasonable punishment and a humane treatment. This would considerably decrease the military estimates which, after all, are connected with this budget. Our people could then resume their pre-war employment and help to insure a sorely needed increase in our industrial and agricultural production. Fair treatment in their case would help production and those men would thereby be enabled to earn their living honourably and pay their fair share of taxes.
It is true that the government has levied heavy taxes on workers during the last six years and I know whereof I speak because I was one of them until June 11 last. I may add that we have accepted those taxes because we knew that they were necessary. The war has ended over a year ago and, now, the working people expect a fair decrease in taxes. You may be sure, Mr. Speaker, that they have done their duty and deserve proper consideration. Allow me, Your Honour, to quote Right Hon. Minister of Finance, whose statement appears in Hansard of June 27:
A review of our war finance and of our other economic policies and activities during the war would remind us of many achievements in which Canadians may justly take pride.
This is an excellent excerpt from the budget speech of the Minister of Finance. The credit given to our fellow citizens by the minister is well deserved, especially if we consider that the war not only has caused the sacrifice of the lives of our sons overseas, but has also broken Canadian homes and spoiled the future of thousands of our young men. Going still further, demobilization costs, in the previous budget, that of October 12, 1945, represented a percentage of 83-23 of our total expenses, or the fabulous sum of $4,418,446,000. I will admit, Mr. Speaker, that our population accepted the budget of 1945-46 realizing that war had ended but a few months previously, but, to-day, war being over for more than a year, it is regrettable that it has been found impossible to reduce the percentage by more than 8 per cent, since it remains at 75-85 per cent. This may be, in part, an explanation of the delay, until next January, in granting the tax deductions.

The Budget-Mr. Boivin

Mr. Speaker, the minister stated in his speech that taxation was the fairest means of providing revenue and that taxpayers' ability to pay was being taken into account. This, he says, applies to the low income earner no less than to people in the higher income brackets. As far as salaries are concerned, I agree, but when it comes to the taxation of professional men and business men, on this point, I must differ to some extent with the Minister of Finance. In order to achieve a fair distribution and to ensure equitable treatment to the people of this fair country, we should start with paying fair wages to the income tax assessors throughout Canada, so that they may further the interests of the department and tax all classes on the same basis. If they rvere paid a decent wage, the income tax assessors would better serve the interests of the department instead of catering to individuals. Tax revenues would thus soar and provide relief for the wage earner.
Mr. Speaker, I was also struck by the minister's statement to the effect that this period of numerous and persistent shortages, with the present strong demand for commodities, was obviously not a good one in which to embark upon a large-scale programme of public works. He added, however, that, as a result of the war, and of the depreciation of public property, many of our resources have been depleted to such an extent as to make it necessary for us to prepare long-term plans for a decided effort in all branches of public works when circumstances render them feasible. In this connection, Mr. speaker, I might add that in my riding of bhefford the people are living on expectations. We are in great need of such a programme of public works. It should materialize soon, considering the millions of Granby dollars which have found their way into the national revenue. I must congratulate the Right Hon. Minister of Finance on his presentation of the difficult financial relations between the dominion and the provinces, which have called for a great deal of extra work in the preparation of the budget. I realize that a prosperous central authority working in the general interest is essential to prosperity in the country.
May I be permitted to say, Mr. Speaker, that the people of Shefford are well aware of the minister's predicament and understand the pressing needs for great quantities of our products overseas. We know also that these countries are in no financial position to pay cash and that -we must extend our credit to them. As the Minister of Finance so aptly said, it is all very well to replace our expenditures for the last six years by investments which w'ill add to the productivity of our 
country, but we also believe that such credits should bear. interest, if they are being used I commend the government for its initiative and foresight and add, as was so aptly indicated by the minister in his speech, that in an unsettled and restless world, it is impossible to determine the economic trend of the future, which justifies us all the more in continuing to lend a helping hand since our investments bring returns.
In the budget speech, Mr. Speaker, I also carefully noted the section which dealt with the simplification of the tax procedure with regard to individuals, but I regret that the budget does not raise the exemption, formerly set at $660 for single people and $1,200 for married men, above $750 and $1,500 for these respective groups. It is to be hoped, however, that the suggestions of my colleagues will be implemented and that the pre-war exemption of $1,200 for single people and $2,000 for married men will soon be in effect.
Mr. Speaker, I now come to the other section of my constituency which is not the least important; I refer to the farming population which, to my mind, deserves immediate consideration if we would halt auction sales and the exodus from the land in our constituencies.
The county of Shefford is not outstanding for its agricultural products in general but the dairy production is unequalled. The wartime prices and trade board placed a ceiling price on butter and subjected this industry as well as other industries to certain restrictions. I deem it my duty tff call attention to the following, but before doing so I wish to congratulate the government for having allowed, a few months ago, an increase of four cents per pound in the price of butter. On that occasion I carried out a survey in my constituency and I found out that milk had a butterfat content of 3-5 per 100 pounds, which meant a thirty-five cent premium for the producer. The latter was receiving for 100 pounds of fluid milk giving 34 pounds of butter the sum of $1.04 plus thirty-five cents premium, a total of $1.75. On the other hand fluid milk could be sold in the metropolis for $3.05 per 100 pounds, including premium, or $2.70 after deducting shipping costs. I personally found out at the time that there was a substantial difference between those two prices in addition to the difference in the amount of labour required. This may explain the scarcity of butter.
In 1938 the agricultural cooperative of Granby township was organized. I may add that the people of Granby, as well as myself,

The Budget-Mr. Boivin
had some doubts as to its success, but from that moment I realized that the agricultural classes wished to get together in order to help one another and overcome the obstacles which they might have to face. I may add that the cooperative has met some difficulties but with the help of its 550 members, belonging to fifteen parishes in the vicinity of Granby, it has succeeded in overcoming them. In short, unlike a trust, the cooperative instead of exploiting the farmers, has made them prosperous and it wishes to continue to do so. It has entrusted its management with the creation of a powdered milk division which would produce for every hundred pounds of fluid milk thirteen pounds of powdered milk priced at thirty cents a pound, plus the bonus of thirty cents per 100 pounds; it would mean a profit of $4.40 which the cooperative would pass on to the farmers.
Let me add. Mr. Speaker, that I am acquainted with the cooperative movement in our province and that I give it credit for having helped the farmers to withstand bard times, because I remember how, not 'ong ago, the farmers were living in poverty. as regards the provisions concerning the cooperatives in this budget, I support the amendments proposed by the Department of Finance and the general attitude of the government, but I reserve the right to criticize the provisions of any bill that may be based on the government's proposals. I wish to take this occasion to compliment the minister for having spread over three years the income tax to be paid by the farmers.
Hogs are also raised on a large scale in my constituency, which in this regard takes a high rank, in proportion to its population. While I was speaking of butter a few moments ago some of my colleagues no doubt were thinking of the by-products. Yes, Mr. Speaker, a medal always has two sides and you-, no doubt, know that the slaughtering permit system -was adopted so as to control and ration meat; and, for my part, I consider these permits, as far as pork is concerned, as having outlived their usefulness, and I wish to bring the facts of the matter to your attention. Each month, a permit holder can only slaughter his quota, which is very low in our rural districts. It happens that a number of farmers take pigs to the slaughtering house, when they are ready, but the permit holder has to tell them that his quota being filled, he cannot accept them. The farmers must then take them back to the farm and wait another month in order to comply with the instructions of the Wartime Prices and Trade Board, and when they take them back they are placed in a lower class, if not rejected.
63260-211J
I revert now, Mr. Speaker, to my opening remarks on the throne speech. For more than a year the European war has been a thing of the past. We are glad of it but we realize that many countries who have resisted to the armed forces of an enemy bent on world domination are still to-day in the throes of privation, suffering and1 even starvation. May I remind those people overseas that Canada understands the sacrifices they have made to protect us from the dictators. We are prepared to help them as much as we can. We wish to develop. We desire the memory of those who fell on the battlefields to live forever. We intend to increase our export trade which has been promoted by the war.
In conclusion, I would ask the leaders of Canada to supply the needs of our own people, for charity begins at home. By such action we shall prosper, thus acknowledging that the sacrifices accepted for the glory of our country have not been useless.
May I repeat, Mr. Speaker, what I said at the beginning of my speech when I commended the stand taken by the Minister of Finance. In expressing by appreciation of the budget I told him that I understood the thankless task devolved upon him. I grant that, in view of the difficult years that lie ahead, he can hardly count on the improvement of the situation and I am sure that, under the circumstances, if all the members of this house who are more conversant than I am with parliamentary procedure, should undertake to supply some constructive criticism and express ideas which might directly or indirectly be of benefit to the Minister of Finance, while at the same time endorsing the present budget we should thus become truly worthy of the confidence shown us by our constituents and be of service to our party and our country.
(Text):
Mr. Speaker, with your permission I should like, to make the second part of my speech in English. I want you to know that it will be quite a task for me to attempt to express myself in a language which is not my own, but please believe that I am glad to do so in order to show the hon. members of this house the understanding that prevails in my riding among the French and English speaking people. I would ask you to be my interpreter with the English speaking members of this house and to offer them my congratulations for the initiative so many of them have shown in learning French. This will give French and English speaking members an opportunity to express their own opinions and to understand one another better after so many years of misunderstanding, all of which will be to the greater advantage of our country.
The Budget-Mr. Boivin

As I have just said, since the majority of hon. members understand French I do not wish to repeat in English what I have said already in French. However, I should like to repeat one of my first remarks. The present budget is extremely important, and it is the duty of my colleagues to rise and express their points of view or the opinions they have received from their respective ridings. As you may have noticed, it is not my intention to criticize the government on the past administration. Yesterday is yesterday and to-day is to-day. Therefore let us thrust aside the criticism made by many hon. members and express fundamental ideas which will be of benefit to the country in the future.
I should have liked to see a change made in the twenty-five per cent luxury tax which was imposed on jewellers during the war The population accepted this tax while hostilities continued, but to-day they are asking for relief. Personally I believe that their demands are justified. They are willing to accept a twelve and one-half per cent luxury tax deducted at the source. Some contend that this would cause additional work for wholesalers, but that is not so, because already they are-organized to collect the eight per cent sales tax. I would add that at present certain articles are sold in hardware and other stores without the payment of a luxury tax when in fact these articles should come under the luxury tax.
Along with a great number of members I have received representations with regard to the double taxation imposed upon soft drinks. I was hoping that at least one of these taxes would be done away with, especially when we realize that the consumer of soft drinks is the daily worker in the country upon whom we have already imposed many other taxes. These w'orkers accomplished a great war effort; let us grant them some relaxation.
There is a rumour that the Minister of Public Works (Mr. Fournier) may in the near future distribute new flags to all the public buildings, but before that is done this question will have to be brought up on the floor of this house. The flag is at present the subject of headlines in the newspapers, and of conversation in practically every home in the country. I have been informed that some of my colleagues are in favour of the union jack, while others are in favour of the red ensign; therefore I consider it my duty to express myself plainly. I hope the new flag will not be a borrowed flag but a distinctive flag, in other words a flag of our own. May I borrow the words which have been used by many in the past: A flag is chosen on principles and

facts. If this house does not come to an agreement in due course I shall rise to express myself on the subject.
In conclusion I should like to read the last paragraph of the address delivered by His Excellency the Governor General on his arrival in Canada, and to ask you, Mr. Speaker, and the members of this house to keep it in mind:
Although I have now said farewell to arms, this does not mean rest and relaxation. On the contrary, there is a lot of splendid constructive work to be done, and it will be my aim and privilege to devote 'myself wholeheartedly to the duties of my office which will allow me to watch with sympathy the growing prosperity of the Canadian people who have earned for themselves by their own endeavours the great position they hold in the world to-day.
If everyone keeps that paragraph in mind it will be to the benefit of a greater Canada.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, there is a phrase:	happy are those
who expect nothing because they will not be disappointed. I have a great deal of admiration and respect for the Minister of Finance (Mr. Ilsley). During the six years of war he has had a very heavy task to perform. On the whole I believe he has won the admiration, if not the support, of a great many people in this country. He is one of our native-born citizens of the maritimes, and he became a national figure in that local setting.
In my opinion there is no royal road to the return to happier days, just as there is no royal road to learning; and there is no short cut to peace and prosperity. It has to be earned and worked for and deserved. The bulk of our people, after listening to those who preach a new utopia and a new world to come, I believe expected in this budget some relief from taxation. There was a large number, however, who did not expect it, because they know the ruthless destruction which takes place in every war, and they know that the last war surpassed every war in history in destruction. There was three times the destruction in the last war that there was in the war of 1914-18. So while many people were led to expect a new utopia after this war, I believe it will be a long time coming.
I have a few constructive suggestions to make to the government. Others were made by the hon. member for Muskoka-Ontario (Mr. Maedonnell) the other evening in his address in this debate. We should secure if we possibly can a more modern method of preparing and presenting budgets. The present method is not the fault of the finance minister, because he is simply following the practice of responsible government of the past two hundred years. Under the principle of respon-


II, 1946
[Stage Direction]
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sible government we have to accept the whole budget as it is because if we move to strike out a dollar, and the minister opposes it and it comes to a vote and the government is defeated on that vote, it has to resign. A change is all the more necessary because of the great dislocation brought about by the war. I have always contended in this house that in parliamentary, constitutional, cabinet and law reforms Canada is away behind the times. I should like to see the municipal system adopted in preparing the annual budget. It would involve a change in our constitutional practice, but it would restore to parliament the place which it should rightfully have. We should have federally what is known as the board of control system in the municipal field, under which a national committee of ways and means could reduce any expenditure and strike a balanced budget. I admit that a balanced budget would not be easy in this period of reconversion and demobilization, but I make the suggestion for the consideration of the government. It is unfortunate that after this great war, now over for a year, the people have still to pay high taxes, and the Minister of Finance is budgeting for a deficit of $300,000,000 for this year. In addition we have loans and advances amounting to more than a billion dollars. Our whole economic future is thus mortgaged, and future generations no doubt will have to pay part of the cost of this war. The practice used to be for fifty per cent to be paid out of taxes and fifty per cent charged to capital account. This generation has suffered enough in flesh and blood and it is only right that future generations should pay a part of the cost of this war.
We are also making loans to help rebuild the devastated countries of Europe. There is not much security behind these loans. We found that out after the last war, and the Minister of Finance gave a statement in connection with those loans in an earlier budget.
The budget of last November 8, in Washington, furnishes a pertinent comparison with the budget now before us. The United States budget relieved between 10,000,000 and 12,000,000 persons of paying any income tax whatever. The minimum exemption for taxpayers was raised to $1,000, and the exemption for a dependent rvife or child was raised to $500. The excess profits tax was repealed entirely, and the normal corporation tax reduced slightly. Altogether, the taxation concessions totalled in excess of $6 billion.
I referred at the opening of this parliament in September, 1945, to what business men in this country have had to suffer and their tasks are heavy in this reconversion period, so that Canada may recover quickly. Industry and
labour in Canada have worked wonders in war, and can in peace also. Canada needs stability to speed the delivery of all classes of goods and meet market demands so as to aid peacetime economy in employment, supply civilian needs and restore as soon as possible living standards and defeat inflation and black markets. It should be, with the lessons industry learned in Canada in war, much easier to work out reconversion. All irksome controls must go, and we must remove shackles from industry, large and small.
Private enterprise must have a clear right of way unfettered by a small standing army of inspectors, examiners, supervisors, cardfiling clerks of an outworn, out-of-date system of control, most of whom contributed nothing to the winning of the war. Business must have freedom once again to succeed by free enterprise. We should see an end of government controls by blueprints and a horde of useless officials, many of whom have never had training in any competitive business they seek to control. Demobilization should be speeded for these reasons.
We have recently embarked on a programme of employment. There is no such thing as full employment. There is no use in people promising things like that; it cannot be done. If you consult the health statistics of this country j-ou will find a great many people not fit for work. The reconversion policy of the government has been a flat failure and has never been anything else since it started. I will give the government of Canada credit for one thing, namely, the establishment in the city of Ottawa of a great basic industry knowm as the "ambassador cure for unemployment."
I said last year that the Canadian people are long-suffering, but there is a limit to their patience. That limit has been reached. As a result of mistakes made in the war and in the reconstruction period so far, they are losing their confidence in all governments. They believe that there has been overgovernment and overtaxation in Canada, and they are losing their confidence not only in the administration but in members of parliament as well. They are becoming critical of the work that is being done in the nation's various legislatures. The worst of it is that the public are not really acquainted with the facts in any situation that confronts them. They cannot get the truth and the whole truth concerning any problem that faces the government of Canada. We had a control system in this country throughout the war-we still have it-which has virtually made the work of the House of Commons unnecessary. We might as well have gone
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[Stage Direction]
home and locked up the House of Commons; for in part the nation's affairs in the war have been handed over to boards over the head of parliament, over the law courts of the country, without any public regulation whatsoever. The Minister of Finance is not to blame for that, because he is only one member of the cabinet, but he has had to bear the brunt of the whole thing. It is parliament that is primarily to blame if the facts are not what they should be.
There is no sacrifice that Canadians will not willingly make in this time of peace and reconversion, just as there was no sacrifice during the war which they were unwilling to make. But the people should be given the facts. There is a great deal of waste in Canada to-day.
The Conservative party stands firm on the ground that the state exists for the individual, not the individual for the state; that state interference with the full liberty of the subject is an evil thing per sc, the encroachment of which should be most searchingly scrutinized and resisted; that no government department, except where it enjoys a monopoly, can conduct business at a profit; that the prosperity of the nation rests on the enterprise and ability of individuals in free association to conduct their affairs with a minimum of regulation and interference; that capital and labour are partners-not enemies-indispensable to one another; that bureaucracy is the enemy of both and will ruin them morally and financially if they do not restrict its inordinate increase.
And finally, that what the Conservatives seek is the welfare of the whole community, and no sectional or class advantage. Speaking in this house on September 11, 1945, I said:
Every principle for which the British nation struggled in the old land since the 17th century has Teen surrendered to the political caucuses. Parliament itself, which came into being to ensure that taxes shall be voted only by those [DOT]who have to pay them, has become the institution through which those who do not pay them impose them on others.
I want to emphasize to the committee that powers of legislation older even than the right of taxpayers to determine the national expenditure have been surrendered, and if we are to continue this sort of thing the power of parliament will be gone forever. Whole spheres of activity, involving the livelihood of every man, woman and child in this country, have been removed from the jurisdiction of the law' and of parliament and reserved for the determination of tribunals, irresponsible, irremovable, governed by no control and subject to no appeal
I come from a very large taxpaying city. The working class have to pay a 12 per cent sales tax, and the burden of taxation is very heavy upon them and upon business firms in the district. Some small business men have been put out of business altogether.
(Mr. Church.]
I pointed out that in Washington they are proposing to reduce expenditures along the lines I have indicated. We should call a halt to this kind of thing. The trouble is that we are only holding a post mortem when we come to deal with these estimates. The auditor general's statement is of some importance; I am glad to see that in the last auditor general's report there is some improvement. As I stated in an earlier address in 1945 in this house:
We all know what happens to an individual or to a nation which goes on borrowing and does not keep its finances within bounds. It becomes bankrupt. When you continue to spend more than you make and keep on borrowing money to make up the difference, you know the result. You know, too, that a big chunk out of every dollar a working man earns and spends is used to pay taxes. There is a sales tax on almost everything he buys, so that everyone should look at the way the government is spending our dollars. In my opinion the government should begin now to live within its means. During the war of necessity we spent huge sums of money; yet now, with the war over, the government proposes to spend much more than in any pre-war year. Most thoughtful people believe that government expenditures are now far greater than they need be. They believe that the government, like a family, should live within its means, that it should not spend more than its takes in and that it should not keep going deeper into debt; yet that is exactly what is happening to-day. Our government is spending millions more than it takes in, and it continues to borrow or add taxes to make up the difference. That is the sort of money handling that causes inflation. Economy in government means money in your pocket-book. If the Canadian people will act to reduce government spending and take steps to increase production, inflation will be stopped; and this is the only way in which it can be stopped. I urge this house to cut the cost of government, to eliminate all waste, all unnecessary services and postpone all expenditures that can be put off until our war bills are paid. Mr. Truman has adopted that policy, and I urge the government to start living at a level that we can afford to maintain. We shall soon see the result in the cost of everything we have to buy, food, clothing and everything else.
I think these words are what should be expected.
I notice certain criticisms in the Wall Street Magazine of the Office of Price Administration, to the effect that it would mean the end of Bretton Woods-for which I did not vote, and I am glad I did not. The same source reports the failure of the international money fund and of the world bank through the bringing to the end of the Office of Price Administration. That remains to be seen. But I wish to add this, in general, that I believe something should be done to eliminate all unnecessary expense.
I wish now to refer for a few minutes to the subject of Canadian coal. The existing situation has from time to time caused much

The Budget-Mr. Church
distress across our country, and I predicted during the war and after both wars the prospect of great scarcity of coal and that many industries would have to close. I made my first plea for a Canadian national coal policy as long ago as March 19, 1923. I urged that matters should be so arranged that all our coal would be mined and coked under the British flag, whether in Alberta, the maritimes, or the supply from Wales, and that we should no longer be dependent on the United States, which is running out of coal. The fact is that Canada needs a coal supply from some other source than the United States. The Globe and Mail carried part of this address on Friday, June 21, last. My plea was for a national coal supply, that we -could not expect the country to the south to supply us all the time. It is a fact that charity begins at home, and as I said:
I think the people of the United States will adopt that rule, as far as the coal situation in Canada is concerned, because no country should be expected to send outside its borders the commodity upon which the existence and life of the people depends.
Very little has been done about this matter, and I am sorry that more has not been done about Canadian coal and more in peat and wood, a substitute, and electric power. We should provide for a substitute supply. The coal question is largely one of transportation, and after the next winter it is certain that _	' will have to be done, because I
predict that we shall again have next winter the awful suffering which was experienced in 1917 because of the shortage of coal.
Another matter which is important at this time is concerned with the housing administration. I have had some correspondence with the wartime prices and trade board on this subject. I cannot understand why the government has not been more active about providing housing, urban, suburban and rural. Little or nothing has been done. In the large city I come from several hundred cases of evictions before county judges are pending, and notwithstanding the new Housing Act and the wartime housing provision there has been considerable suffering in Toronto. One of the main things I complain about is that the soldiers who have invested all they had from their grants and gratuities in small homes find now that they cannot get possession. Under the present control system many tenants have no written lease; they are month to month tenants; yet they are allowed to continue in possession and the owner cannot get into bis own house. One man named Anderson in my constituency was arrested, handcuffed and taken to a Pape avenue police station in my
riding. The bailiff evicted him and put him on the street, until along came somebody and took "him in. I claim that control in this matter should end immediately. I protested against the eviction of this soldier; the name of the man evicted was James P. Anderson. A man's house used to be his castle. How long is the property owner to endure this kind of thing? A man puts his savings into his house, and is given to understand he has no control of it. Essentially it becomes the property of the wartime prices and trade board. The war ended over a- year ago, yet this system continues as to an owner recovering his own house to live in, it is causing a great deal of distress in the city of Toronto. I saw the controller of housing about it. We had a good man in charge of housing named Mr. F. W. Nicolls, a valuable man. When I wrote a week or more ago to the new rent controller, Mr. Owen Lobley, of the wartime prices and trade board, Ottawa, complaining about the hardships to owners I got a letter from this new officer stating that he had never heard of anyone by the name of Nicolls in the prices board, although he was for over three years in charge of housing with the wartime prices and trade board.
Such a state of affairs should not continue any longer. We should have an end of the absurd rule that the owner cannot get into his own house. I know of one tenant who goes away down south for three months in the winter time and in the summer time has a cottage in a summer resort district; he is hardly ever in his city house, and from what I hear he makes a large profit out of it, but the wartime prices and trade board do not go around and inspect such places and find out some of the abuses and the profiteering which is going on in real estate, while hundreds of owners, some of them soldiers, cannot get into their own houses. You, Mr. Deputy Speaker, are an ex-mayor and you should know from personal experience that this sort of thing is going on. As I say, it is causing a lot of trouble.
An important question which I think the government should try to answer is, what is the budget going to do to stop the exodus of our best brains to the United States? In the period between the two great wars a return was tabled in this house showing that over a million Canadians had in that time gone to the United States because they could not find employment in their own country. Many of them were soldiers who had fought for this country at the hazard of their lives in the last war. They found it impossible to get work in Canada. The other day, in connection with another subject that was under con-
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[Stage Direction]
sideration in the house, I referred to the exodus of young graduates from the departments of civil engineering in our various -Canadian universities, as well as young men in the medical and other important professions. The Toronto Globe and Mail interviewed a large number of people, including Mr. Cyrus Eaton, a great Canadian from Pugwash, Nova Scotia, to whom the hon. member for Davenport also made reference. This gentleman is chairman of Steep Rock Iron Mines, Limited. Another man who has been referred to in this house is Professor Brebner, the son of one who was well known in Toronto as the efficient registrar of Toronto university. He is now professor of history in Columbia university and is the author of a work dealing with scholarships in Canada. He states that we have not in Canada proper means for research, that young scientists have not conditions that are congenial to them, and have not the opportunities for advancement in Canada that are now offered in the United States universities. This is regrettable after all the money that this country has spent on colleges and universities, and on education, because we have some of the finest institutions in the world in preventive medicine, in many branches of the engineering profession, in chemical, electrical, mining, mineral and other branches of scientific research. Very important work is being done in our Canadian universities, and something should be done by the government to put an end to the present exodus of such really good Canadians.
Another matter I wish to discuss for a moment or two is the food situation in the post-war world. As you know, Mr. Speaker, at the Hot Springs conference resolutions of a revolutionary character were passed by the council of the united nations organization, and advertisements have been published in an endeavour to sustain the faith of small and large business men in the utopia we are supposed to have in the future. All his life the business man in this country has been depending upon free enterprise. Now Mr. Hoover, the food world head, wishes to see established a committee with power to control the production and distribution of the food of the entire world. I would remind hon. members that after the last war there was a commission under Mr. Hoover that was subject to much criticism, and apparently they did not try to do anything efficiently in this direction; and we know about the debates that have taken place on it recently in the United States congress. Now an effort is being made to create some device in connection with the united

nations organization and UNRRA to set up a wTorld authority to discharge the functions proposed by Mr. Hoover.
I do not think people realize that the mother country has suffered more from lack of food than any other country. Now they are rationing bread and flour and many other staple commodities. I hope that mistakes will not be made in this matter of world control such as we had after the last war. Canada should go much farther to aid the motherland in food supplies.
There are many other matters I would like to dis'cuss but I have not the time. Empire preferential trade, however, is something that should receive our attention now that we are discussing the budget. Little is done by us to preserve this trade. There are three or four committees sitting this afternoon with the house now in session, and some have gone home on the four o'clock train for the big parade to-morrow. We are on the eve of a great anniversary, Mr. Speaker, one of two great days-the 17th of March and the 12th of July. The people of Canada owe a great deal to the people of Ulster for the protection which was given our fleet in two world wars in the battle of the Atlantic and for the great leaders that Northern Ireland has produced. I might mention Field Marshal Montgomery, Field Marshal Alexander, Admiral Cunningham, Sir Alan Brooke, Lord Kitchener, Lord Roberts, to name only a few. The late President Roosevelt, as well as Mr. Churchill and General Eisenhower, paid glowing tributes to these great men and to the people of Ulster generally for the part they had played in the war. They saved civilization by the protection which they gave the British fleet at a critical time when it could not use the southern ports as it had done during the last war. I presume that many hon. members have gone home so that they will not forget the parade to-morrow. We may well be proud of the work which northern Ireland did. I was going to ask the hon. member who preceded me in this debate to take part in the parade to-morrow, and I know that the Minister of Finance and his deskmate, the parliamentary assistant (Mr. Mayhew) would be very welcome.
I wish to pay my tribute to what that great country Ulster has done for the preservation of our civilization and the liberty of the world in the two great wars. Lord Macaulay has fittingly referred to the achievement of 1688-90 as a result of the battle fought there. He refers to that fight for equal rights to all and special privileges to none, for freedom of religion, freedom of worship. Ulster stands

The Budget-Mr. Church
for one throne, one flag, one empire, and the principle of confederation, which is a very good one exemplifying the old Cornish battle cry, "Each for all and all for each", with equality of treatment for every citizen of Canada. These are the principles of the Orange association. Lord Macaulay's reference to those great people will be found in the words he spoke after the siege of Londonderry. He said: "The various tombs of captains have been sought, repaired and embellished. It is impossible not to respect the sentiments which manifest themselves in these tokens. They are sentiments which appeal to the higher and the purer part of human nature and add not a little to the strength of states. A people that take no pride in the noble achievements of their remote ancestors will never achieve anything worthy to be remembered."
In that regard, Mr. Speaker, I may say that there is no bigotry in the province of Ontario or the city from which I come, and on the two great days to which I have referred, the 17th of March and the 12th of July, our people should try to forget their differences and aid in a united Canada.
I mentioned the need of empire trade preferences. As Joseph Chamberlain said in 1903, "Empire trade is absolutely essential to our prosperity, and it is more than ever essential now. If that, trade declines our fate will be that of empires and kingdoms of the past," That is the opinion that the great Joseph Chamberlain expressed so many years ago, and it is one that I heartily support to-day. Edmund Burke made this statement in his day:
We ought to elevate our minds to the greatness of that trust to which the order of Providence has called us. By adverting to the dignity of that high calling, our ancestors have turned a savage wilderness into a glorious empire; and have made the most extensive, and the only honourable conquests, not by destroying but by promoting the wealth, number and happiness of the human race.
In my opinion the empire is at the parting of the ways. Without the knowledge of the dominions, the British Prime Minister (Mr. Attlee), declared his intention of removing the British garrison in Egypt and abandoning the Suez canal. He did not ask the dominions anything about it. I would point out that the dominions, India, South Africa, Australia and New Zealand, helped Britain to hold the Mediterranean and marched across the desert with the British army in 1940-42. Consequently I contend that this new method of diplomacy, of consultation without meeting, has been weighed in the balance and found wanting. This Suez canal incident shows it. There should have 63260-212
been an empire conference or a meeting with the dominions. This method of consultation by telegram and telephone and all that sort of thing is entirely wrong. The British Prime Minister said that the dominions had been consulted on May 7, and the next day he rose and contradicted himself and admitted that they had not been consulted, but only told of it and not asked to consent. The defence of Egypt means the defence of the eastern empire. It means the defence of South Africa, Australia, New Zealand, and Canada also, and it involves the Pacific question. In my opinion the politicians have thrown away by such actions as this the mandate that was won for them in the war by the forces of Britain and her dominions. We should know where Canada stands herein. I wish to mention India also, where a commission is out to turn India out of the empire and over to Gandhi. The other day I termed it in this house a most mischievous commission. India is the heart of the British empire. Indian troops, along with New Zealand, Australian and British troops saved India from the axis and the Japanese powers and dynasties in the last war.
With regard to Egypt, the Egyptian army took little or no part in the march across the desert or to preserve the Suez canal with the Australian troops. I cannot understand these two particular errors which have been made by the British government without consulting the dominions. I have noticed remarks in the Australian press. They are protesting most strongly against it, as is also New Zealand. Sir Thomas Blarney is quoted by the Sydney Morning Herald as follows:
If the proposal is carried out to its indicated conclusion its far-reaching effects on empire relationships which cannot at present be fully foreseen, must obviously have a disintegrating effect. We will be entering upon a new phase in empire history because the strategical unity of empire relations is centred on this canal zone. The Egyptian army never took a prominent part in the defence of its own country, but left it almost entirely to the British empire and our allies.
That is right. "Sir Thomas knows what he is talking about", says the National Review. The maintenance of Alexandria as a British base was a factor of safety in the empire lifeline. The same great anxiety was also shown by Mr. Casey, who found it difficult to believe -that the decision to leave Egypt had been a subject of first class consultation with the dominions, while Mr. Menzies, a former prime minister of Australia, now leader of the opposition, spoke with emphasis about the decision, which was made lightly behind our backs on a matter which in the event of another war may make all the difference to Australia
[Stage Direction]
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[Stage Direction]
between national security and national destruction. This statement was made in the Argus on May 9, 1946. These reactions to the news that the imperial government were leaving the Suez canal were reported before it had been made clear that the dominions had never been consulted.
I noticed in the reading room that the Daily Express of May 18 last summed up the situation in the following brief comment: Liquidation	[DOT]
Suez canal-jugular vein of the British empire.
India-heart of the empire. Imperial preference the blood stream of the British empire.
Danger to any one would be grievous to the empire's structure.
There was also the abandonment of British preference. I have been trying to find out what the stand of Canada was, but in vain. These three blows have come from within and not from without our empire, all three were unnecessary, and danger to any one will be fatal to the empire structure of the future.
The empire, I say, is at the parting of the ways. I have mentioned India, where there is a mischievous commission at the present time. I say further that the maintenance of Alexandria as a British base was a safety line for the whole empire, and the action taken was not necessary.
I wish to say a word about the empire parliamentary association, to which this parliament contributed $25,000 last year. For man)'' years it did most useful work, but I am sorry to see that at the meeting at Bermuda the delegates attended too many golf matches, scenic trips, scenic tours, banquets, luncheons and teas, garden parties and all that kind of thing, and failed to carry on their good empire work. It turned itself into a pan-American affair and forgot all about the empire, in my opinion as an old member of the empire parliamentary association, Canadian branch.
We are about to send someone over to the peace conference. As I have said all along, Britain and the dominions will have little or nothing to say in the peace conference if the dominions do not stand together. But for the dominions the mother country would have lost the war. The dominions must hang together or they hang separately, because none of them is able to go it alone.
It is well known that the division of Europe was agreed to at Yalta and Moscow by the big three. They would not allow France in. Mr. Churchill, Mr. Stalin and Mr. Roosevelt were at Yalta, and Mr. Byrnes, Mr. Stalin and Mr. Attlee at Moscow.
(Mr. Church.]
The division of Europe was agreed to at Yalta, Moscow and Paris. It was practically decided there. The biggest mistake of the San Francisco meeting was the granting of veto power to any one of the big three or the big five nations. The veto power simply places all the power under the control of three nations, the senior allies. They were opposed to admitting France. Russia objected to it. France will always be a great nation. She is an ally which Great Britain must have for defence, and Britain will need all she can get to have anything to say over there. Unless the dominions stand together at Paris they will hang separately. I am opposed to any change in the union jack or in appeals to the privy council. The privy council has proved itself to be one court where a litigant gets justice.	.
A few years ago in an external affairs debate I suggested we should have followed the practice of appointing governors general from among some of our great generals. The appointment of Field Marshal Viscount Alexander is a splendid one. I also suggested Field Marshal Montgomery. Field Marshal Alexander and his charming wife have won the admiration, respect, affection and love of the people of Canada in so short a time.
The matter of empire preferences is one of the most important matters that we have to decide at the present time. I am not one of those who believe in what one of our members said concerning Lord Keynes and his work. A recent editorial in the National Review says:
In spite of his excellent brain he was handicapped, for he had no faith in the future of the empire, nor indeed any urge to stand by it. This lack of faith, this pessimism showed all through his life. He did not fight for his country when he was a young man, and when he was older he did not appear to rely on the essential qualities of his countrymen. He could work for them, but he could not believe in their future. This attitude of his did us immense harm in Washington.
I have pointed out all along that we have surrendered too much of our financial, military, social and economic initiative to Washington. And that was done in connection with the matter I am speaking about, imperial preferences and Bretton Woods. "Many Americans felt that they need not consider the empire when England's principal negotiator disbelieved it," says the National Review. It continues :
Added to this, he was accompanied to Washington by a crowd of superior young men, economists, professors and others who made an indelible and deplorable impression upon all who saw them and heard their haughty and highbrow voices. We make a great mistake when we send such representatives abroad. We cannot make ourselves popular in the United

The Budget-Mr. Archibald
States; there is too deep a prejudice there against us, but the sort of people we sent to the United States to discuss the loan would be disliked anywhere and were fatal in America.
There is a lot of wisdom in the National Review. I am sorry to see the remarks which have been made about the British loan over there by some people, but you have to expect some of that, because there are some people there in congress and the press who do not believe in the mother country and were always opposed to it.
If the peace conference is to be a success it will have to be an improvement on the last one. Our delegates who go to Paris will find that they will have very little to say when they gather with the group of twenty-one nations. We must remember what has been happening at the meeting in Paris. They have been meeting for several months. An article in a British paper says:
Mr. Bevin and Mr. Byrnes have been meeting with the delegates from Russia and France. There have been announcements in the press, and secret meetings were held, but everything has been a failure. There was no agreement. The British, French and United States delegates have learned that Russia does not intend to play any of their games. It has been a sort of educational process. But there must be a better way of managing it.
So far as diplomacy is concerned, I think it would have been much better if we did not have the present style of open diplomacy; the old style by experts was far better. Mr. Eden referred to it in a speech he made recently in another room in this building. At the time of writing of these articles no less than six British cabinet ministers were going around the world causing disunity. I can only say that Canada is bound to weather the storm; so will Britain and the empire if we hold together, but I hope nothing will be done at the coming peace conference to affect the empire relationships we have enjoyed with the mother country in the past.
During this budget debate reference has been made to colonial days. Such phrases are a relic of thirty years ago, because there is no colonialism today in Canada. As Sir John A. Macdonald said, we are a completely independent country, and we shall be a unit with the mother country forever. They talk about British imperialism, but next to the Christian church no agency has done more than the British empire for the world, for Christianity, freedom and liberty. Long may that empire continue. Compare that with Russian imperialism, and United States imperialism. They may not have had imperialistic ideas when they came into the war; they may not have wanted to grab territory; but Russia does now and they are both imperial now in the sense that 63260-2121
they want to have a larger say in the peace terms and in the new world to come and more territory. Perhaps you cannot blame the United States; they are a faithful ally and stood with us in two wars; but Russia is not playing the game. I am not one of those who believe there will be another war with Russia, at least not for another fifteen or twenty years, but I do believe we should have a different kind of diplomacy on foreign affairs in which Canada should play a part. After all is said and done, when we go to the peace conference we shall be only one of twenty-one smaller nations, and we shall find that the other big three or big five will keep us out in the hall while the big five decide what is to be done. Then, if they do let us in, one of the five can veto whatever we suggest. So I do not see that we will gain a great deal by attending that conference. The peace terms have all been decided in London, Yalta, Moscow and Paris by the big three; Russia has been given a great deal of territory in the Balkans, where she is introducing a new form of communism which is to be the communism of Europe. Unless we and the other dominions stand by the mother country we shall have little or nothing to say about the peace terms.
Mr. DEPUTY SPEAKER; Order. I must inform the hon. gentleman that his time has expired.
Thomas Langton Church: I shall conclude in just a moment. But for the mother country and the other dominions we might have had the awful horrors of War on our own soil, right here in Ontario, Quebec, and the maritimes, with the concentration camps, the loud speakers, the whip, the tramping of feet, the gestapo police, and with tens of thousands of our population carried off to do forced labour in the German mines. Let us pay tribute where tribute is due for this.


Mr. H. G. ARCHIBALD (Skeena):: Mr. Speaker, this budget has been brought down and I believe it is a great disappointment to the people of Canada, in view of the hopes they built up during the war. They thought we were coming at least into the beginning of a new order of society. In its wisdom, however, the government seems to be going back to the old cry of seeking normalcy, whatever that may be. In all my lifetime I have never experienced it. The hon. member for Mus-koka-Ontario (Mr. Macdonnell) took us back to the seventeenth and eighteenth centuries and spoke of that as a time of opportunity, when people left the old country and came here to seek their fortunes. The blood I come from did not come to this country under those conditions. Their homes were burned around
The Budget-Mr. Archibald

their ears and they were kicked out on their own. Some were brought here through the charity of one individual, Lord Selkirk, and when they got here they had to start the fight all over again with the Hudson's Bay company and the Northwest Trading company. That fight is continuing now, on a higher plane.
I should like to quote what Chester Bowles has to say about normalcy, in an article which appeared in Harper's magazine for April, 1946:
Full production, Bowles continues, is the only answer. "To achieve it we've got to use our man-power and our resources in peace time as fully as we used them in war. At 1945 levels of iarm and factory prices and at present wage levels, that means $150,000,000,000 worth of purchasing power-and $150,000,000,000 worth of bathtubs, beefsteaks, refrigerators, and decent schools to spend it on. At that level America would buy 60 per cent more food than we ate in 1940, 72 per cent more clothing, 68 per cent more electrical equipment, 105 per cent more household furniture, 130 per cent more new farm machinery, and three times the number of new homes!"
The fact of the matter is that according to the tables in the budget the physical volume of business is down eighteen per cent or more. In other words, the government had it within its power, when the war finished, to continue organizing society and producing goods for the shortage which was bound to come. We solved the needs of war by organizing through the state, and the needs of peace are just as great; in fact the dangers that face our society and our country may be even greater than they were during the war; who knows? The Prime Minister (Mr. Mackenzie King) came back from Europe and pointed to the danger of revolution over there. If revolution breaks out in one spot it soon spreads all over the world, and we might be faced with that problem. At least we would be affected by it; and unless we solve the problems of production right here on the home front we shall certainly be faced with some disaster or another. After the first great war the government of the day in Great Britain repealed DORA, the defence of the realm act, and threw industry back into the hands of private individuals. By 1926 the great general strike had broken out and machine guns were on the corners of strategic buildings.
By not accepting its responsibilities and producing in and through the state, the government is actually bringing about a state of social disorder in this country. It is not the fault of labour; it is because the government has refused to accept its responsibility of organizing production, especially to deal with the scarcer items in the basic part of the economy. Therefore the government nas sponsored inflation. I heard the appeal made here by the Minister of Labour (Mr. Mitchell) 
to labour, asking them not to strike and saying that production was the main thing. Yes; production is the main thing; but when the government throws the basic part of the organization into disorder so that it cannot be done, you cannot blame labour. On the other hand, during the war people bought bonds with the idea that later they could purchase at least as much as their money was worth during the war. Yet prices have been allowed to go up, because the government was not producing. In other words, it has not kept faith with the people who were asked and begged to buy bonds.
When we appeal to labour to produce, what is labour facing and what does it know? It knows that if it goes to work to-day it is working itself out of a job to-morrow. We have inflation with us at the moment, but we face deflation in the immediate future. I have a quotation here from Time magazine of June 24 of this year, under the heading, "Business and Finance":
Last week Mr. M. E. Coyle, new G.M. executive vice-president, seemed to be voicing the anxiety of all industry, not merely of auto manufacturers, when he said: "We will catch up with the pent-up demand more quickly than many think."
_ Further on, dealing with the rise in prices in the United States, it says:
No one doubted that prices would go up- certainly for a w'hile. The guesses ranged from 20 per cent to 50 per cent. Businessmen figured that full production in all industry would be reached by next January, and that the end of the seller's market would come in the spring.
These are from reliable sources. When a seller's market ends and a buyer's market begins, it means unemployment. The worker knows there is no incentive to produce. Under this system it is only when profits are being made that he goes to work.
There is another feature in this budget. The taxation of lower incomes is definitely unfair, especially in view of the fact that we face deflation in the immediate future. A national survey of liquid assets was made in the United States by the bureau of agricultural economics. It was found that there was no reserve of purchasing power in the hands of forty per cent of the people in the United States. What reserves did exist were in the hands of the upper sixty per cent. It was found that that upper sixty per cent were not willing to pay more than $5,020 for a home, and this is in a country where inflation is supposed to be going on wild-eyed. But here in this country, under the veterans department, we are building homes worth anywhere from $5,000 to $7,000. Yet people

The Budget-Mr. Archibald
with capital in the United States do not feel that they can afford to pay on the average more than $5,020.
When lower incomes are taxed too heavily, when you levy heavy taxes on them you are not giving the people a breathing spell to prepare to meet the deflation which they are definitely going to have to face in the future. After the war, the government gave some hope to the ranks of the people when they came out with the dominion-provincial conference. Many good things were advocated at that conference by the federal government. There was social legislation proposed and the government was going to enter upon the building of public works on a major scale. I should like to quote from page 25 of the proposals of the government of Canada as follows:
In its own investment policy it is proposed that the dominion adopt practices which are consistent with and which supplement its total employment programme. Unemployment in Canada in the past has been associated with an abnormally low volume of exports, of which the effects are felt in the whole economy, and with a low volume of private domestic investment. It is proposed that investment policy be used to mitigate or offset deficiencies in export income or private investment expenditure according to the principles of
(a)	using public investment programmes to strike as near the source of deficiency as possible; and
(b)	providing expenditures through established channels in which the deficiencies of income and investment are most severely felt.
In many parts of this country that programme is an absolute necessity and yet the government has dropped it. We are going to have to face a period of deflation and no plans are being made to face the issue. In other words, the government is willing to let the country drift from crisis to crisis and we shall once again have strikes, riots and so on, on our streets. When you begin to appeal after they are out on the street it is too late. If that programme had been implemented it would have saved a great deal of suffering in this country.
I should like to deal now with what could have been implemented in the case of my own riding and how it affects us. Take the case of assistance by way of providing new access roads to undeveloped mining and forest resources. In my part of the country there is the largest stand of timber in British Columbia, but there are few roads over which to get into it. There is also a large coal field in that part of the country containing coal which compares favourably with Pennsylvania coal. The area of that field is seven times the area of the Pennsylvania field. Yet we are suffering from a shortage of coal and a shortage of
lumber. Surely those provinces, that would be willing to cooperate with the government under the scheme advanced by the dominion should be given the benefits that were advocated at that time. Instead of that, the government is standing by and letting things build up to a crisis.
I realize that the government is working on the principle of free enterprise to the extent that it is possible, and that is what is crippling the development of this country to-day and hindering high production. Certain events that have occurred in recent times point out the necessity of government intervention in private enterprise. For example, there is the necessity of some form of government interference in the production and distribution of lumber and coal. In fact the coal situation is so critical that the people of Canada are apt to suffer in spite of the fact that there are large undeveloped coal deposits in this country, and in spite of the fact that there are also many unemployed. Not so long ago the Bulkley collieries had to turn down an order for export shipment of 8,000 tons of coal from its mine in the Telkwa district owing to the lack of storage and loading facilities in the port of Prince Rupert.
Negotiations have been under way for the shipment of Bulkley valley coal amounting to an estimated 100,000 tons annually, and inquiries have been made for a still further 100,000 tons, but none of this can be handled until adequate storing and loading facilities have been established in the port of Prince Rupert. Bulkley valley collieries have 500,000 tons proved by diamond drilling, with 250,000 tons opened up in the present workings. There is an estimated 30,000,000 tons in the immediate area, according to Doctor MacKay of the geological survey.
We have been and are going through periods of critical shortage, and the uncertainty of the times points out the fact that we shall be facing further crises in the future. If the government is going to adapt itself to the times we live in it will have to take a lead in actively sponsoring the development of such natural resources as the coal fields around Telkwa, without even mentioning the fact that the Groundhog region should be opened up and ready in case of a national emergency.
We know what we faced during the war. At that time we faced critical shortages. We now have an opportunity of developing and opening up areas so that nothing in the line of such shortages would ever again face this country. The test of whether government as we have it to-day is going to survive will be measured by its ability to meet the day-to-
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Mr. Archibald


Hon. LIONEL CHEVRIER (Minister of Transport):: Mr. Speaker, the hon. gentleman who has preceded me (Mr. Archibald) will pardon me if I do not follow him in the remarks he has just made. I had no intention of taking part in this debate this afternoon but I have been prompted to do so by the remarks made the other evening by the hon. member for Cape Breton South (Mr. Gillis). In his speech he made certain statements and levelled certain charges to which I believe it is my duty to reply. The charges had to do with the national harbours board. In order that I may not in any way misquote the hon. member I will read what he said as reported in Hansard of July 9, at page 3292:
I want the Minister of Finance or the responsible minister to give us a statement as to whether the minister of industries in the Nova Scotia government made that charge and can substantiate it or otherwise. The reason I want that done is that if the milling interests of central Canada blocked the Nova Scotia government from establishing a million-dollar industry in that province they did a serious disservice to that province.
Prior to that, the hon. member had quoted from an editorial in the Halifax Herald, which stated:
During the session of the Nova Scotia legislature recently prorogued, the minister of industry levelled a direct and serious charge against the national harbours board. He charged that "the milling interests of central Canada blocked the Nova Scotia government's plans to erect a million-dollar flour mill at the ocean terminals in Halifax."
Of course it is not my purpose in rising to defend or attack the milling interests of central Canada. That is no concern of mine. But I am particularly concerned with the other part of the statement which was quoted by the hon. gentleman, who again was reading from the Halifax Herald'.
Before a house committee the minister declared that-
He is referring here to the minister of industry and publicity of the Nova Scotia government.
". . . he was entirely satisfied that the decision of the national harbours board to refuse the government permission to use pier 23 for the mill 'was dictated by the milling interests of this country'."
That is the charge with which I am concerned. I am not in a position to say whether the minister of industry and publicity in the Nova Scotia government made that statement; all I have to go upon is the editorial which I have seen; and I say now without equivocation that any policy followed by the national harbours board was not dictated by the milling interests of central Canada, nor was that policy affected either directly or
The Budget-Mr. Chevrier

indirectly by the milling interests. I think I can safely add that no flour mill in central Canada, no big interests or no cartels had anything to do with the determination of the policy followed by the national harbours board in that or in any other instance. I need only tell the house who the members of the national harbours board are, and I think they will agree immediately that the case is as I put it. The house knows that the chairman of the national harbours board is Mr. It. K. Smith, a former member of this house, a man who is particularly well known to Nova Scotia members, and I think the house will agree with me when I say that either directly or indirectly that individual certainly has no connection with the milling interests of this country, or with big business, or with any cartel. The vice-chairman of the national harbours board is Mr. J. E. St. Laurent, a former officer of the Department of Public Works, a former chief engineer of the St. Lawrence ship channel, and also a man who has no connection, direct or indirect, with the milling interests. I think I can safely say the same about Mr. B. J. Roberts, a trusted employee for a while of the Department of Finance and a man who is a watchdog of the treasury so far as the national harbours board is concerned. So that I say to this house without equivocation that that charge is totally unwarranted and is totally unfounded.
Let me now deal if I may for a moment with the facts which led to the decision of the board, and I think the house will want to know what these facts are.
Some time in 1941 the then premier of Nova Scotia made representations to my predecessor, Hon. J. E. Michaud, with reference to the erection of a flour mill at pier 23 in the harbour of Halifax. The premier of Nova Scotia stated that his government had been in conference with an Ontario flour mill and he was endeavouring to make arrangements for the construction of a flour mill at tidewater, Halifax, to supply mill feed. It was indicated in that letter that there was imported annually into Nova Scotia some 100,000 tons of mill feed and some 300,000 tons for the whole of the maritime provinces. It was further indicated that with the erection of a flour mill this market could be supplied and an important saving effected. It was also stated that grain could be brought from Churchill to Halifax at low cost, processed in the proposed flour mill, and used to supply markets not only in the maritimes but also in Newfoundland and the West Indies. The letter went on to state that arrangements were being made for the

construction and management of the proposed mill, and the site selected was pier 23 in the Halifax harbour. It was also suggested that the pier should be leased to the government or to the company which would set up the flour mill at a nominal rental. The letter went on to say that because of the storage elevator which was in close proximity to pier 23 it was the intention to use this elevator as an overflow storage reservoir.
Nothing came of the application, if I may so call it, made in the letter from the Premier of Nova Scotia in 1941, for the reason that the milling company found it difficult, so I understand, to obtain milling machinery from the British isles, and the matter was allowed to stand over for the time being.
The proposal was again brought forward in 1945, and at this time this additional information was submitted to the national harbours board. Again it was stated that the proposed mill was to have a daily capacity of 1,800 barrels, and that it was to be erected on pier 23 in two units, and it was suggested that a lease of the pier and of the elevator facilities be granted at a nominal rental. The capital cost of the mill was to be SI,000,000. The mill was to be operated by a company to be known as the Atlantic Flour Mills Limited and to be managed by one R. J. Pinchin. A bank loan of SI,000,000 was to be guaranteed by the government of Nova Scotia, and in the event of the non-success of the venture the government of Nova Scotia was to be responsible for all capital costs.
In order to show that the national harbours board did everything which could be reasonably expected of it, I want to state that meetings were held following this correspondence between, the premier of Nova Scotia, his minister of industry and publicity, and the national harbours board, both at Ottawa and at Halifax, and much correspondence passed between the board and the Nova Scotia government. The board's position, after it had carefully considered everything, was made known to the government of Nova Scotia in a letter which my predecessor, Hon. J. E. Michaud, wrote to the then premier of Nova Scotia. I should like to read this letter, because it places on record the position of the national harbours board, and I think every member of this house who wants to view this matter reasonably can come to no other conclusion than that it was the only decision which could be arrived at, at the time. I quote the letter of March 16, 1945, addressed to the premier of Nova Scotia. Dear Mr. MacMillan:
With respect to the application of your government for a location on pier 23. Halifax harbour, to establish a flour mill in dose proximity

The Budget-Mr. Chevrier
to and connected with our grain elevator facilities, and the use of the grain elevator in Halifax in the rear of said pier as an overflow storage house, said mill to be operated by the Atlantic Flour Mills Limited under the presidency and general managership of Mr. K. J. Pinchin of the Copeland Flour Mills, Midland, Ontario, my colleague, the Hon. Mr. Ilsley, has again brought your application to my attention urging immediate consideration by the government of your request for terms.
The national harbours board, I understand, indicated to you previously that they would not be justified in recommending the leasing of existing harbour-front transit facilities for anything other than transit purposes and, in answer to your request for an alternative site in the rear of pier 23, after investigation by the board's engineers, they considered there was not area enough there to contain the flour mill and enable the board and the flour mill company to have sufficient extra space required for their respective operations.
A meeting was called by the lion. Mr. Ilsley in his office last week to give further consideration to your application. A thorough discussion took place developing various phases of your application and its implications, if granted, which application I may say has caused no little concern to the authorities here because of the rather unusual request which, if granted, will immobilize a pier and shed built in 1918, at a cost of approximately $1,000,000, as a foundation upon which to construct a flour mill, and the further disadvantage of immobilizing partially during the summer season and totally at least during part of the winter season, an elevator costing roughly $2,250,000.
In answer to your inqury for terms to lease pier 23 and the grain elevator storage space required, the meeting in Mr. Ilsley's office came to the following conclusions:
1.	That the government would not be justified in leasing the pier and elevator on the basis of a nominal rental;
2.	That the rental, in answer to your inquiry for terms, should be based on the relationship of the capital invested, together with the potential earnings of the pier in question; _
3.	That the national harbours board is willing to instruct its engineering staff to _ investigate at once the question of an alternative location in Halifax harbour on property administered by the board but not occupied by transit facilities;
4.	That in no circumstances if an agreement is reached on (21 could the government allow construction on pier 23 or any other operations or undertakings connected therewith which would interfere in any way with the mobility of transit business across the pier until, not only the end of the German-Japanese war. but, running into the post-war period, a sufficient time to satisfy the authorities that the facility would no longer be required for accelerated after-war business.
When you have considered these various points. I sincerely trust you will write me as we are all anxious to assist in whatever reasonable way we can the policy of your government to establish a flour mill in Nova Scotia.
The members of the national harbours board are expecting to be in Halifax on Tuesday and Wednesday of next week, the 20th and 21st instant, and I asked them to contact you or the Hon. Mr. Connolly, Minister of Industry and Publicity in this connection.
Yours very truly,
J. E. Michaud.
That letter set out clearly the position of the national harbo-urs board, and since it was written the board met the premier of Nova Scotia and his cabinet, had a thorough discussion with them, and thereafter agreed to send one of the senior engineers to Port Arthur to discuss alternative sites on the board's property in Halifax, with the persons who were to manage the proposed flour mill. Later, engineers were sent by the board to Halifax to make a complete survey in order to ascertain whether other space was not available on the harbour property. The engineers made a survey and reported that there was such a site inshore to the south of the cold storage plant which could be made available. The board was told that that site was not satisfactory and that it was pier 23 or nothing at all.
That, Mr. Speaker, is the position so far as the establishment of the flour mill is concerned, and I say this to the house. It is not the business or the duty of the national harbours board to immobilize its transit facilities by making them available either to private corporations or to other bodies. It is its business to assist private corporations, governments and other bodies in any way it can, and I say that it has done so. To have asked the board to immobilize a transit facility such as pier 23 and to use that as a foundation upon, which to build a flour mill, at no cost or at nominal cost, is, I think, going beyond the jurisdiction for which the board was established.
The house knows there is a National Harbours Act by virtue of which parliament gave the national harbours board certain powers, duties and obligations, and parliament certainly did not give to the board the obligation or the power to do what was asked here. At any rate, it would appear quite clear that if the industry itself cannot support a costly site of this nature it should not be the function of the national harbours authority to provide it on more favourable terms than to any other interest requiring harbour property. Even if reasonable financial arrangements had been proposed, the board could not at that time justify any recommendation to reduce shipping facilities in Halifax. The board was then inclined to doubt that it was the proper body to receive or entertain proposals on such a basis, however desirable the project may be in relation to the province's objective. It appeared to the board that it is only within its field when it recommends granting the use of facilities under its administration on terms and for purposes that appear to be warranted, having regard to the interests of harbour operations.
The Budget-Mr. Chewier

Similar requests, applications and' proposals come from other interests in other parts of Canada, and it has been the policy of the board to do in these instances exactly as it has done in this. I do not wish to take up unduly the time of the house but I feel that I should at least make the statement that the charge quoted in the editorial by the hon. member for Cape Breton South (Mr. Gillis) is entirely unwarranted and unfounded.
While I am on my feet there is one other thing indirectly connected with this which I should like to say, and it is this. From time to time the national harbours board is attacked because of the fact that it does not consent to what local interests ask or does not grant the demands of local interests. At the moment I am not referring to Halifax any more than I am to any other port or harbour which comes under the jurisdiction of the national harbours board. In these instances the board is in the peculiar position that it cannot reply to the accusations. It is an emanation of the crown and it has not been in the habit, nor has it adopted the custom, of replying to all the charges made against it in the press.
May I say here that the national harbours board has done an excellent job in the matter of administration of harbours in this country, particularly having regard to the condition of things as taken over by the national harbours ooard, when it was incorporated by act of parliament. The house knows what conditions were like in those days. It knows that the report of Sir Alexander Gibb dealt with the most unsatisfactory condition that existed in a number of harbours across Canada. The board took over that condition, and the financial position of the harbours in Canada to-day is far better than it was at that time.
When the national harbours board took over the port of Halifax in 1935 the operating re'venues were $500,936, the operating expenses were $504,851 and the operating deficit $3,915. In 1945, because of the policies of the board, the operating revenues were $1,653,000 the operating expenses $1,033,000, showing a surplus of $819,797. The statement I make is in reference to the harbour of Halifax. It goes to show that the position of Halifax harbour in 1945 is far better than it was when the board took over. The same can be said of all other units under the jurisdiction of the national harbours board. In 1935, these units showed operating revenues of $7,427,000, and operating expenses of $4,975,000, leaving an operating surplus of $2,451,000. In 1945 the operating revenues of all units under the jurisdiction of the harbours board amounted to $13,395,000, and operating expenses $6,851,000, leaving an operating surplus of

$6,554,000. In my judgment this is a proud record, and anybody who studies the figures, if impartial, will, I feel sure, agree with this.
The national harbours board are criticized and blamed for leaving undone things which they are not authorized to do under the National Harbours Board Act. They derive their authority from that act, and certainly it is not authorized in any sense to turn harbour facilities placed under the board for administration as a harbour facility, to other parties to be used as a foundation for a flour mill.
I think it my duty to tell the house that the decision of the harbours board to act as it did was in accordance with the terms under which it was set up by parliament; that the decision to which it came was the only decision to which it could come under the circumstances; that the matter was given careful consideration not only by the Department of Transport but also by other departments of government, and that even to-day the national harbours board stands ready and willing to facilitate the establishment of that mill.


Clarence Gillis: Would the minister answer a question? In the minister's statement there was one error which I should like to correct. This matter was not raised by an editorial; the editorial merely quoted the minister of industries of the Nova Scotia government. He raised the question. The minister said that there was an alternative site available in Halifax, but someone said that it was not suitable. What reasons were given as to why the site which was available was not suitable? What was the matter with the site?


Lionel Chevrier: All I can tell the hon. gentleman is that our engineers went there, made a survey and suggested an alternative site. I am informed the reasons were that the site was not close enough to the pier, and that the milling industries wanted the use of pier 23, or pier 26, which was immediately opposite. It was either the one or the other. The engineer who made the report-and he is one of the outstanding engineers on the staff of the national harbours board-reported that there was an alternative site and that that site was not found satisfactory by the milling industry.


Percy Chapman Black: As I understand the statement of the minister, there is no expectation-


James Horace King: I am sorry, but I will not permit a debate on this question.


Percy Chapman Black: I should like to clarify a statement made by the minister.

The Budget-Mr. Fraser
I should like to know if there is any expectation that this mill will be erected. Five years or more have passed since these proposals were put forward by the provincial government, and the same question was before the minister. I should like to know if there is any expectation-


James Horace King: Order.


Percy Chapman Black: -that this flour and feed mill will be erected?


James Horace King: I am sorry to interrupt the hon. member, but we are not in committee. I cannot permit a debate on this question.


Percy Chapman Black: I believe the minister is prepared to make some reply.


Mr. G. K. FRASER (Peterborough West):: On May 25 I made a broadcast from parliament hill over the radio, and I should like to read just a few lines from what I had to say, because it deals with the budget. 1 said:
It is expected that the budget will be brought down in the House of Commons by the Minister of Finance within the next two weeks. Personally, wliat I feel the Minister of Finance will do is to bring down two budgets. One budget, he will say, would have come into effect if the dominion provincial conference had come to an agreement, this budget will show a lowering of the income tax. The other budget that will be brought down will be the one that will go into effect, showing no decrease in the income tax.
The reason I said that there will be no decrease in the income tax, despite the fact that the Minister of Finance (Mr. Ilsley), other cabinet ministers and members of the Liberal party during the 1945 election and since, had said that there would be a lowering of the income tax was that we as members of parliament could see no practical effort on the part of the government to cut down waste and extravagance. In fact one does not have to be a member of parliament to see that. The ordinary citizen on the street knows it exists and he is up in arms about it. I feel, and I know th.e citizens of Canada feel, that every cabinet minister should house-clean his own department. In fact some of them need fumigation. There are sinkholes into which the taxpayers' money is going, sinkholes which the cabinet ministers know exist and where extravagance and waste predominate. Unless these holes are blocked up at once, there is very little chance of the taxpayers of Canada having any relief at all, even in 1947, despite what the budget says.
I mentioned the dominion-provincial conference in my broadcast of May 25. I feel that it was a real good excuse for the government not to bring down any deductions in income tax. To a number of people it looked as if they did not want to have an agreement, but that they wanted to have something on which to blame the lack of reductions, instead of putting the blame right on the lap of the government where it belongs. The government created this position and it is up to them to eliminate it. It never should have started in the first place.
The budget does not offer the people of Canada any encouragement at all. The veterans of the war have not had a chance, although before the 1945 election rosy pictures were painted of Canada as a land of milk and honey after the war. On his return to Canada the veteran has not found that to be so. There is no doubt that the veterans affairs department has done a number of things for the veteran, but it has not found houses for veterans. I noticed in the Montreal Sinr nf Tpct-pvUm- p** ffl- dr." Uofp-p nern
war Drides were returning to England because they could not stand conditions here in Canada where they had to live in one room and in many cases without bathroom and other facilities. This government has given very little direction to the veterans. In some cases it has given a little direction and in other cases a great deal of misdirection. The worker in industry does not know what comes next. The farmer on the land does not know what the future holds, and industiy does not know what is to be the next move of the government and therefore cannot plan for the future. In fact the government is strangling industry, and many other speakers during this debate have said the same thing.


Mr. GLADSTONE:: Then you think Canada is a desperately bad country?


Gordon Knapman Fraser: Under the present government, yes.


Mr. MACKENZIE:: Oh, you do not mean that.	.


Gordon Knapman Fraser: I certainly do mean that. This government has given no leadership at all. If it had shown proper business management we would have had tax reductions. If proper forethought had been shown by the members of the cabinet-and I am looking at them right now-the veteran would have had a better chance for a home. Back in the budget debate of 1941, in answer to a question of mine, the Minister of Finance said he wanted to discourage the building of homes.


Mr. ILSLEY:: Yes, then.


Gordon Knapman Fraser: That was in 1941. I told the minister there were four, five or more
The Budget-Air. Fraser

families living in one house, but he wanted to discourage the building of houses. We had a chance to build then, but certainly we have no chance now.


Douglas Charles Abbott: By reducing our war effort in some other way.


Gordon Knapman Fraser: 
Mr. MAYHEW:: Does the hon. member know that this programme has been discontinued?


Gordon Graydon: It is about time.


Gordon Knapman Fraser: That is just an example; and it would not have been discontinued but for the fact that I placed questions on the order paper to find out what it cost.


Robert Wellington Mayhew: It was discontinued at the end of the contract, and would have been discontinued whether or not the hon. member had asked questions.


Gordon Knapman Fraser: I doubt that. It never should have commenced; and how many more broadcasts like that there may be, we do not know. We have to dig up the information by putting questions on the order paper. Even the war expenditures committee can get only half truths; they cannot get it all. We have to dig and dig to find out what is doing; then we have to put it before the people of Canada, who force the government to close down on

these extravagances. I have another article on the same broadcast, but since it has been discontinued-which I am extremely glad to hear-I shall read only the heading from the Brockville Recorder: "Throw 'George's Wife' into the river."
Another waste of the taxpayer's money is the film board, which was organized in 1939 by this government. It has expanded until now it has become even larger than what might be called a white elephant. It has 748 employees, doing what? They are supposed to be making films, making water colours, making oil paintings, making stills, designing folders, writing literature and so on, all for the Liberal party, because practically everything they put out has a political twist to it. A great deal of the material they complete is scrapped. At two o'clock the other morning, while waiting for the train to come to Ottawa, I was talking to some servicemen about entertainment for the troops. They were speaking of films. One said his outfit rented films from a commercial concern, whose name I need not mention, and said they cost so much a week. The other said his outfit rented from the same company, but that they had tried the national film board for films. I am going to tell you what he said about those films. His remark was, "The men don't like them. They call them stinkers." Some of the films produced by the board are all right, for educational purposes only.


Mr. CRUICKSHANK:: Those are about the Liberals.


Gordon Knapman Fraser: Well, I am very liberal in my comment when I say some of them are all right; perhaps I should not have said that. This film board, with 748 employees, is using the money of the taxpayers. In opening my remarks I said some departments need to be fumigated, and certainly this is one. A few weeks ago in. the committee on external affairs I said that in the film board the hat was passed around in order to obtain funds for the benefit of those accused of espionage. That statement was absolutely correct. I know money was collected there; despite what may be said by any official of that department. I know who collected the money. At the same time I had on the order paper a question in regard to a certain man, and asking if there were any known communists in the board. I am glad to say that since I placed that question on the order paper one man has been fired. There are many more who should be dealt with in the same way.
At six o'clock the house took recess.

The Budget-Mr. Fraser
After Recess
The house resumed at eight o'clock.


Gordon Knapman Fraser: Mr. Speaker, just before six o'clock recess I was talking about government extravagance and waste in the departments. I said that every cabinet minister should house-clean his department. I mentioned a number of departments and I shall give a few more examples of waste. War Assets Corporation is one outfit which I think should have a house-cleaning. Yesterday the hon. member for Lake Centre (Mr. Diefen-baker) mentioned that War Assets Corporation had 5,053 employees during the month of February, whose wages and salaries amounted to $723,600. This is July, just four months later, and I understand that now War Assets Corporation have over 7,000 employees. I have no chance of knowing what the total salaries and wages would be, but if we take the basis of 5,053 employees receiving $723,600 in salaries and wages the payroll to-day would be $1,100,000 or more.
On July 3 I wrote a letter to the Toronto regional office of War Assets Corporation. This is July 11 and I have no answer. I do not know what the office staff there is doing- it may be out looking for more employees- but I know I am only one of many who have written to War Assets Corporation and have not received an answer. You get the same word from all over the country. Many people in my riding tell me that it is useless to write to War Assets Corporation. One would think that with over 7,000 employees he would get an answer some time.
Some time ago I was told by the members of the board of education in one of the large cities in Canada that they had written War Assets Corporation asking for some equipment for their schools to replace equipment that had been used during the war for vocational training. Eventually they got an answer telling them to go to a certain factory which had a nine- or ten-inch lathe-I forget the exact size-which they could have. They went to this plant the next day and told the manager that they had a letter from War Assets Corporation in regard to this lathe and had come to look at it. The manager just laughed and said, "That lathe was sold for scrap over a week ago." The same board of education had a similar experience about six months later. They went to another plant at the request of War Assets Corporation and found that the piece of equipment they were interested in had also been sold for scrap.
The Canadian information service is another outfit that should have a house-cleaning.
This outfit, along with the wartime information board, did more during the last few years to create a paper shortage than all the newspapers and publications across Canada. According to information given in the external affairs department standing committee 800,000 copies were published of one leaflet, a copy of which I hold in my hand.
This is entitled "World or war?" On the inside pages at the top is, "United nations organization". There are a number of illustrations. The first one, entitled, "Settle disputes", shows a policeman running with a baton in his hand trying to club somebody over the head. The next one is entitled "Suppress aggression", and it shows an iron heel stepping on a snake. The next one is entitled, "Develop friendly relations among nations", and it shows what is supposed to be a man with his arms around two others. No. 4 is entitled "Promote social Droeress". and this shows what looks like a schoolteacher teaching a class. No. 5 is entitled, "Solve international economic problems", and it shows a man without a face holding up the world. No. 6 is entitled, "Encourage respect for human rights", and it shows what looks like two men leading a drunk along the street. No. 7 is entitled, "Establish fundamental freedoms", and it shows what looks like a building at the top of a hill with a few men climbing up to the top.
Eight hundred thousand copies of that leaflet were turned out and distributed and that is only one of hundreds of different folders that those people put out. What the wartime information board costs to run per month I do not know, but for the months of October, November and December, 1945, the cost in salaries and wages alone for the Canadian information service was $66,371.54. Your guess is as good as mine as to what it cost for paper, printing and the editing of these publications. I have a list of the publications which I can read, but with your permission, sir, I should like to place it on Hansard. It is as follows:
1. Publications issued by Wartime Information Board and Canadian Information Service during 1945:
Daily-
Airmail Bulletin Weekly-
Facts and Figures Faits et chiffres Features for Dailies Pour la page Feminine Field Reports Home Front Bulletin Radio Service Communique de la Radio Weekly Press Service Communique hebdomadaire Weekly Press Survey
The Budget-Mr. Fraser

Semi-monthly-
Canadian Foreign Language Press Survey Nouvelles catkoliques Wartime Clips Nouvelles de guerre Monthly-
Canada at War Canada en guerre Canadian Churches and the War Consumer Facts
Information aux consommateurs Field Reports-monthly summary Forum Findings Labour Facts
Labour Facts-U.S. edition Labour Facts-overseas edition Communique Ouvriere Labour Press Survey Recent Poll Releases Wallnews Pour vous Occasional-
Canada at War-Spanish Canada and Civil Aviation Comm unique-b i-weekly Graphic Sheet Series Postwar Planning
Renseignements sur les projets d'apres-guerre Reference Papers Pages documentaires United Nations Charter Chartre des nations unies Your Neighbour, Canada Publications issued by Wartime Information Board and Canadian Information Service during 1945 for DND (Information to Armed Forces) for distribution at home and abroad to armed forces-
Semi-monthly-
Canadian Affairs Affaires canadiennes Civvy Street News Tenue de ville Monthly-
Canada Digest Canadian Affairs Pictorial Panneau affaires canadiennes Occasional-
Looking Ahead Series Notre vie de demain Welcome to War Brides 2. Publications issued by Canadian Information Service, January 1-May 31, 1946:
Daily-
Airmail Bulletin Airmail Bulletin-Spanish Weekly-
CIS Weekly Press Survey Monthly-
Recent Poll Releases Occasional-
Canadian Cook Book for British Brides Canada-Handbook for Mexican Book Fair Reference Papers Pages documentaires
Publications issued by Canadian Information Service, January 1-May 31, 1946, for Department of National Defence (Information to Armed Forces) (Publication ceased February 28, 1946)
Semi-monthly-
Canadian Affairs Affaires canadiennes

Monthly-
Canada Digest
Canadian Affairs Pictorial
Panneau affaires canadiennes
Occasional

Looking Ahead
Notre vie de demain.
Some few years ago I asked a question about the Department of Reconstruction and Supply; I asked what the daily releases of this department cost, and here is the answer I got:
No daily press releases are issued by the Department of Reconstruction and Supply but releases are issued, however, at irregular intervals whenever it is considered necessary to do so. As the preparation of these releases is only one of the many functions of the publicity branch, and as other branches are involved in the preparation and distribution, it is not readily possible to determine the exact cost.


James Lorimer Ilsley: What was the document the hon. gentleman placed on Hansard?


Gordon Knapman Fraser: It was a list of the publications issued by the wartime information board and Canadian information service.


James Lorimer Ilsley: I just want to point out that that would have to be with unanimous consent.


Gordon Knapman Fraser: I asked if I could put it on. If it is not with unanimous consent, I will not put it on the record.


James Lorimer Ilsley: I am not objecting to this, but I am disturbed at the increasing tendency on the part of hon. members to hand in documents as part of their speeches. At some stage we shall have to draw the line.


Gordon Knapman Fraser: I am quite willing to read it, although it will take me five minutes or so. Is it all right- to have it on?


James Lorimer Ilsley: A.s far as I am concerned.


Gordon Graydon: This looks like a proper case.


James Lorimer Ilsley: I have no objection to this, but we should draw the line somewhere.


Gordon Graydon: The government is the worst offender.


James Lorimer Ilsley: That is a different matter.


Gordon Graydon: There is no difference.


James Lorimer Ilsley: Yes, there is.


Gordon Knapman Fraser: I was talking about the reconstruction department and the answer that was given to me in regard to their releases. I might say that when these releases are not sent out the reconstruction department does not forget you. Here is a sealed envelope addressed to me by the Department of Reconstruction and Supply. You can hold

The Budget-Mr. Fraser
it up to the light and see that there is nothing in it. This is just one of many I have seen. I have checked up and found thirty-two others who during the past year have received envelopes of this kind.


James Lorimer Ilsley: With nothing in them?


Gordon Knapman Fraser: There is nothing in them. I will send this envelope over to the minister, and if he finds anything in it my eyesight will have to be examined.


Mr. KNOWLES:: Put it on Hansard.


James Lorimer Ilsley: There is nothing in this envelope.


Gordon Knapman Fraser: I am glad the minister did not find anything in it. Somebody suggested that there might be a ten-dollar bill in it, but no such luck.
I have a number of other cases of extravagance which I could bring before the house, but my time is limited. I might mention the Department of Veterans Affairs. The Minister of Veterans Affairs (Mr. Mackenzie) is always very much interested in things of this kind. I do not know whether it is his department or the Department of Public Works that is responsible, but I would ask the minister, and he can answer at some future date, just what it cost the government to tear down a part of the main building at the new Sunnybrook hospital in order to put in an elevator, which was forgotten when the main plans were drawn. That perhaps comes under public works. I would also ask why the window sash in that building were not of kiln-dried lumber instead of green window sash? Many of the windows have had to have strips put on them in order to keep them in place. I do not know whether that comes under veterans affairs or public works.
Every cabinet minister evidently did not check his estimates for this year. If he did, he should recheck them, because in looking over all the estimates I find that there are only four departments which show a decrease. All the others have increases.
The office of the chief electoral officer has a decrease, because we are not likely to have an election this year. The Minister of Fisheries (Mr. Bridges), who is not in his place at the moment, is a new cabinet minister and as yet he has not apparently that extravagant feeling which the other cabinet ministers have. Perhaps, as Minister of Fisheries he has had an opportunity to see so many suckers that he does not want to make suckers out of the taxpayers. Public archives estimates are down about $3,000. Reconstruction and Supply on one ordinary estimate is down, but on another
item this department is up by over $207,000,000. The other departments of the government that have increases in their estimates are:
Increase
Health and Welfare	 $63,221,407
Public Works	 14,710.826
Agriculture	 2,213,744
Civil Service Commission	 63,000
External Affairs	 751,482
Finance	 93,557,460
Justice	 365,383
Mines and Resources	 4,856.623
National Revenue	 2,758,866
That is the department that collects our taxes, and it wants $26,000,000 this year to run its own office.
Increase
Privy Council office	 $	223.725
Royal Canadian Mounted Police..	3,895,216
What is the reason for that increase for the Royal Canadian Mounted Police?
Increase
Secretary of State	 $	128,580
As the Secretary of State (Mr. Martin) knows, that is not petty cash but hard-earned taxpayers' money.
Increase
Trade and Commerce	 $ 3,174.393
Transport	 4.370,000
Veterans Affairs	 13,039,949


Ian Alistair Mackenzie: Is the hon. member opposed to that increase for the Department of Veterans Affairs?


Gordon Knapman Fraser: It is the only department I would expect an increase in. Was the minister going to say something?


Ian Alistair Mackenzie: I was asking if the hon. member is opposed to that increase?


Gordon Knapman Fraser: ing prices down. Every time I hear them praise themselves for that, it reminds me of the story I heard some time ago of a woman who went down the street to shop. She was walking along when she came to a sign in a store window that said "Bananas, seven cents a pound." She went into the store and asked for five pounds of bananas. The storekeeper said, "Sorry, madam; we have no bananas to-day." So she went two blocks down the street and in another store window saw a sign "Bananas, twenty-seven cents a pound". She went into the store and asked the storekeeper, "Why are your bananas twenty-seven cents a pound when up the street they are only seven cents a pound?" The storekeeper asked her, "Why didn't you buy some at seven cents a pound?" The woman replied, "The storekeeper didn't have any." "Well, lady," the storekeeper said, "if I didn't have any bananas I, too, would sell them at seven cents a pound." That is how our cost of living index is based.	It is
based on what we have not instead of on what we have.


James Lorimer Ilsley: That is not correct.


Gordon Knapman Fraser: The minister says that is not correct, but I have here from the dominion bureau of statistics a list of the items on which the cost of living is based. I will read the accompanying letter, which is dated June 28. 1946:'
I am pleased to enclose a mimeographed explanatory statement regarding dominion bureau of statistics cost of living index numbers. A complete list of items which are priced in connection with this series is included.
Yours very truly,
H. Marshall, Dominion Statistician.
I will read a few items from the list: Raisins, currants, prunes. Any housewife in Canada will tell you that they are almost impossible to get. Strawberry jam and marmalade. They are on the rationed list. Canned peaches. Has the minister had any canned peaches or canned fruit of any kind lately? I doubt it. You cannot buy it in the stores but it is on this list. That is what this cost of living is based on.


James Lorimer Ilsley: What are the other items?


Gordon Knapman Fraser: I will give the rest. Coal. Try to get it. Electricity. The price of that has not gone up but there is an eight per cent tax on consumption. Topcoats for men. Try to get a topcoat. Suits for men- try to get one.


An hon. MEMBER:: Shirts.


Gordon Knapman Fraser: There are no suits even for men who have priorities. The veterans have an extremely tough time to get any, and they

wait for months. Socks. I wrote the minister about socks for children; it was last fall that I was inquiring about long socks for children six to twelve years of age. We had children in Peterborough who could not go to school because socks could not be bought in the stores. I was down the street the other day trying to buy a pair of socks for myself, and I was told that they were not to be had. An hon. member to my left mentioned shirts. On the list here they have "shirts, broadcloth"; that is nothing but a laugh, for broadcloth shirts cannot be had. We can get fancy sport shirts, but not white shirts or broadcloth shirts. Women's wear is up to at least double the price.
Of dairy products we have on this list milk, which is subsidized; butter, which is rationed; cheese, which is in very short supply. Then meats: a long list of meats is given, and at the bottom we have bacon. If you want half or a quarter pound of bacon, when you go to the butcher shop you have to get the butcher on the side and whisper to him, and if you are lucky and have done good business with him you may get half a pound, but you will get it only once in two or three weeks. Fish is four times the 1920 price. Lard, it is almost impossible to buy. We are told that we must cut the consumption of bread. Rice cannot be bought. Rolled oats have not gone up in price, the reason being, I believe, that they are made in Peterborough. Then follows granulated sugar and yellow sugar, which also are rationed. Canned tomatoes are on this list, and we may get tomatoes here in the parliamentary restaurant, but the ordinary housewife cannot buy them.
To-day Canada, instead of being a land of plenty, is a land of scarcity. Over the weekend two farmers called at my place asking where they could buy nails to help to build barns. The veterans cannot get nails to build their homes; and the homes which have been built for the veterans by the department are so expensive that the veterans are paying through the nose for them.


Mr. SINCLAIR (Vancouver North):: Does the hon. member say that S23 a month is paying through the nose?


Gordon Knapman Fraser: If the hon. member would wait until I have finished he might not be in the mood to chirp up so quickly.


James Sinclair: A
home for a veteran at $23 a month is very reasonable.


Gordon Knapman Fraser: Just a minute. On the Queensway project for the veterans the houses run $6,900 apiece.

The Bridget-Mr. Bertrand (Terrebonne)


James Sinclair: But they pay only $23 a month.


Gordon Knapman Fraser: Hang on to yourself a minute. The return I got when I received these figures stated that what the veteran, had to pay was ten per cent of the $6,000 and everything over the 86,000, which would make his down payment $1,500.


Ian Alistair Mackenzie: How much a month?


Gordon Knapman Fraser: I am going by the figures given me by the department.


Ian Alistair Mackenzie: But how much a month is that over twenty-five years?


Gordon Knapman Fraser: That is not stated in this report. They just tell me what the veteran would have to pay for his home.


Ian Alistair Mackenzie: Does the hon. member know that what it is going to cost the veteran over the next twenty-five years is between $20 and $25 a month?


Gordon Knapman Fraser: How much a month?


Ian Alistair Mackenzie: Twenty dollars, with the additional grant. Tell me any country which has done better for the veteran. You do not know the first thing you are talking about.


James Horace King: Order. The hon. member must not be interrupted without his permission.


Gordon Knapman Fraser: Will the minister tell me what the veteran is paying?


Ian Alistair Mackenzie: Yes, I will. It is costing the veteran from $20 to $25 a month over
a period of twenty-five years, amortized at 3% per cent interest.


James Sinclair: Can you get it any cheaper than that?


Ian Alistair Mackenzie: Then he owns his house.


Gordon Knapman Fraser: In the return I received from the Department of Veterans Affairs it is stated that if a veteran wants to buy a house he has to pay SI,500 down for a house, costing $6,900, for which in 1939 you would not have paid $2,500.


James Sinclair: Stick to the tobacco business. You know something about that.


Mr. ROSS (St. Paul's):: You make your own speech.


Gordon Knapman Fraser: If the hon. member for Vancouver North (Mr. Sinclair) knows no more about his own affairs than he knows about mine, he does not know anything at all.


Mr. MacNICOL:: Wouldn't he know enough to come in out of the rain?


James Horace King: Order. The hon. member has already spoken for forty minutes.


Mr. MERRITT:: On a point of order, Mr. Speaker, if hon. gentlemen opposite are going to interrupt a speaker all the time without rising in their seats, I suggest respectfully that you should follow the procedure adopted in a football game when a wrangle starts; that is, take time out for interruptions.


An hon. MEMBER:: He had five minutes extra.


Mr. LIONEL BERTRAND (Terrebonne):: Mr. Speaker, I do not propose to discuss the budget fully because I am not an expert in such matters. I should like, however, to express my own views as well as those of my constituents and to offer a few suggestions which, to my mind, are timely.
I have only a few comments to make on the budget. The tax reductions announced on June 27 by the Minister of Finance (Mr. Ilsley) have been greeted with pleasure. I must say frankly, however, that the people are disappointed because they will have to bear the present tax burden throughout 1946 and receive relief in 1947 only. Overwhelmed by the crushing load of taxes for five years, the public expected special consideration. I recognize that in order to meet its numerous commitments the government needs revenues. However, a great many persons are of the opinion that in both the national and international fields Canada i3 proceeding at too quick a pace. It is true that every Canadian wishes that his country should enjoy all the prestige which it deserves, but Canada's membership in every international organization, the large loans which she makes to other countries, her generosity, her entry into numerous new fields of endeavour, are costing the Canadian public millions of dollars. On the other hand, the public justly feel that Canada's needs must come first. It behooves the government, therefore, to ascertain immediately the expenditures which may be eliminated in order, first, to reduce taxes more substantially and, second, to pass for the benefit of the people certain measures the need of which is fully justified by new circumstances which have arisen.
People complained about the tax on soft drinks, and it should have been abolished or reduced. The same thing applies to the war tax on several commodities which, since we are at peace, are regarded as necessities. The government has deemed it advisable to impose a tax on cooperatives. I am glad, however,
3368	COMMONS
The Budget-Mr. Bertrand (Terrebonne)
that patronage dividends are deductible from taxable income. This will enable bona fide county or village agricultural cooperatives to survive and fulfil their mission. There is something about the income tax that seems quite abnormal to me. The taxpayer must file his income tax return by a set date, otherwise he is liable to a penalty. Everyone will admit that discipline is necessary. However, I feel that when a taxpayer makes a mistake in his return-and it is not easy to fill out the forms correctly-he should not be required by the income tax division to pay a penalty and interest in addition to his tax. The government compels the taxpayer to pay on time but does not make haste in refunding overpayments. In my constituency there are people who applied for refunds in 1944 and have not yet been paid. Will the government also pay the interest? Certainly not. What is sauce for the goose should be sauce for the gander. In my opinion such refunds should be made within the year and the people have a right to insist that this be none.
The discussion on the budget provides us with an opportunity for expressing personal opinions and making suggestions. I had hoped to state my views while the consideration of the estimates was progressing, but I think the session has lasted too long already, and therefore I will summarize those points in which I am particularly interested.
The Minister of National Health and Welfare (Mr. Claxton) said a few weeks ago that old age pensions would be increased. I commend this effort. Such is the cost of living now that the present allowance is inadequate to equip old people with the means of coping with the additional needs of existence. At the beginning of the session I moved a resolution asking for pensions for invalids and crippled people. The principle was approved by all parties in this house and I thank those hon. members who spoke on the question. The minister himself seemed to be in favour of this proposal. It should be kept in mind, and next year perhaps one may hope that a bill to this effect may be introduced. We have no right to abandon this unfortunate class of society when we are giving away millions to relieve the distress and misery of other nations.
The country as a whole has greatly benefited by the family allowances, but I wonder whether the government is giving sufficient consideration to large families. Very often the head of a family is paid high wages but he must support eight, ten or twelve children. According to his salary, he must return part of his allowances:	40 per cent, for instance, if
he earns from SI ,800 to S2,000, 50 per cent from $2,000 to $2,200, 60 per cent from $2,200 
to $2,400, and so on up to $3,000. Would it not be fitting to consider one of these days the possibility of specifying for large families of a stated number of children or more, a recovery percentage fifty per cent lower than the present scale? This country would thus show special recognition of the large family, one of the most productive assets of a real nation.
My constituency is one of the most tourist-minded in the province. Renowned for its myriad lakes, the beauty of its forests, the grandeur of its landscape, Terrebonne county boasts hotels of international fame such as Gray Rocks inn, Mount Tremblant lodge, Pinoteau, Laurentide inn, La Sapiniere, Le Domaine d'Esterel, Ste. Adele Lodge, Alpine inn, Chalet Cochand, Chanteclere, Mont St. Gabriel, Nymark lodge, Hotel Lapointe, Hotel Maurice, to mention but a few.
The tourist publicity sponsored by the Laurentian resorts' association, which includes the above-mentioned hotels, has proved effective. Tourism is one of the country's chief industries, and it is proper to ask that appropriation for the dominion travel bureau be increased and that its advertising of this country abroad be intensified. I suggest that films should be used in order that such advertising should give the best results. Moreover, I consider that the dominion travel bureau should help bona fide associations like the Laurentian association to meet part of the cost of publicity carried out by means of booklets. I would even go farther and suggest that the national film board should produce in the tourist centres of the country films for distribution in the United States and elsewhere.
The cost of a film represents a fairly substantial sum, I admit, but the financial cooperation of tourist associations could be requested, if necessary. I know that a film taken in my mountains and divided into four equal parts corresponding with the various seasons would constitute a publicity medium from which the tourist industry in the whole Montreal district would greatly benefit.
May I suggest to the Minister of Public Works (Mr. Fournier) that the programme involving the construction of tourist roads, which was carried out before the war, should be resumed. That policy gave wonderful results. In this post-war period, when tourism is making an expansion which can only increase with the years, the construction of tourist highways would open up new districts to an industry whose returns represent hundreds of millions of dollars.

The Budget-Mr. Bertrand (Terrebonne)
(Translation): Mr. Speaker, I have placed the following motion on the order paper:
In the opinion of this House, the Department of Public Works should, without delay, study and make plans for the deepening or cleaning of the MilleTles river, at five or six points and for limited distances and widths, between St. Eustache-sur-le-Lac and Ste. Rose, Rosemere, Pont-David.
All the hon. members of the Montreal district, and especially the hon. representative for Laval-Two Mountains (Mr. Lacombe), who spoke in favour of this project, the day before yesterday, know the picturesqueness of this river and are cognizant of the fact that thousands of Montreal families spend the summer there. Yachting is very popular on this watercourse; however, it is navigable on a stretch of 14 miles only, between Pont-David and St. Eustache-sur-le Lac. Between these two towns, the channel, although narrow in places, is deep enough to accommodate even the largest yachts. In about four or five places, limited dredging and cleaning operations should be carried out. But what is unfortunate is that the yachts sailing this part of the river cannot reach Two Mountains Lake and vice versa. At St. Eustache-sur-le-Lac, there are rapids only a few hundred feet long, which may be sailed at high water only.
The first job to be done would be to improve these rapids. The removal, in the winter time, of some large boulders, which are to be found there and the marking of the channel, however narrow it may be, would be sufficient to allow yachts cruising on lakes St. Louis and Two Mountains to go down Mille-Ues river as far as Pont-David and back again. The removal of the boulders would not affect in any way the water level on Two Mountains lake but would further develop the 'tourist trade in the immediate surroundings of Montreal.
The membership of the Thousand Islands Yachting Club runs into the hundreds. The club is planning to build special wharves, repair shops for yachts, service stations, etc. The development which would immediately follow in the wake of such undertakings, involving but little outlay of time and money, is readily apparent. First, a first-rate tourist industry; for workers of the locality and vicinity, hardest hit by the shutdown of war plants, a plentiful source of jobs: building hundreds of homes on the islands and on shore, putting up wharves, laying out gardens, lawns, etc. For the farmer, a new market for his produce.
I commend this project to the minister. I know of his devotion to any cause likely to add to the country's might and standing. I
know that he will not balk at revamping his plans and at having his department look into this plan to which the hon. members for Montreal and vicinity cannot remain indifferent.
The annoimcement, confirmed by the Minister of National Defence (Mr. Abbott) that all Canadian servicemen now overseas, numbering about 14,000, will return "sometime before the end of the year" has been well received. I think they should have been brought back earlier. Then, too, Mr. Speaker, it is perhaps time that leniency be asked for the thousand odd deserters remaining in the country. Speaking in this house, early in the session, I suggested that a court be set up, in each military district, for reviewing cases of desertion on their merits.
All desertion cases are not caused by ill will or fear of danger. In many instances, they are based on excellent reasons which the parties concerned, while serving in the army, could not adequately explain, through timidity or for other motives. Other soldiers deserted because their application for farm or compassionate leave came up against the uncompromising attitude of certain senior officers who were die-hard fanatics; others because they were not given proper medical attention when they needed it; others still because their commanding officers refused to understand and to help them, or because the rebuff was tinged with an arrogance which hurt their pride. This is why it seems to me all these cases require special consideration and study. Circumstances must be taken into account. There have been deserters in my district; many rejoined their unit last summer and since then. Their cases have been straightened out. The same happened throughout the country. Detention camps, through the bad name they have acquired, prevented a large number of young men to abide by the law. This problem of deserters should be settled once and for all. More indulgence and consideration should be shown at this time to those who are held in detention or have rejoined their unit.
One hears of a permanent army. The international situation and our geographical position on the American continent might oblige us to maintain one. The military-minded could find a career in the permanent army which could only be organized on a voluntary basis. Compulsion, so hateful in war time, would become simply obnoxious in time of peace.
I have already stated in this house and I repeat that the government should sell or even hand over to private industry the war plants
3370	COMMONS
The Budget-Mr. Bertrand (Terrebonne)
which belong to the crown. The Bouchard munitions factory, operated by the D.I.L. during the war and now temporarily devoted to the needs of the army and the War Assets Corporation, is located in my riding. No final decision, seems to have been reached concerning its permanent function. I am too well acquainted with the Minister of Reconstruction (Mr. Howe) to think that he would drop such an establishment as the Bouchard plant built at a cost of some $20 millions.
The Saint Jerome army camp will soon close down, and the municipality is interested in purchasing this property for industrial purposes. The minister has already viewed the request sympathetically, and for this, he deserves the highest commendation.
Now that the armed conflict has ended, the government should pay municipal taxes on state-owned wartime buildings. Since the outbreak of hostilities, the government has not expended any money in that direction. I ought to point out here that the municipalities where war plants were built played host to a surplus population of which a large majority has now settled permanently within their precincts. The municipalities were required to incur large capital expenditures and to expand especially their water and sewer systems. For this reason, they should receive grants which would be used to improve their municipal services. Such works are still needed; small towns, owing to an increase in population due solely to the war, were compelled to incur large expenditures in order to cope with new and unforeseen conditions.
I am of the opinion that the rents charged by Wartime Housing are too high and as war plants are now closed down, tenants can no longer pay such high rents for their houses. The government should soon announce its policy in regard to the purpose for which such residential centres will be used. Will the municipalities have a priority if the government decides to sell them? Will the government retain them? Will those houses be sold to private parties? It would be interesting to have answers to those questions.
Large areas of land were expropriated for the construction of war plants and especially for their protection. They are no longer in use and represent an idle capital. Would it not be advisable for the Allied WTar Supplies Corporation to make a survey of all such idle lands to ascertain whether it would not be in order to return them to their former owners?

During the war, the government resorted to publicity in the press, both daily and weekly, to explain the laws and orders by summing them up. That was money well spent.
The war is over, but the laws are still as numerous. Post-war has imposed upon the government, and even upon parliament, very important decisions. Canada belongs to every international organization, but the people are not aware of their aims or purposes. During the war, the government informed the population by means of advertisements. Those of the wartime prices and trade board, for instance, were unique in this respect. All those advertisements served as information and guide for millions of readers. The newspaper is the best means of information. Our wartime information service should now become our peacetime information service. Such an organization could well explain the deeds of the nation and the laws of parliament by means of well-worded publicity, throughout the country, with the help of newspapers which are the best medium for that purpose. It has been proven that publicity is beneficial, even for a government. We should keep up the good work. I wish to make clearly known my position regarding the controversial question of a Canadian flag. I favour a flag, which will be entirely Canadian, that is a flag that will not borrow anything from the emblem of another country, no matter which one.
I feel that the matter should not be discussed from the standpoint of race, origin or history, but solely on the chief consideration that Canada, which has become a nation and is so recognized throughout the world, should have a flag of its own, symbolizing the ideals of all its component groups. A flag is chosen not for one year, but for centuries. I could never, as a member of this parliament, accept a flag of the presence thereon on account of a particular emblem, would leave upon the freedom I enjoy as a Canadian citizen the least trace of colonialism, and which would compel me to have even a partial liking for a symbol not fully consonant with the pride I have for my country.
Such are the remarks I wished to make. They indicate my views on the matters I have touched lightly. The budget announces some relief for the taxpayers after January 1st, 1947. Let us hope that the next budget will go farther in that respect. I should have hoped that more would be done for this year. I have received from my constituency hundreds of cards from people who claim that no tax should be levied on incomes lower than $3,000.
JULY tl, 1946
The Budget-Mr. Knowles
I am told that those cards were distributed by the Quebec section of the Social Credit party. I replied to none of them, because threats and intimidation-two things which I deeply abhor- were resorted to in the last paragraph. Many persons signed them without having read that last paragraph; they found out much later how they had been, deceived. It remained to be seen whether the Social Credit members, in this budget debate, would make the same demand. The leader of the Social Credit party (Mr. Low) preferred to ask for an exemption of $2,000 instead of S3,000. That party advocates here dividends for the whole population, but its members carefully avoid to tell us how the necessary funds could be obtained. It is much easier to criticize, than to govern. In my quality of member for Terrebonne, I am merely endeavouring to do my duty, in trying to be logical and sincere, in endeavouring to help in every way the people who have elected me, and also in upholding the principles and the ideas they have at heart. I feel that I have not failed in the performance of that task.
. (Text):


Stanley Howard Knowles: Mr. Speaker, in his budget address on June 27 the Minister of Finance (Mr. Ilsley), speaking about personal income tax, as reported at page 2916 of Hansard had this to say:
In revising a tax structure so complicated as our present one, it lias not been possible to assure that all taxpayers will receive the same relative amount of tax relief.
Then follows this sentence:
We have, however, tried to make the new schedule as fair and equitable as possible.
I rise to challenge that statement. I have no doubt the minister is convinced, certainly from his point of view, of the correctness of what he said; but we of the C.C.F. feel it is not true to say that the minister's income tax proposals are fair to those in the lower income brackets. That, indeed, is one of the main points of the subamendment which has been moved by this party, and having taken that stand ours is the responsibility of presenting facts and figures to substantiate our position. We contend that there is unfairness to those in the lower income brackets, in addition to the fact that there is no relief this year, on two main counts. The first has to do with the exemption levels, which have been set by the minister at $750 for a single person and SI,500 for a married person. We contend that these exemption levels are not high enough. Our second criticism on the ground
of fairness has to do with anomalies in the rate structure and with various inequities to which I wish to draw attention as I proceed.
First, I should like to say a further word about the point at which the minister has set the exemption levels. In his budget address he recognized that there was a demand that those levels be set higher than he was , prepared to agree to, and he proceeded to give his answers to those demands. The two main arguments he used were: first, the need of revenue, which he contended could be gained only by dipping into the brackets he proposes to continue taxing, and then he used the argument that one has to be fair between the $1,500 and $2,400 levels as well as between the $5,000 and $10,000 levels.
With respect to the argument that it is necessary to go down into the lower brackets in order to get sufficient revenue, the remarks I intend to make a little later, supported by statistics, will be my answer. I wish to say a word now about this other argument the minister used, which was made in the form of a plausible statement but one that does not stand up when examined closely. At page 2915 of Hansard the minister said:
We cannot secure proper equity and fair treatment if the exemptions from income tax are so high as t-0 exclude most of those receiving incomes.
Then came this sentence:
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 between these persons and those earning $5,000 or $10,000 a year.
The way the minister put that, it sounds like the statement of a principle, almost a moral or universal principle; and when it is put in that language, it appears to carry weight. But the simplest way to test the supposed universality of that principle is to alter the figures. The minister would not have thought of rising in his place in this house and saying it is just as important to be fair in the distribution of taxation between persons earning $500 a year and $1,000 a year as between those earning $5,000 and $10,000 a year. In other words, this principle of equity between taxpayers does not apply right down to the taxpayers' last bottom dollar. It has to start at a certain arbitrary point that makes allowance for the basic cost of living. The minister admits that by setting the levels at $750 and $1,500; and our contention is that in arriving at that arbitrary point he has not given sufficient consideration to the cost of living in Canada at the present time. What I am objecting to is putting it on a basis of principle at the levels chosen by the minister
The Budget-Mr. Knowles

without first giving full recognition to the amount necessary to maintain a decent standard of living.
I now want to turn to the other criticism we make, namely that there are anomalies in the rate structure. In the course of what I have to say I shall deal also with the question of whether or not sufficient revenue could be obtained without going down into the lower brackets. In passing, I desire to say that in arguing clearly within the confines of income tax legislation to-night, I do not want to be taken as admitting that this is the only way to balance a budget. My principal dislike of the financial position of the country at the present time is the more than $430 million a year we must set aside to pay interest on the national debt. This group has contended right along that what we basically need is the nationalization of our financial structure. At the moment we have not that and we have to deal with the kind of budget that is before us, so I shall talk in those terms.
Let us look at the rate structure which the minister has brought down and which he says he has tried' to make as fair and equitable as possible. I hope that the courtesy granted from time to time to hon. members to place certain material on Hansard has not been exhausted by the previous speakers, because I have four tables which I have prepared1 and which I should like to place on the record. I suggest, Mr. Speaker, that perhaps you might wait until I have described these before you ask the house whether or not unanimous consent is given to place them on Hansard. I may say that three of them are prepared from the two tables which the minister placed on Hansard at pages 2916 and 2917. The source of the fourth one I will indicate when I come to it.
The first table I have entitled, "Net increase in amount of income retained by taxpayers after payment of 1947 income tax as compared with 1945 and 1946." After all, that is what impresses itself upon the Canadian taxpayer, how much greater will be his "take-home pay" as a result of the application of this budget, compared with what it is at the present time. I have listed the income ranges from $1,300 a year to $200,000 a year. Opposite these I have three columns, one headed "single person," the next " married person with no children," and the next, " married person with two children." Those are the categories of which the minister gave examples in his tables.
Under these headings I have put the amount of the net gain realized by, or the net relief afforded to, these various taxpayers. When one looks at this table set out in that manner he will see some rather interesting things. First

of all, it becomes obvious that the greater a person's income, the greater will be the increase he will enjoy after the new budget comes into effect. I know that to many hon. members and to some people outside the house the principle has been accepted so long as to have become sacred that, to those who have an abundance more should be given than to those who are in the lower brackets and are in real need.
But bearing in mind the lofty principles advocated by this government, such as when it introduced family allowances and when it placed its social security measures before the dominion-provincial conference, it seems to me that more consideration ought to be given to the net position of the people of Canada than is given by the income tax revision in this budget. In addition, one discovers from looking at this table that in a number of cases all the way from $1,500 to $4,000 a year the married person without children receives a greater increase in "take-home pay" or is afforded greater taxation, relief than the married person with two children. I have mentioned this to a number of my colleagues. It is so incredible they have felt that I must be wrong, but the figures speak for themselves.
In addition to that, there are a number of instances, at the $1,300 level and all the way up from $5,000 to $200,000, where the single person is afforded greater relief and gets a greater increase in "take-home pay" than anybody else, than the married person without children or the married person with two children. In the face of a situation like that, I did not feel that I could let the minister's statement go unchallenged, although I know he believes it, when he says that he regards this schedule as fair and equitable.
I admit that it is fair to one group, namely, the 550,000 who have been -taken off the income tax rolls, but what a shame to have to admit that there are that many people in this country who, if single, are earning only between $660 and $750 a year or, if married, between $1,200 and $1,500 a year.
I move on to the second and third tables which I should like to give to the house. These two are made up from the two tables that the minister gave on the pages I have indicated. My headings on these are, "Amounts by which income tax payable is increased at each level over that payable at a base of $750" for a single person, and "Amounts by which net income tax payable is increased at each level over that payable at a base of $1,500," for a married person with two children. The reason I have worked out these tables is that in considering my first table the minister might

The Budget-Mr. Knowles
say that the anomalies found therein are due to an attempt to correct previous wrongs. So I thought I would look at the rate of increase in the new structure. It will be perfectly clear to hon. members when they look at these tables that the grading up of the rates was steeper under the old system than it will be under the new. In other words, the rate of increase has been slightly levelled off, whereas we contend that as you get up into the higher brackets, the grading should become more and more steep.
My fourth table is made up from figures given by the Minister of Finance but they do not appear in the two tables to which I have referred. This is entitled, "Comparison of rates of income taxation on taxable income in the nearest comparable brackets as between 1941 and 1947." What I have done in this table is to set down in the 1947 column the rates that apply on taxable income according to the budget now before us. In the 1941 column I have set down the rates that applied on taxable income in that year.
My reasons for selecting 1941 to compare *with 1947 are several, but the main one is that it was the only year with which one could make an exact comparison because in the years in between we did not have the $750 and $1,500 exemption level. Instead, we had a $860 exemption level, and then allowances were given by deductions from the tax payable for a wife or children. We are now back to a basis which is comparable with that of 1941. The only difference is that in 1941 we had two taxes, the graduated tax and the national defence tax. I have added the average amount of the national defence tax payable in 1941, namely, 3i per cent, to each of the rates in the different brackets.
An interesting thing that develops from this table is that in the brackets from zero up to $3,000 of taxable income, the rates in 1947 are greater in all cases than were the rates in 1941. For example, in 1941 the rate for the first $1,000 was'18i per cent. It is now 22 per cent for the first $250, and 25 per cent for the remainder of the first $1,000. So it goes right on up to $3,000; the rate to be applied under the new budget in each case in these lower brackets is greater than it was in 1941. But from $3,000 to $30,000 the rates to be applied in 1947 are in all cases less than those that were applied in the year 1941.
The picture changes slightly between $30,000 to somewhere around $100,000 to $150,000, but in the topmost bracket the rate will again be less in 1947 than it was in 1941.
I might add that 1941 was not the year of the highest income tax rates. I chose that year for the reasons I have already given.
Actually it was 1943 that we reached our peak in income tax rates. They went higher in that year for all the brackets, both the lower and the higher. WThen one compares the rates in 1943 with those in 1947, the brackets from $30,000 up are afforded substantial relief, namely, 17 per cent. For example, the rate was 77 per cent on incomes between $30,000 and $50,000 in 1943, and it is now 60 per cent.
I have worked out the table and presented those figures to the house for two reasons: first of all, to show that the budget proposals now before us afford much greater relief for those in the higher brackets than they do for those in the lower brackets. My other reason for presenting those figures is to support the statement I made when I first rose to my feet; namely, that the minister cannot ojaim that he is unable to get sufficient revenue without dipping into the lower brackets the way he does in this budget so long as he gives this kind of relief to those in the upper income brackets. If he were really interested in seeing that an adequate minimum amount was free from taxation he should first of all have maintained or even increased the rates on the upper brackets, and only after he had done that would he have any right to dip down as he has done into the lower brackets.
Another reply that might be made by the minister could be that the 1941 rates to which I have referred did not produce in that year the amount of revenue he now needs. I have looked into that, and I find that compared with the gross national product of that year, the total amount of revenue that was obtained from those rates in the fiscal year 1941-42 was not far out proportionately from the revenue that he expects in a full year under these new rates. So I suggest to the minister, accepting the challenge that we who claim that the exemption levels should be higher should have some concrete suggestions to make, not that the sales tax should be extended as was proposed by an hon. gentleman to my right the other night, but that the exemption levels should be raised to SI,000 and S2,000 respectively; that the rates between $2,000 and $3,000 could have been slightly lowered, and that the rates between, say $3,000 and $15,000 or $20,000 might have been left where they were, but that from $20,000 up the rates should have been restored to what they were in 1943. Only after that, if a mathematical computation showed a deficit in the revenue required from personal income taxes, should the minister have thought of going asi he has done into the lower brackets.

The Budget-Mr. Knowles


James Lorimer Ilsley: 
Stanley Howard Knowles: It shows an even progression but it is a progression not as steep as we had before. And if levelling out that progression as the minister has done makes it necessary for him to impose the taxes on the lower brackets that he has done, I say it is not fair and equitable.


James Lorimer Ilsley: Well, I see your argument.


Stanley Howard Knowles: It strikes me that what has happened is this, that in the war years the minister got those in the lower income tax brackets into the way of paying these heavier taxes and there is not now a disposition to let them go.
Before I turn to another phase of the budget, Mr. Speaker, have I permission to put these tables on Hansard?


The ACTING SPEAKER (Mr. Golding):: Has the hon. member permission to put these tables on Hansardt


Mr. HOMUTH:: If they are correct, it is all right.


William Henry Golding: The hon. member must have unanimous consent.


James Lorimer Ilsley: I shall not raise any objection. But of course there is no admission as to their correctness if we allow them to be put on. If they are incorrect, then, if there is time and opportunity they will have to be answered.


Stanley Howard Knowles: I will vouch for the correctness of these tables. Actually a member would be pretty foolish to try to put incorrect tables on Hansard.


Karl Kenneth Homuth: A lot of incorrect things have been put on Hansard.


James Lorimer Ilsley: Hear, hear.


Major James William Coldwell: Mr. Speaker, another hon. member to my right was given unanimous consent this evening to put something on Hansard and I think we might extend the same courtesy to my colleague.


William Henry Golding: Has the hon. member unanimous consent?


Some hon. MEMBERS:: Agreed.


Stanley Howard Knowles: Thank you. The tables are as follows:
Net Increase in Amount of Income Retained by Taxpayers After Payment of 1947 Income Taxes as Compared with 1945 and 1946
Married Married Person Person
Income	Single Person	with no Children	with two Children!$ 1,300 	$ 51*	$ 31	$ 141,500 	28	84*	422,000 	57	76*	732,500 	73	134*	833,000 	99	108*	764,000 	174	247*	985,000 	246*	185	2257,500 	437*	324	32810,000 	584*	437	30820,000 	1,364*	1,146	1.05130,000 	2,053*	1,667	1,57150,000 	3,228*	450	2,45875,000 	4.438*	524	3,343100,000 	5,467*	525	3.953200,000 ....	6,335*	1,400	3,235
'Indicates greatest amount of relief afforded at each level.
tFigures in this column include family allowance payments of $144 a year in all cases.
Amounts by which Income Tax Payable is Increased at Each Level over that Payable at a Base of $750
Single Person
Under 1945
and 1946	Under 1947
Income	Rates	Rates
Tax Payable Tax Payable at this level at this level used as a	used as a
$	750	
Base	Base1.000	$	52 $	551,250	
115	1181.500	
183	1802.000	
345	3132.500	
501	4533.000	
667	5934.000	
1,045	8965.000	
1,427	1.2067.500	
2,470	2,05810.000	
3,597	3,03820.000	
9,239	7.90030.000	
15,428	13,40050.000	
29,294	26,09175.000	
47,928	43,515100.000	
67,458	62,016200.000	
140,751	143,441
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Amounts by Which Net Income Tax Payable is Increased at Each Level over that at a Base of $1,500
Married Person with Two Children
Under 1945
and 1946	Under 1947
Income	Rates	Rates
Tax Payable Tax Payable at this level at this level used as a	used as a
$ 1,500	
Base	Base1.750	$	38 $	112.000	
99	682,250	
174	1302.500	
234	1932.750	
296	2273.000	
361	3274.000	
663	6075.000	
994	9117.500	
1,911	1,72510.000	
2,913	2,64720.000	
8,387	7,37830.000	
14,407	12,87850.000	
27,937	25.521100.000	
65,262	61,351200.000	
145,874	142,681
old age pensions, in health insurance, in full employment, in housing and other much needed projects. Those of us on this side who in the past have spoken of these things and criticized the government for its failure to provide them now find that we do not have to raise the standards by which to compare what the government has done; rather the government stands condemned by its own standards. The government has thrown these ideas out to the Canadian people and given them the hope that these things would be realized in the not far distant future. I remember very well last year getting into a bit of a discussion with the Minister of National Health and Welfare (Mr. Claxton) when I was speaking on old age pensions. He felt I was taunting him unduly when I asked why the increase in old age pensions seemed to be slated for 1948 according to the figures
Comparison of Rates of Income Taxation on Taxable Income in Nearest Comparable Brackets, as Between 1941 and 1947.
1941		1947	
0-$ 1,000	
185%	0-8 250	
S 250-$ 1,000	
22% 	
25%$ 1,000-$ 2,000	
235%	$ 1,000-$ 2,500	
28%$ 2,000-$ 3,000	
285%	$ 2,500-$ 3,000	
31%S 3,000-$ 5,000	
335%	$ 3,000-$ 4,500	
31%$ 5,000-$ 6,000	
$ 6,000-$ 7,000	
395% 	
415%	$ 4,500-$ 6,500	
34%$ 7,000-$ 8,000	
435%	$ 6,500-$ 8,500	
38%$ 8,000-$ 9,000	
S 9,000-$10,000	
455% 	
475%	$ 8,500-810,500	
42%$10,000-$15,000	
505%	$10,500-$13,000	
46%$15,000-120,000	
535%	$13,000-818,000	
50%$20,000-$30,000	
56}%	$18,000-830,000	
55%
I now wish to deal with another phase of the matter. There is great disappointment with this budget, principally because it is not a human document. It does not deal with the things that people in this country are really interested in and really need. The government knows what those things are. As a matter of fact it is on record in the proposals that were made to the dominion-provincial conference. The people of this country are interested in social security, in adequate 63260-213
given in the documents presented to the dominion-provincial conference. I even went so far as to ask whether that meant we might look for an election in 1948. The minister did not like that suggestion, and came back at me with the definite statement that these increases in old age pensions would come into effect just as soon as the provinces would agree to the government's proposals. The whole tone of the minister's remarks on that occasion and last year indicated that there was an interest

The Budget-Mr. Knowles

on the part of the government in going ahead with these things, and the people of Canada thought these measures were imminent. But now, with the failure of the dominion-provincial conference, the proposed increase in old age pensions and other social legislation are referred to by the minister in the past tense.
This country is not satisfied to let the government use the failure of the dominion-provincial conference as an excuse. There is almost a feeling that maybe they are glad they did not have to find the money to carry out these social services. I know, for example, that two of the provinces-my own province of Manitoba and Saskatchewan-in agreeing to the government's revised proposals as laid down in the minister's budget, have indicated, along with their acceptance of the proposals, their disappointment. I do not wonder they are disappointed. Look at my own province, for example. Under the proposals which were made last August for an additional expenditure throughout Canada by the federal government of $733 million, the people of Manitoba, on the basis of what our population is in the country as a whole, would have benefited to the extent of approximately $45 million. But under the proposal made by the minister the other night Manitoba's receipts will be only $11-8 million, although the province will have to give up everything it was asked to give up last fall. That amount is more than the government of Manitoba is receiving at the present time from the same sources; it is a good deal for the government as far as balancing its budget is concerned, and the premier of Manitoba says, in his statement to-day, that they have come to the conclusion that such an agreement is better than no agreement at all. But for the people of Manitoba and of Saskatchewan there is the loss of these other things which were provided for in the proposals made to the dominion-provincial conference. It does seem to me that the least the government might do would be to make an offer along the lines of increased old age pensions, health insurance and these other matters to the provinces which are prepared to enter into these agreements. The idea of penalizing all the people of Canada, of depriving them of the things which they have looked forward to, because of the failure of that conference, somehow just does not go down with the people of this country.
The minister said the other night in the peroration of his speech as reported in Hansard at page 2925:
We Canadians can achieve great objectives if we can agree among ourselves upon those objectives and devote our energies to reaching them. That is clearly shown by what happened in the war.
OIr. Knowles.]
The Canadian people believe that we are capable of producing an increased quantity of goods and services, on the basis of which we can raise our standard of living and give our people some real sense of security. But this government is giving no leadership in that direction.
I come back to this question of old age pensions. I think on that score alone the government of this country missed a tremendous opportunity to give our people some real sense of security, some definite feeling of hope and confidence about the future, and that its failure on that score is indeed lamentable.
I might say a good many other things critical of this budget if my time permitted, but I see it is fast going. So before I sit down I want to add that, with all the criticisms which the people of Canada are offering about this budget, it could have been worse. If anyone doubts that, all one has to do is to listen to the suggestions which have been made to the government by hon. members of the Progressive Conservative party.


John Ritchie MacNicol: They would improve it.


Stanley Howard Knowles: I do not doubt that my hon. friends think they would improve the situation from their point of view. But here are some of the things which have been suggested: higher interest rates, a reduction of corporation taxes, reduction or elimination of the excess profits tax. There has been a campaign for decontrol, which, no matter how you word it or how you try to dress it up, means in the long run imposing burdens upon the ordinary working people of this country, but assistance has been asked for gold mining.


Gordon Graydon: Would my hon. friend permit a question?


Stanley Howard Knowles: Certainly.


Gordon Graydon: Is it not true that your party in Great Britain has abolished the excess profits tax?
An hon.. MEMBER: Don't compare the Labour party in Great Britain with the C.C.F.


Stanley Howard Knowles: The Labour party in Great Britain has already nationalized the Bank of England and a number of important industries.


Karl Kenneth Homuth: Oh. but have they taken off the excess profits tax?


Stanley Howard Knowles: Yes, and are giving to the people of that country some real hope for the future-

The Budget-Mr. Knowles


Karl Kenneth Homuth: That is rather doubtful.
The next election will show that.


Stanley Howard Knowles: -which is what counts and which my hon. friend's party would not offer to the people of this country. I was surprised at the suggestion of the hon. member for Rosedale (Mr. Jackman) that there should be a wider use of the sales tax. That was the most striking Tory suggestion. After all, the sales tax does not impinge according to ability to pay at all. It takes from the low-paid man just as much on what he buys as it takes from the rich. So I suggest that, bad as this budget is, it could have been worse if-


An hon. MEMBER:: If you had been in power.


Stanley Howard Knowles: -if the minister had taken advice from my hon. friends of the Tory party. The fact is that the bankruptcy of both the old parties in this house is evident. They talk in terms of leadership of the country and of the great future we must have on the basis of what we have done in the past. But budgets of the kind the minister has presented, and suggestions such as those of my hon. friends to the right, simply indicate to the people of this country that there is no hope either way.


An hon. MEMBER:: Your way is a
dictatorship.


Stanley Howard Knowles: Nonsense. I am not one of those who stand here and glibly say that that means that overnight the people of Canada are going to turn to this party.


Karl Kenneth Homuth: Oh. no; never, never.


Mr. ROSS (Souris):: You will not live long enough to see it.


Stanley Howard Knowles: But, Mr. Speaker, my hon. friends of both the old parties-whistling as they are to keep up their Courage-know that, step by step, the realization is dawning in the minds of the Canadian people that their only hope lies in their taking control of things themselves, in the full meaning of democracy.


An hon. MEMBER:: The very thing that wrecked Europe.


Stanley Howard Knowles: More nonsense.


James Lorimer Ilsley: Perhaps this is not a relevant question. Would my hon. friend express an opinion as to whether this budget is not a more liberal budget in the broad sense of the term

with a small "1" so that we will not raise any argument-than the budget in Great Britain, with a $490 exemption and an abolition of the excess profits tax?
63260-213*


Stanley Howard Knowles: No, I do not agree that it is a more liberal budget.


James Lorimer Ilsley: And no distinction between cooperatives and other corporations in the matter of taxation.


Stanley Howard Knowles: I am not sure that the minister is correct about the latter, but I will not argue the point.


James Lorimer Ilsley: Then leave that out, but consider the other two. I ask my hon. friend, * when he is denouncing this budget, if he does not think it is a more liberal budget, in the broad sense of the word "liberal", than is theirs?


Stanley Howard Knowles: Keep the "1" small, and it is a fair question.


An hon. MEMBER:: They nationalized
the banking system.


James Lorimer Ilsley: Someone speaks of the
nationalization of the bank. We nationalized ours nearly ten years ago.


Stanley Howard Knowles: The budget has to be taken in the total context of the nation's economy, and in the total context of the economy of the United Kingdom there are provisions for social security from the cradle to the grave which are now in effect and the beginnings of a programme of nationalization-


Karl Kenneth Homuth: Socialization.


Stanley Howard Knowles: Yes, socialization.


Karl Kenneth Homuth: At last you have admitted it. You have been denying it for years.


Stanley Howard Knowles: I came into this party years ago because I was a socialist. That is why I am here to-day.


Karl Kenneth Homuth: You got into the right crowd, though you have been denying it for years.


Stanley Howard Knowles: And that programme of socialization to which I have referred is one which affords a future of hope to the people of the United Kingdom.


James Lorimer Ilsley: You think there is no hope here?


Stanley Howard Knowles: Not as much as there is over there; not yet, at any rate. As a matter of fact, a good many young Canadians are going back to England, for despite the severity of conditions-


Karl Kenneth Homuth: And a lot of Englishmen would like to come out here.


Stanley Howard Knowles: -they have found the atmosphere over there so acceptable; and, after all, that is what counts-the total picture. And so, Mr. Speaker-
The Budget-Mr. Kuhl


Karl Kenneth Homuth: Give him an extra thirty minutes and he will be in deep water.


William Henry Golding: The hon. member's time has expired.


Some hon. MEMBERS:: Go ahead.


Stanley Howard Knowles: No; I am not asking for any more time, Mr. Speaker. I am prepared to rest my ease with the answers I have made to the questions of the Minister of Finance. This budget, in its total context, is a disappointment.


Mr. W. F. KUHL (Jasper-Edson):: I realize that we are still in an emergency period and I realize as well as any member of the house that so long as that emergency exists we cannot expect the standard of living that we should otherwise expect. We cannot expect it so long as there are multitudes of starving people in the world, so long as there are many without the essentials of life. It would be inhumanitarian of us to expect a high standard of living for ourselves before we have at least made our contribution toward raising the living standard of those people. Despite that fact, now is the time that we ought to be laying down long-range objectives for the time when the emergency is over, and that is my greatest concern. That is why I wish to choose, as the cue for my remarks, the concluding words of the Minister of Finance (Mr. Ilsley), which were also quoted by the hon. member who preceded me. Personally, I consider those particular remarks of the Minister of Finance just about the most important in his whole budget speech. I do not know that it is necessary for me to quote the whole thing. I will read one paragraph in which he says:
We Canadians can achieve great objectives if we can agree among ourselves upon those objectives and devote our energies to reaching them. That is clearly shown by what happened in the war. Now that the war is over, we have an opportunity to select and to achieve objectives just as challenging, just as exciting as those of war, but of a constructive and progressive nature. I believe that the Canadian people, if properly informed, are prepared to agree, by and large, upon great peace-time objectives and to devote to their attainment something of the same spirit and energy which made our war achievements possible. It is the duty of all of us in government, in business, in labour, in agriculture, to do all that we can now to make, possible that agreement upon ends and upon means which null enable Canada in peace to be worthy of the record of Canadians at war.
I think that is an important statement, and I shall confine my remarks on this occasion to a consideration of objectives toward which we should strive once we are through the emergency period, as well as the means whereby we may attempt to attain those objectives.

We heard a great deal a few years ago, as we came to the conclusion of the war, about the new order, a new heaven and a new earth. The only comment I care to make in that respect is that if this budget or the nature of it is to be a sample of the new order, I would characterize it not as a heaven on earth but as a hell on earth. In considering objectives and means of attaining them for the future, I should like to pose a few questions. If we are to have this much-vaun.ted new earth, this new order, does it mean necessarily that we must throw overboard the whole of the old order, or is it possible that there are things that we ought to preserve from the old order?
Perhaps there are things that we should eliminate from the old order, and perhaps there are things we should add to make the order work as nearly close to perfection as any human institutions can be made to work. I will attempt to answer these questions. What is it that we wish to preserve of the old system? I realize, immediately I make such a remark, that I shall come into conflict with my hon. friends to the right, in the C.C.F. party, but I wish to assure them that anything I may say by way of criticism of them is not intended to be personal. I consider they are fine fellows personally, likable fellows, but unfortunately I must take decided issue with the policies they support. Therefore in discussing the question as to what we should preserve of the old system, I wish them to understand that it is with the policies they advocate that I am taking issue. It is far beyond a personal matter.
During the course of this debate so far almost every member of the C.C.F. party who has spoken, including the hon. gentleman who preceded me, has stated that private enterprise as such is through. I wish to take emphatic issue with that statement and to assert that private enterprise as a principle is as sound as the rock of Gibraltar. The reason, as I have said on many previous occasions, that hon. members of the C.C.F., as well as communists, condemn private enterprise is that they hold it responsible for things for which it should not be held responsible. I say the C.C.F., and all those who condemn private enterprise, are charging it falsely.
What do they say? One of the first things they say is that private enterprise has failed because it does not and has not provided employment. How many times have we heard that stated, in parliament and out of it? We hear the statement made that private enterprise has failed, because it does not provide employment. I say that is a false charge, because private enterprise is not responsible

The Budget-Mr. Kuhl
for employment, and should not be held responsible for it. I shall deal at greater length with that point in a few minutes.
Again, our socialist friends say that private enterprise has failed, because it has not effected a distribution of the national wealth, and the products of industry. Again I say that is a false charge, because private enterprise is not responsible for distribution and cannot be held responsible for it. Therefore I say that is false charge No. 2.
Again, our C.C.F. friends assert that private enterprise has failed, because it refuses to develop natural resources. Well, certainly if conditions in the pre-war years are indicative of what can be done under a system of private enterprise then no one with reason can assert that there was no development of our natural resources. The country was flooded with goods; everyone was complaining about overproduction; the warehouses and storehouses of our country, from one end to the other, were stocked with goods. Plant equipment was running at half capacity, and even less. Surely there was no indication at that time of a refusal to develop resources. I say that, too, is a false charge.
The socialists claim that private enterprise refuses to plan. Again I say that is a false charge, for observation must indicate to anyone that the method of producing goods on this continent, including Canada and the United States, is equal to and perhaps in many respects is superior to the method of production anywhere else in the world.
So I say, Mr. Speaker, that all these charges against private enterprise are false. I consider that one of the strongest reasons that can be advanced as to why the principle of private enterprise is sound lies in the fact that every citizen in this country wishes to exercise that principle for himself. That includes even our friends of the C.C.F. They, themselves, privately and personally, are private enterprisers. They own their own farms and they own their own businesses; they are private enterprisers at heart.
The greatest argument in favour of private enterprise is the fact that each and eveiy one of us privately and personally, in his heart of hearts, is a private enterpriser. 'We desire the principle of ownership for ourselves; we desire to own our own .property, our own business and our own affairs, in our own way, without any interference from the state.
As I have said on previous occasions to my hon. friends in the C.C.F., I consider that aspect of their policy the one deserving of greatest condemnation. As I have said several times before, they follow the policy of making
fish of one and fowl of another. On the one hand they condemn profit and the profit motive, private enterprise and private ownership; and yet, so far as their policy is concerned, on the other hand they propose to leave part of the community operating under private enterprise and propose to nationalize or socialize another section of it.
As I have said previously, consistency is the test of any policy. If the profit motive is wrong in principle, if the making of profits is a wrong procedure, then surely it must be wrong for everyone in the community. How can they be right for some merchants, just because they happen to be small businessmen, and wrong for others? I say that glaring inconsistency should arouse the suspicions of the people.


Mr. ZAPLITNY:: Does the hon. member's party say that everything should be privately owned? Is that his argument?


Walter Frederick Kuhl: Personally I would not see
any harm in that being so.


Frederick Samuel Zaplitny: Everything?


Walter Frederick Kuhl: I do not think ownership of production of anything has anything to do with the distribution of the product, I am not saying, for instance, that if the Social Credit party were charged with the responsibility of forming an administration it would turn the Canadian National Railways over to private ownership. I am not saying that, at all.


Frederick Samuel Zaplitny: To be consistent, the
hon. member would have to say that.


Walter Frederick Kuhl: Well, I personally would be prepared to do it, perhaps.


Mr. BRYCE:: Would the hon. member be prepared to hand over the post office?


Walter Frederick Kuhl: Of course we would get into an argument as to what constitutes a public utility. In that particular, one could draw a line anywhere he wished, as he wished to define it. My hon. friends want to go a good deal farther than the post office. They would want to go right down into the production of boots and shoes, and things of that kind.


Mr. HANSELL:: They want money enougn to ride on the railways.


Walter Frederick Kuhl: So far as nationalization is concerned, what difference does it make whether or not the government owns a business? The Canadian National Railways are publicly owned; but one cannot ride on those railways free of charge, any more than he can on the Canadian Pacific. Nor can one
The Budget-Mr. Kuhl

ride free on Trans-Canada Air Lines. If one may Judge from what my hon. friends contend, it must follow that because things are nationalized we would get those services a good deal cheaper, and perhaps even free of charge. But there is no indication of that at the present time. Then, so far as effectiveness of administration is concerned, I contend that private administration is infinitely better than public.
At this point I should like to elaborate briefly on what I have described as false charges, the first of which was that private enterprise has failed, because it does not provide employment. I hesitate to repeat many of the things I have said on previous occasions; but despite the fact that I have repeated myself hon. members continue to say that the purpose of private enterprise is to provide jobs. As I have said before, so long as they are going to insist upon that statement, I shall continue to insist that that is not the purpose of private enterprise. I have already said that the charge that it does not provide jobs is a false one, because it is not responsible for employment. That is where our Liberal and Conservative friends fall into the socialist trap. They assume on behalf of private enterprise the obligation to provide jobs; and they know right well it cannot be done, that private enterprise cannot absorb all the people of the nation to the- extent of eight hours a day or more. Surely they must know that from past experience. Yet they accept that responsibility; and when the C.C.F. come along and say, "Well, look what happened in the days before the war; we had private enterprise and look at the unemployment," my hon. friends of the Conservative and Liberal parties have no answer; they simply sit there and take it. They should have an answer, but they never will until they have the social credit answer, which is that private enterprise is not responsible for employment. The only function and purpose of industry is to produce goods, whether it takes few or many man-hours.
The other day I placed on record a quotation with respect to objectives, on this subject. I am going to do so again, and I am going to continue to do so until the thought penetrates the understanding of hon. members. I am going to quote Major Douglas once more.


Mr. CAMPBELL:: Who is he?


Walter Frederick Kuhl: Major Douglas is a man who has concentrated more thought, more intelligence, more vision and more realism in one sentence than the hon. member has in all the speeches he has ever delivered. In his book

entitled "Monopoly of Credit", Major Douglas has this to say on the subject of industry and employment, at page 116:
In attacking an engineering problem the first point we settle, with as much exactness as possible, is our objective. No engineer observer of the discussions which take place in political and lay circles on the industrial problems of the present day can fail to be struck with the fact that the problem itself is rarely stated with any clearness. For instance, the paramount difficulty of the industrial system is commonly expressed as that of unemployment. Therefore the suggestion involved is that the industrial system exists to provide employment, and fails. Those who are engaged in the actual conduct of industry, however, are specifically concerned to obtain a given output with a minimum of employment, and in fact, a decreasing amount of employment. Consequently, those who are talking about industry and those who are conducting industry have in their minds objectives which are diametrically opposed and incompatible.
In view of what the Minister of Finance has said about agreeing on objectives, I think this is one statement on which he should meditate seriously. As I said only a few days ago in accordance with this statement., we are presuming to attempt to go in two opposite directions at the same time on this subject of employment. On the one hand, we do everything possible to encourage the substitution of more and more power machinery, better machinery, more efficient machinery, and before long we are going to use atomic energy. On the one hand, we are doing everything we can to displace the man-hours of work, and we have achieved a great deal in that respect in a very few years. Yet on the other hand, what do we find? People continually suggest and urge that we must put people to work. On the one hand, we are putting them out of work; on the other hand we say we must put them to work. How is it possible I say, to go in opposite directions at the same time? To my Liberal and Conservative friends all I wish to say on that score is that, unless they are prepared to alter their attitude on this subject of unemployment, they must expect the socialist charge which is laid against them. Therefore I say that, to be reasonable and logical, it should not be suggested that private enterprise is responsible for providing jobs for anyone, because it is responsible for production only. So that I say we should concentrate on the matter of production and forget about the jobs, whether it takes jobs or not. The thing we are interested in is production, no matter how many or how few jobs it gives.
The second charge which I have said I considered false is the charge that industry refuses to develop the natural resources. I have pointed out already that in the days prior to the war we had a virtual flood of

The Budget-Mr. Kuhl
goods. We had so-called overproduction, though actually it was underconsumption, which I think indicates beyond the shadow of a doubt that private industry produces goods in superabundance. I grant that industry wants to sell at a profit, but who does not? Do my hon. friends in their businesses refuse to sell at a profit? Do they sell at cost? I say the profit motive is sound and legitimate. The profit system is not only a profit system; it is a profit and loss system. That is one aspect my hon. friends of the C.C.F. do not emphasize very often. Perhaps they have never invested money in an oil well, or anything like that. Profit is a reward for enterprise and risk, and I say those who are prepared to exercise enterprise and take a risk are entitled to a profit. As far as motives are concerned, I say we are all actuated by the profit motive, including my friends of the C.C.F. Each one of us is actuated by a profit motive; and I think it is unwarranted presumption on their part to assume this "holier than thou" attitude that only those who are not C.C.F'ers are actuated by a profit motive.
The only disability with respect to profit as such is the fact that it constitutes a mathematical impossibility. A profit is merely an addition to the price without a corresponding amount of money going into circulation. In other words, if a profit is not monetized it does not exist as money, and the only way it is monetized to-day is through debt money. So we have debts created corresponding to the amount of profit charged into the goods we must purchase, and I say that is the only disability in connection with profits. They are not monetized properly. True, they are monetized through debt money, but that need not be. If all the profits charged into goods, regardless of what they are, were monetized completely, then the consumers could purchase them completely.
Then I said private enterprise was being held guilty, because it does not distribute the goods. I repeat that it should not be held responsible for the distribution of goods. True, to the extent that labour is involved and wages paid out, distribution is brought about, but. complete distribution cannot be brought about through incomes paid out of industry. Those in the Social Credit group have brought forward that premise on many occasions; and on that premise the proposals of Major Douglas rest.- I repeat; No individual industry or industry collectively distributes as much in purchasing power as it produces in the prices of the goods. That is not because there are excess profits. It would not make any difference whether the profit was a small percentage or a large percentage. The fact remains, and
it can be proved by examining the books of any institution, whether it be a peanut business on a street corner or a million-dollar corporation, that every business institution generates more in prices than it does in income. Consequently it is not possible for the people to buy all the products of industry as a consequence of the incomes they derive out of industry. Raising wages will not help; it simply adds to the prices by raising costs. Another solution must be found.
Another point which our C.C.F. friends make in charging private enterprise is that it refuses to plan. I cannot conceive of any more need of planning than to go ahead and1 produce. That is all the planning required so far as my intelligence leads me to conclude. I have already said that there is plenty of evidence that Canadian and United States industry is equal or superior to any system of production in the world.
I assert that a planned production such as socialists advocate is a totalitarian concept. Our system does not bog down because it is not planned by government bureaucrats. Our C.C.F. friends have made the statement frequently that the war effort was what it was because it was planned. I take issue with that. There was a certain amount of planning, but I say the success of our war effort was due, in a far greater measure, to the fact that there was a guaranteed market for everything produced. There was no difficulty in selling anything that was produced, because there was plenty of money afloat; in fact there was too much. I say it is not necessary to be concerned about planning production. What we must do is to concern ourselves about consumption. If consumption is taken care of, production will take care of itself.
It is unnecessary to abolish the private enterprise system merely because of the abuses to which it is exposed and its inherent deficiencies. In my opinion the best means of dealing with monopolies is to remove the incentive for creating monoplies, which is the lack of purchasing power on the part of the general public. There is not enough money to go around. Therefore there is a mad scramble to get every dollar before the next man gets it and hence an incentive to buy up your competitor because of limited purchasing power. If there were purchasing power in circulation equivalent to the price value of goods, consumers would be able to buy everything that was produced, no matter at what price. Therefore everyone could stay in business.
Our Conservative friends have been advocating the removal of controls. They have been quite insistent about that and I have a
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great deal of sympathy with them. Personally I have not yet made up my mind completely on the subject, but if it leans in any way it is in the direction of removing controls. The problem my Conservative friends would be faced1 with is the problem I have outlined. Even though controls are removed, the system would not be self-liquidating. It does not generate enough purchasing power to buy back its own product. Merely lifting the controls in order that we may have great production is not going to solve the problem of distribution. Industry cannot bring about its own distribution. The system is not self-liquidating.
In conclusion, I should like to say a few words about the means of achieving this objective. The Minister of Finance suggested that we must strive for unanimity as to the means. I wish to indicate in what way I agree with the means being used and in what way I disagree. First, I wish to say a few words in connection with the dominion-provincial conference. From what he has said, the minister has left the impression that it would be impossible for the dominion to discharge its responsibilities as it should without securing greater taxing powers than it has. I am not familiar with all the details in connection with that, but as a general principle I would disagree.
The provinces have come in for a great deal of criticism and have been blamed for wrecking the conference. It all depends upon the point of view of the critic, whether he is a centralizer or whether he is a decentralizer. Anyone who believes in centralization will naturally blame the provinces, because he will want to see greater and greater controls at Ottaw'a in the central government. Those who believe in decentralization naturally want the rights of the provinces to be preserved. I suggest that the dominion does not require any additional pow'ers whatsoever to discharge all its responsibilities. I say the dominion has enough powers now under the British North America Act to discharge everyone of its responsibilities without expecting the provinces to surrender anything. I will go as far as to say that the dominion could carry out its obligations with respect to the people of Canada without any taxing power whatsoever except for the purpose of withdrawing redundant credits.
I know many will say that is taking in a lot of territory, but that is merely because they have a wrong conception of the purpose of money and of what the relationship of money to wealth ought to be. I say that if the dominion government would exercise the right which it has in connection with money

it could avail itself of all the money it needed. According to section 14 of the British North America Act, currency and coinage are a distinct responsibility of the dominion government. Instead of exercising that crown prerogative, the various governments of Canada since 1867 have delegated piecemeal this most sacred of powers to the private banking institutions.
On previous occasions I have quoted Abraham Lincoln on that score, and I should like to do so again in order to indicate the tremendous significance of the power which a government has when it exercises its authority over the creation and issue of money. Abraham Lincoln is credited wfith having made this statement:
The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of the government, but it is the government's greatest creative opportunity. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master, and will become the servant of humanity. Democracy will rise superior to the money power.
The important sentence is, "The privilege of creating and issuing money is not only the supreme prerogative of the government, but it is the government's greatest creative opportunity." If the dominion government were to retrieve that right and exercise it, the whole system of taxation could be abolished forever. If that were done there would be no need for centralization or nationalization and most of the problems would solve themselves automatically. I say the dominion government, by refusing to exercise this power and by not permitting the provinces to exercise their powers, is assuming a dog-in-the-manger attitude and one which certainly should not be tolerated in this country.
My final word, Mr. Speaker, is this. I suggest that we can agree on objectives nationally, provided that we accept the objectives which we suscribe for ourselves personally. If we do that, I believe that we can really unite on national objectives.


Mr. G. R. WEBB (Leeds):: Mr. Speaker, in expressing my views on the budget, after hearing a number of hon. members throughout the week, some praising and some condemning it, it is not my intention to praise it because I do not find enough in it to warrant praise. On the other hand, it is not my intention to condemn it in its entirety, although in many ways it falls miserably short of what was expected by the Canadian people in the way of tax relief.

The Budget-Mr. Webb
In this budget I believe that the minister has made a sincere if niggardly effort to apply modern thought to the use of taxation. By that I mean that the budget takes tentative steps at least to go beyond the traditional usages of raising money and influencing sentiment and support. It would almost seem that a gesture is being made to influence the country's economic trend and the financial position of the individual to counteract the inflationary tendencies which are now so evident. This, of course, I consider a step in the right direction in the use of taxation, and it is encouraging to see that the government leans that way, although, mind you, there is a very long way to go before this gentle sway becomes a marked movement or a definite policy.
Not being an economist or financier, I do not propose to deal in detail with much that calls for what might be called higher criticism of the budget. I leave that to those far better qualified than myself, and it has been done ably already by the hon. member for Muskoka-Ontario (Mr. Macdonnell) but as a business man I want to direct the attention of the government to certain matters of principle closely affecting, and effecting, our national welfare and individual living.
I suggest that our national problem is threefold, and that the government has done little or nothing to solve its three main parts. First, there is the urgent need to help primary industry, namely, agriculture, fishing, mining, lumbering and the like. Second, there is equally urgent demand for encouragement and incentives for secondary and processing industries which use the products of primary industries; for the services which depend upon the activity and prosperity of both these groups; for the business that devolves from them. Lastly, there is the uncertain position of the individual citizen whose whole life and future depend upon national prosperity based upon sound economic principles carried out through sensible policies.
Primary industry, to my mind, is the base of our national economy. Prosperous primary industry releases enormous potential buying power to absorb the output of industry, the functions of the services and the activities of business. It brings prosperity to the individual. As a representative of a constituency vitally interested in agriculture, I want, with reservations, to give some credit to the government for its recognition

belated and inadequate as this recognition is-of the need to give practical aid to farmers. It is at least a move in the right direction. The wealth of this country is directly founded on primary industries, of which agriculture is the most important part, for it supports
approximately one-third of the population- of this Dominion of Canada. Other primary industries support another great fraction. The secret of all-round national prosperity is to assure that the greatest buying power of those engaged in primary industry is released.
Hon. members may wonder why I am talking so much about primary industry and industry and business. I am particularly interested in it for various reasons. One important reason is that it employs so many individuals in this country and it is so important to their welfare. Business must be strong and secure. If the top gets too heavy for it, or if the foundation is insecure, the whole structure will collapse. Furthermore, any prosperity that is not built upon this basis, and is not in proper relation to it, will come tumbling about us, for it is unreal and false, and a dream from which there will come a dreadful awakening.
The primary industries of Canada receive nothing like a fair share of the national income. Those engaged in them work hard for long hours, and they work under conditions that would stimulate organized labour into general confusion. Yet, because they are conscientious, and because they have a sense of responsibility, those who bear the brunt of primary industry-yes, those who produce our real w'ealth-are left to fight the battle of life pretty much alone. They are practically forgotten so far as government assistance is concerned. Our basic industries, upon which Canada must build for the future, are penalized at every turn, and this budget does practically nothing to rectify the grave injustices under which they labour. What is even more important and tragic, there does not seem to be any real indication that the government recognizes the desperate seriousness of the situation as it affects Canada and every Canadian-.
I charge that the government has ignored the need to develop and assist primary industry, and that it has lamentably failed to use its taxing powers to build a solid foundation upon which to erect a secure and prosperous Canadian economy. It has done nothing to release the enormous buying power of those engaged in our basic industries. It has done very little to help those who produce our real wealth to attain better living standards and to have their fair share of the national income. I suggest that the little which has been proposed in this budget to better these conditions has been taken in a large measure from the politics and programmes advanced by the Progressive Conservative party, which has laid down as a fundamental principle that agriculture and primary industry generally
The Budget-Mr. Webb

must be encouraged and must be assured of their share of the national income. I can only hope that the government will find further inspiration in the policies of this party and will venture to do something realistic to support and encourage basic industry, of which agriculture is a most important part.
I have suggested that the government has done little for Canada's primary industries. If this be true, and I believe it to be, the government has certainly done nothing for the secondary and processing ones, for services and for business, which are a second part of our national problem. Nowhere in the budget can I find anything which is constructively helpful to business and industry. I must say this, that both business and industry must have encouragement to carry them through this critical period. We speak of this as a time of reconversion. This is a misnomer. We are not returning to pre-war status, and we shall never get back. We are in the throes of what might be termed a type of revolution. We are moving steadily away from the economic, social and political pattern of the past. The grave responsibility for the direction in which Canada moves rests upon the government.. I only wish that I could have more confidence in the skill and knowledge which chart our course. We need leadership as never before. We need a carefully thought out, coherent and coordinated plan, and this government has given us none of these. The government drifts with eveiy wind of temporary expedient to satisfy certain groups. There is no real programme or policy; and this budget is an example of its lack of intelligent planning. In this modem world, with its complexities and interrelated dependencies, there must be a plan to lead us and guide us. Nothing in national planning is of greater importance than taxation, properly used. It touches everyone. But the government i9 not using it intelligently. As I have already said, it has made only a nominal gesture toward helping primary industry. In fact, I cannot see where it gives any immediate help to industry and business at all.
As I see it at this time, secondary and processing industry, services and business generally, are hard hit and suffering from the unrest and insecurity inevitably attendant upon revolutionary changes in thinking and conditions. However, as good Canadians we must go on producing; our services must be maintained; business must be kept in motion; all must be given incentives to carry on until conditions stabilize.

I submit that the budget does not give this help. Instead, it maintains crushing taxation that is unrealistic and paralyzes production. It discourages venture capital, and I believe hon. members all know what I mean by venture capital. It handicaps business and industry against research and development. It is based upon the mistaken idea that all Canadian business has enormous reserves that will more than offset current losses due to the vacillating policies of the government. It would seem that the minister must be bewitched by the oft-repeated assertions of some hon. members who hold that to be a "capitalist" is to be a "millionaire", which, of course, is entirely wrong. This sustained crushing taxation is dangerous in the extreme, and it is made more so-and that is saying a very great deal-by the government's practice of yielding to pressure groups. Production is being paralyzed; venture capital is frozen; industrial growth is a gamble; export development, which is so important to us, is retarded; day-to-day living for individuals is uncertain; prices are rising. These are all directly attributable to the government's failure to have a policy and the courage to stick to it.
Mr. Speaker, I ask you, how can industry and business plan for the future when they do not know, or have no definite assurance of what lies ahead?
It is evident that the government 'has no real understanding of the situation and that it has no plan or programme. Loyal industry, and essential industry, are penalized. The budget does practically nothing for them. It even takes away the hope of making profits to recover losses.
I maintain that industry and business must have help and encouragement. Their tax burden must be lightened. They cannot go on operating under present unrealistic taxation and price controls. Production is blocked by the government's policies. If we had full production we should have less threat of inflation, because there would be an outlet for available money. There are too few goods for sale to-day. The solution is to have increased production and this solution is made impossible by the government's policies. Lack of production through present policies results in increased production costs, and in labour unrest and unemployment. Once industry and business fed that there is hope for the future ; when the government "gives the green light", production will increase and unit production costs will decrease. This will allow business to recover some of its present losses. At the same time-and this is most important-in-

The Budget-Mr. Webb
creased production will give wider employment and provide the real answer to labour unrest. Our national labour difficulties and problems are, to some degree, directly traceable to the government's policies toward all industry. To stifle production is to raise the banner of labour trouble; to speed production is to bring about industrial peace and understanding.
Many thousands depend for their livelihood, directly or indirectly, upon industry of one sort or another, and the stifling of production, due to present government policy, is jeopardizing their security and holds the menace of substantial unemployment. Returned service men and others, setting themselves up in business and putting their gratuities and savings into store rentals and other overheads, are finding themselves in an untenable position owing to lack of merchandise to carry on, through no fault of their own. Such a situation cannot continue; it simply leads to financial disaster.
Before leaving this subject, I want to emphasize one other point. This new era into which we are moving is one that demands research by industry to enable it to keep up with competition in the rest of the world. There is no industry that I know of that can go on in the same old rut and operate successfully. Research costs money and yet it is essential. Government policies are forcing these people to limit research, which simply means that Canada will, in the end, fall behind other countries or become somewhat of an economic dependency of those which have had the foresight to encourage research and industrial expansion. I cannot imagine that is what the government wants; and I give it credit for a greater sense of national independence.
The future of Canadian business is the responsibility of this government. I ask what it is going to do to help stabilize and promote our business and to provide incentives for expansion.
The failure of the government to take proper action to assist business in the broadest sense of the term will, inevitably, work hardship upon the average citizen whose living is dependent upon them. We are already caught in the outer whirl of a spiral of inflation that is lifting living costs and promises to lift them higher in spite of the government's fine sounding talk about price controls.
Speaking generally, I believe Canadians fall into three groups: (1) Those who have some control over their income through their association with organized labour or through their ability to negotiate individual wage increases; (2) those who are engaged in primary industry, of which agriculture is a most
important part, and are being penalized by the government and for whom little is being done; (3) those who live on so-called unearned income such as rentals, income from investments, endowments, pensions and the like. All stand to suffer from rising prices, and this fact is obviously recognized by the government by its action to raise the income tax exemption from S660 to $750 for single persons and $1,200 to $1,500 for married persons, effective in 1947. These exemptions should have been higher, and the best that can be said for this action is that it shows a realization that prices are on the upgrade-but it is only words. There is need for immediate help for individuals. This trivial increase in tax exemption will not help the individual taxpayer until he pays his 1947 taxes in 1948, which we must admit is extremely belated. It makes no special provision at all to help those who have no control over their incomes, which are steadily diminishing in buying power through no fault of their own. All these exemption increases could have been effected by sound government action in cutting unnecessary extravagance.
I should like to see how those who framed the budget would get along on the earnings of the average wage earner, out of which must be paid unemployment insurance dues, insurance, medical expenses, et cetera. What is there left to live on? It may be possible to eke out existence, but that is not living. What is there for recreation? For education of children? For savings against hard times? There is very little. Canadians are entitled to enough untaxed earning power to enable them to provide for some measure of self-security so that they can be free to build their own future and look forward to leisured, untroubled retirement on the results of their own work and thrift. As it is, this security, this living, is made well-nigh impossible because of the burden of taxation laid upon them.
Much has been said about security-the government saj^s that it provides security. And what a security 1 We are a free people, or at least supposed to be. We boasted of that during the war when, with that as theme, the government refused to inaugurate conscription of man-power. Now that we have peace, the government is ready to repudiate freedom, and force this free people to a very low level, dependent upon the red tape and bureaucracy of the government for doubtful security. Why should those among our people who work hard and honestly be compelled to sacrifice their own security so that those who are unwilling to work shall be looked after on an equality basis? This is neither justice nor democracy.
The Budget-Mr. Webb

I make special plea for those who are now living upon unearned income because they are the grain between the lower millstone of fixed income and the upper millstone of rising costs that bear down more heavily upon them all the time. I ask the government to think of the many thousands of such persons who are trying to maintain a decent standard of jiving in the face of inflationary price increases; of those who have looked forward to a time of leisure after years of battling and strife and economy; I ask the government to think of widows who are trying to raise their children as God-fearing citizens and in decent living standards; of the old; of so many who have no way to voice their plight and who are ridden over roughshod by a government that seemingly cares only for those who threaten action. Is this democracy when the quiet people are forgotten? Or is this an age of expediency when might is right and the only way to self-protection is by vociferous declamations.
Canadians deserve protection against rising costs. One way to give this is to raise the exemption for single and married persons respectively, and to correct the surtax level for unearned income. It is the least that the government can do.
It is vitally important that Canada maintain the standard of living of her people and not allow any section of the population to be dragged down. Our unearned income group is important to the country, and in all fairness to these people they deserve, and I claim for them, these exemptions.
As matters now stand, we penalize thrift and make retirement almost impossible. Yes, we penalize thrift. Maybe that is the underlying reason why the government does not practise economy itself. Certainly this budget does not show much evidence of economy and, looking around us, we still see government extravagance that knows no bounds.
Thrift is a principle of prosperity. The government preached thrift all through the war. Now let us practise it. One way to make our national revenues go farther is for the government to practise efficiency and economy within, by curtailing extravagance. Doing this would set an example to the country. But present government extravagance is only making conditions worse; it sets a bad example when it wastes money. If prices of essentials are to be held down, then let the government take a lead by holding down the cost, and price, of government. It is time that drastic action was taken to effect economies in governmental activities. Duplication of effort;
(Mr. Webb.]
multiplicity of commissions and boards; swollen staffs and all the rest of the extravagance found in government operation is being paid for by primary industry and the man on the street; by secondary and processing industry; by services; by business; by Canadian citizens-yes, paid for by everyone except the government that spends the money.
The budget that is presented to us should show economies in government operation; it should give help to agriculture and all primary industries, and assurance of a fair share of the national income; it should give incentive and hope to business and industry; it should relieve the tax burden from individual citizens. It should do these things. It does not do them, and I submit that, until it does, the government has failed miserably in its duty to the people of this Dominion of Canada.


Mr. WILFRID GARIEPY (Three Rivers) (Translation):: Mr. Speaker, I rise to participate in the budget debate owing to the nature of the discussion and in view of the right I have to submit my ideas on the various propositions that are now before the house.
Speaking for the first time in this parliament, I deem it proper to use my mother tongue. I believe it is not too late to tender congratulations to you, Mr. Speaker, and to your assistant the honourable member for Brantford City (Mr. Macdonald) on your elevation to the posts you now respectively occupy and on the admirable manner in which you are discharging your functions.
The clerk of the house is not here at the present time. I should have liked to tell him that I think I voice the feelings of all the honourable members in complimenting him for being so hale and hearty, in spite of the fact that he has recently reached the age of seventy. Doctor Beauchesne is a credit to this parliament ; he is a credit to his race, because he has succeeded in mastering all the intricacies of parliamentary science, and has become an authority on British institutions. I say that without any hesitation for quite a long time ago, we both graduated together from the same college. Here is a further coincidence: one of my fellow students at the law school of McGill university, Hon. Justice Thibaudeau Rinfret, recently came to this building in order to give the royal assent to certain bills, as substitute for the governor general.
I take pleasure in mentioning these names because a dishonest campaign, waged both in the press and by public speakers, seems to be seeking to spread in my province the belief

The Budget-Mr. Gariepy
that in the capital of Canada, one element only has its say; that the civil servants all come from only one province, only one race; however, when one takes pains to look for them, one finds French Canadian names everywhere such as, for example, at the supreme court, Hon. Justice Robert Tasche-reau; at the exchequer court, Hon. Justice E. R. Angers. This morning I went to the printing bureau. There, I found a former citizen of Three Rivers, enjoying the status of deputy minister, Mr. Edmond Cloutier. There is also Mr. Jules Castonguay, director general of elections; Mr. Felix Desrochers, parliamentary librarian, another of my fellow-citizens, born a short distance from Three Rivers; Mr. Gustave Lanctot, dominion archivist, a deserving and talented historian; Mr. Arthur Thivierge, member of the civil service commission; Mr. J. E. St. Laurent, at the national harbours board; Mr. Georges Bouchard, joint deputy minister of agriculture.
Mr. Speaker, this list of mine is possibly incomplete but the war having come to an end a year ago, and now that we are reorganizing the economy of the country, I trust that this government will see its way clear to appoint more of our people as deputy-ministers, or to spending departments, that, have to do with management, with the spending of public moneys and with construction.
I must however pay particular tribute to the right hon. prime minister, Mr. Mackenzie King, as Secretary of State for External Affairs, for his recognition of our people's ability by appointing, for instance, former Justice Alphonse Turgeon ambassador to Belgium; Me. Jean Desy to Brazil, Major General LaFleche, former minister of National Defence, ambassador to Greece; Mr. Henri Laureys, a most worthy Montreal teacher, to Peru; Mr. Pierre Dupuy, another fellow-citizen of note, ambassador to Holland; General Georges-P. Vanier to old France; and Mr. Emile Vaillancourt, our friend of the good old days, to Cuba.
All of them owe their appointment not to favour but to their ability, their qualifications, their grasp of the day's problems. They have been appointed by the government to represent us throughout the world. I am proud of it and I wish to remind my province that under the present system, our leader, are imbued with the spirit of freedom rather than ostracism. When our own people possess the required qualifications, they are placed at the helm without hesitation.
In this connection, Mr. Speaker, I wish to mention a particular matter. I come from the riding of Three Rivers. The city bearing that name was the second town founded in America. It is the most French in the world. Being catholic, its people follow the teachings of His Holiness the Pope, who was a guiding light during the war years and is now a beacon in peacetime, whose efforts tend to solve the grave differences arising at present. Moreover, he is a temporal ruler since the settlement with Mussolini on the question of authority. Therefore, I believe the time has come for Canada to send a representative to Rome, according to the example set by a great many nations throughout the world.
Incidentally, I wish to hurt no one, but my next observation may be rather unpleasant. This is a free country, and I do not intend to prevent civil servants from expressing their opinions, acting as they see fit, or defending their ideas. I wonder, however, if it is fitting to use my money and the taxes which I pay as well as those which are collected from my fellow citizens to pay the salary of a deputy minister who as lecturer and propagandist, disseminates throughout the country and even across the continent opinions and ideas contrary to all that we hold dearest and for which my conscience has but the deepest contempt. He is entitled to do as he pleases, but is there no limit beyond which civil servants are prohibited to behave as Doctor Chisholm has done recently? Since we are .discussing the budget and the spending of public money, we must as far as possible use Canadian funds to pay those who serve the country, and I hope that the government will appoint Doctor Chisholm to some post other than that of deputy minister in the department of health.
I would refer now to a law passed a few days ago which was submitted to us by the Minister of Labour (Mr. Mitchell) whom I deeply admire. I knew him in years gone by, before he became a member of the cabinet, even before he became a member of parliament. As a matter of fact, he never considered at that time the possibility of entering public life. By his own means and by his own talents, he has risen to an important position wThich commands the respect of all. Well, I ask the Minister of Labour not to crush the present unemployment insurance commission. I asked him not to dismiss its chairman, my fellow citizen, Mr. J. A. Trottier, who has always performed his duty conscientiously. He has always treated the public

The Budget-Mr. Gariepy
fairly and courteously, and he deserves a great deal of consideration. I trust that there will be no change in the set-up of that board.
I apologize for mentioning such matters, but it must be borne in mind that I belong to a minority and by their very nature minorities are timid and fearful. Indeed when the rights of a minority are encroached upon, it is lost forever, unless unforeseen circumstances enable it to recover the lost ground. We are compelled to fight inch by inch and foot by foot to defend the little we have preserved.
I notice that some hon. members seem surprised. They recall-as stated in the parliamentary guide-that I was elected as an independent, with the clear-cut explanation that I was of the Liberal school, that I was steeped in the Liberal tradition, and that I was in principle favourable to the government of the right hon. the Prime Minister (Mr. Mackenzie King). There are two kinds of independent members in this house: the independent members who always vote against the government of the right hon. the Prime Minister, and the independent members, like myself, who are ready to follow Mr. King as long as Lauder's pupil remains faithful to the programme, to the teachings and to the principles of Laurier, whom I have loved as a father and as a leader.


Mr. DORION:: Will the hon. member permit a question?


Wilfrid Gariépy: Yes.


Frédéric Dorion: Could he name independent members who always vote against the government?


Wilfrid Gariépy: Will you please repeat your question?


Frédéric Dorion: The hon. member should give the names of those independent members who always vote against the government.


Wilfrid Gariépy: You are one of them.


Frédéric Dorion: Mr. Speaker, I rise to a point of order. Everyone knows, and particularly the hon. member for Three Rivers, that what he has just said is false.


Wilfrid Gariépy: Mr. Speaker, such a debate will not enlighten anyone. The opinions and the conduct of the hon. member for Charlevoix-Saguenay (Mr. Dorion) are known throughout the country. I do not hide my own views;
I often spoke about pationalism and I do not repudiate it for it is a doctrine which has its good points. Nationalism never hurt the country, except once in our history. That was in 1911, when the so-called nationalists stabbed Laurier with the help of the Toronto Tories'
[Mr. Gariepy. 1
finance, thereby disastrously concluding an alliance against the prosperity, the development and the progress of this country.
To my mind, the ideas of the official opposition party are unsound. They wish to Cana-dianize the province of Quebec, as their leader (Mr. Bracken) has said. We have no need of such a doctrine to be Canadians. We have for a long time been and we are still Canadians. Speaking in Quebec, the leader said, "Give me a Cartier." Quebec will answer, "Give me a Sir John A. Macdonald." Men like Macdonald and Cartier no longer exist. The Progressive Conservative party's doctrine reminds me of a crazy quilt. It is a mixture of an imperialism and a nationalism of doubtful qaulity, of a narrow provincialism and extremes of various kinds, that is somewhat similar to a Ku Klux Klan because I have often heard it said that the Anderson government in Saskatchewan was partisan of those who form to-day His Majesty's loyal opposition. For the benefit of those who would like to know what that means, I shall refer to the July 10, 1946, issue of La Presse where a correspondent from Quebec who visited Saskatchewan, wrote as follows:
In Saskatchewan the French Canadians have had to endure vexatious measures under the Anderson government, besides other difficulties preceding and following their enforcement. ; US'.. .e laws of that province forbid members of religious orders, both men and women, to wear religious habits or any religious emblems: they forbid the hanging of crucifixes on class room walls; they allow the teaching of French for a period of one hour a day only and merely permit that catechism be taught, one half-hour after school hours, when the pupils are tired and inclined to pay the least attention to the instructions.


Mr. HEON:: Would the hon. member allow me to ask him one question?


Wilfrid Gariépy: Yes.


Georges-Henri Héon: Has any government of Saskatchewan, which succeeded the Anderson administration, changed the situation mentioned by the hon. member?


Wilfrid Gariépy: Mr. Speaker, I shall not waste what little time I have in discussing other matters. I have but a few moments left to utter my remarks on federal policies and I cannot use part of them to answer the question that has just been asked. I shall merely add that to my mind the habit of a sister of charity, the cassock of a priest, are just as sacred as the uniform of a nurse of the Victorian Order or the uniform of a British soldier.
In the province of Quebec we were faithful to the teachings which were instilled into us in so far as communism is concerned. In our

The Budget-Mr. Gariepy
universities and our schools, long before the recent events took place, we had erected a bulwark against that nefarious doctrine. I have in my newspaper clippings an article which appeared in the Montreal Gazette, the Tory sheet of Montreal, lauding Stalin, Russia's hero.
In keeping with those teachings, our province, once war had been declared, held fast and accepted all sacrifices in men, in munitions, in food and in money. In my modest town of Three Rivers all victory loans exceeded their
objectives. Everyone, the rich as well as those of average means, responded to the appeal. In regard to the war itself, my youngest son volunteered and spent five years overseas, under enemy fire. We have accepted all that, Mr. Speaker.
(On motion of Mr. Gariepy the debate was adjourned).


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