1948-03-22

Mr. T. J. BENTLEY (Swift Current):: Mr. Speaker, on a question of privilege, I find on my desk an apple under which there is a card bearing the following words:
You have tried the rest;
Now try the best.
I want to point out that the best apples come from Annapolis Valley, Nova Scotia.


Mr. A. E. ROBINSON (Bruce):: I rise to a question of privilege, Mr. Speaker, affecting not only every member of the house but the nation as well. It is national in scope. We have before us some wonderful apples with the compliments of the member for New Westminster (Mr. Reid). I take exception to one line that appears on the card accompanying these apples, and that is that they come from Canada's premier province. I think it is well understood that Bruce county is the leading county of the best province.


Mr. REID:: May I suggest, Mr. Speaker, that you pay no attention to the jealousy exhibited today. So far as apples are concerned, hon. members have the best before them.


Mr. MAYBANK:: Mr. Speaker, when I get an apple for nothing I believe everything that is on the card.



MR. D. G. ROSS-NATIONAL HOCKEY LEAGUE- TORONTO MAPLE LEAFS

[Stage Direction]
Mr. DOUGLAS G. ROSS (St. Paul's): Mr. Speaker, on a question of privilege, I was wondering if the Prime Minister recognized the fact that another layer of gold had been placed on our maple leaf by the Toronto Maple Leafs and the Montreal Canadiens. I want to bring to the attention of the house the fact that "Elmer Lach des Canadiens de Montreal a gagne le titre de meilleur comp-teur de la ligue nationale" and also that Turk Broda from the Toronto Maple Leafs won the goalkeeper trophy. My question of privilege is this: Some people think that Turk
Broda, Connie Smythe and Sylvanus Apps are foreigners. I wish to correct that and tell you that in spite of the fact that Syl Apps has been reported by the papers as coming from Paris, France, it is Paris, Ontario. Turk Broda, Connie Smythe and Sylvanus Apps are all Canadians and Progressive Conservatives.

Mr. E. G. McCULLOUGH (Assiniboia):: Mr. Speaker, I rise to a question of privilege. Yesterday I received from the office of Doctor Beauchesne a letter enclosing a second one to Saint Peter, addressed to heaven. My point is that I am not Saint Peter and my address is not heaven.
Mr. CRUICKSHANIv: Never will be.


Edward George McCullough: I want
the house to understand that no discourtesy was meant by the Clerk of the House in choosing to send the letter to me rather than to some other member. I intend to send the letter to the Prime Minister in the belief that he may be the person to whom it was meant to be forwarded.



MR. MAYBANK-WHEAT BOARD ACT-REFERENCE TO MOTION FOR INSTRUCTION TO COMMITTEE OF THE WHOLE

Ralph Maybank: Mr. Speaker, I rise to a question of privilege. In Votes and Proceedings, and I have no doubt in Hansard as well, my name is left off the list of those who voted for the motion of the Minister of Trade and Commerce (Mr. Howe) that it be an instruction to the committee of the whole that they have power to divide Bill No. 135 into two bills. I did vote for that motion, and the fact is not recorded.


Mr. GORDON GRAYDON (Peel):: Mr. Speaker, I rise to a question of privilege which affects every member of this house and which is both serious and far-reaching. On Friday last the Minister of Trade and Commerce (Mr. Howe) made an important motion arising out of a previous government undertaking he had given to this ho-use with relation to the government's wheat measure. As he moved it another cabinet minister declined to be its
Privilege

seconder. When the vote was taken only two out of a cabinet of eighteen supported the government motion. My question of privilege is this: Cabinet solidarity is a keystone in the very arch of responsible democratic government. Through it the people of Canada have the right to believe that they have assurance that when a member of the government says a thing is going to be done, then in fact it will be done-


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: The hon. member should not make a statement. I would ask him to state the question of privilege.


Gordon Graydon: I am now stating the question of privilege, Mr. Speaker, and I think I should have the right to proceed with it. Cabinet solidarity is a keystone in the very arch of responsible democratic government. Through it the people of Canada have the right to believe that they have assurance that when a member of the government says a thing is going to be done, it in fact will be done, and that nothing short of the defeat of the government and its consequent resignation will prevent that government promise from being carried out. That democratic guarantee was thrown to the winds by cabinet action last Friday, and I want to protest that action with every bit of vigour and earnestness at my command.


Some hon. MEMBERS:: Order.


Gordon Graydon: This kind of thing-


An hon. MEMBER:: He has made his speech.


James Horace King: I would point out to the hon. member that he has stated his question of privilege and he should be satisfied.


Gordon Graydon: Mr. Speaker-


James Horace King: It is against the rules that a member should use a question of privilege to criticize one side or the other.


Gordon Graydon: It is not a question of criticizing one side or the other. This would apply to any government no matter what it may be. I wish to conclude by saying that this kind of thing, if continued, will go far to shake the parliamentary foundations of our way of life-


Some hon. MEMBERS:: Order.


Gordon Graydon: -when that way of life is being seriously challenged by other forces whose avowed object is to destroy it.


Some hon. MEMBERS:: Order.


Gordon Graydon: I am not at all concerned with those political disc jockeys over there.



UNITED NATIONS


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): I am now in a position to supplement the information I gave on March 10 regarding recent developments in the work of the united nations temporary commission on Korea and the position taken by the Canadian representative, Doctor Patterson.
We have now received a full report from Doctor Patterson on what happened. It appears that as the March 1 anniversary of the 1919 declaration of Korean independence drew near there developed a strong undercurrent of demand among the Korean people for some announcement concerning their future to be made on that date. Accordingly members of the united nations commission then in Seoul discussed and agreed among themselves, and cleared by telephone with the commission chairman, Mr. Menon, then m New York, that the acting chairman, Mr. Liu, should make a public statement on March 1, saying that the commission would accept the advice of the interim committee to observe elections in south Korea. General Hodge proclaimed the date of elections for May 9 after Mr. Liu had made this public statement. Doctor Patterson, who was in Tokyo at the time, was not consulted, although he had left his telephone number with the principal secretary of the commission on his departure from Seoul, with the request that he be called should any important matter arise; nor was a regular commission meeting called in order to discuss the matter. Accordingly, at the next regular meeting of the commission Doctor Patterson, under instructions, drew attention to the irregularity of the procedure by which this important decision was reached. He pointed out that if the commission were to proceed in this manner its impartiality and authority as a properly constituted united nations commission would be undermined. As a result of this intervention the commission re-examined the whole position very carefully in several days of private discussions and at the end decided that there should be a formal vote to record the position taken by each member.
On March 12 the commission formally decided "to observe elections announced by

United Nations Commission on Korea
the commanding general of the American forces to be held on May 9, 1948, provided that it has ascertained that the elections will be held in a free atmosphere where democratic rights of freedom of speech, press and assembly will be recognized and respected". The vote in favour of this resolution was 4 to 2, with Canada and Australia against, and Syria and France abstaining. In voting on this resolution the commission in effect recognized the validity of Doctor Patterson's objections to the irregularity of the earlier informal agreement to observe elections. I think that the importance which the Canadian representatives on the interim committee of the general assembly and the united nations temporary commission on Korea have attached to united nations bodies observing proper constitutional procedures has made a valuable contribution to the work of the united nations.
The reports in the press that Doctor Patterson had walked out of the commission were incorrect and misleading, both to the Korean people and to persons abroad. When the commission decided to observe elections in that part of Korea accessible to it, Doctor Patterson cabled us for further instructions. Pending the receipt of these instructions Doctor Patterson, as was only right and proper, informed his colleagues on the commission that he would not be able to take an active part in the work of the commission until he had received further instructions from Ottawa. He has continued to attend the meetings of the commission, nevertheless.
Doctor Patterson has presented the views of the government on the commission faithfully and well under difficult circumstances. His experience and knowledge of the Far East have enabled him to give us sound and helpful reports on the background of developments in Korea.
The government has decided that it will not be necessary to recall Doctor Patterson for consultation, because he has been able to send us a very full account of what happened. Instructions have been sent to Doctor Patterson authorizing him to continue to serve with the commission, because the commission conceives its duties to be to observe, consult and advise Koreans and the United States military government authorities regarding the conduct of these elections; but the responsibility for running the elections rests with the United States military government authorities and any action towards the establishment of a government in Korea following the elections will not be on the strength of the resolution
of the general assembly but on the legal position of the occupying military authorities. Further, the chairman of the Korean commission has drawn attention to the fact that the commission has the authority to withdraw at any time if it is not satisfied that it can perform a useful function in remaining in Korea to observe the manner in which the elections are to be held.
Gordon Graydon: Do I take it from the minister's statement that the elections will be held under the auspices of the United States occupying forces rather than under any organ of the united nations? Is that the point?
Mr. ST. LAURENT: The proclamation fixing the date for the elections and the legal basis on which the elections are being held are the acts of the military authorities and not as we first understood, namely, that an attempt would be made to have it appear that they were being held under authority derived from the resolution of the general assembly which provided for an election for the whole of Korea and not for only one part thereof.



INVESTMENT AND CONSTRUCTION


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: I desire to lay on the table two documents. The first is entitled "Private and Public Investment in Canada, Outlook 1948", and the second deals with "Production of Basic and Building Materials in Canada, Outlook 1948". They were prepared by the economic research branch of my department. The French text of these two papers will be available as soon as the translation and printing are completed.
The first paper is a forecast of the likely volume of investment based on returns from some 13,000 business establishments and institutions and information supplied by governments, federal, provincial and municipal. The outstanding feature of the report is the fact that it indicates for 1948 a capital program of $2-8 billion, the highest in Canada's history. If realized, this will be about 17 per cent in excess of the S2-4 billion spent in 1947, although somewhat less than 5 per cent more in volume. The program involves an anticipated $1-6 billion on new construction and SI * 2 billion on new machinery and equipment, representing increases of 21 and 12 per cent respectively over 1947 levels.
The second paper, based on production plans of Canadian business, indicates that output of
Senate Bills

eight out of nine basic materials is expected to be maintained during 1948 at the high levels achieved in last year, while in the ninth, coal, an increase in volume of 15 per cent is anticipated. Production of thirty types of building materials show further improvements for 1948, with increases of over 20 per cent indicated for bathtubs, steel pipe and fittings, gypsum plaster, gypsum lathe, rock wool batts and construction tile. Smaller increases are expected for all other items except for two, where decreases are anticipated.


Mr. LOCKHART:: Are they unit increases or just value increases?


Mr. HOWE:: Unit increases.



SENATE BILLS


[Stage Direction]
Bill No. 149 to amend the Animal Contagious Diseases Act.-Mr. Gardiner.
Bill No. 150 to incorporate the Canadian Veterinary Medical Association.-Mr. Charlton.
Bill No. 151 to incorporate The National Insurance Company.-Mr. Maybank.
Bill No. 152 for the relief of Rose Landes Clopoff.-Mr. Maybank.
Bill No. 153 for the relief of Micheline Desautels Dooney.-Mr. Maybank.
Bill No. 154 for the relief of William Roydon Slator.-Mr. Maybank.
r Bill No. 155 for the relief of Marie Eva Thibodeau Buelow.-Mr. Maybank.
Bill No. 156 for the relief of Margaret Sleno Staines.-Mr. Maybank.
Bill No. 157 for the relief of Jean Hume Munro Auburn.-Mr. Maybank.
Bill No. 158 for the relief of Gillies Henault. -Mr. Maybank.
Bill No. 159 for the relief of Edward Gordon Jakeman.-Mr. Maybank.
Bill No. 160 for the relief of Kathleen Mc-Keown Stevenson.-Mr. Maybank.
Bill 'No. 161 for the relief of Alice Mary Gallant Currie.-Mr. Maybank.
Bill No. 162 for the relief of Muriel Frances Marks Buchanan.-Mr. Maybank.
Bill No. 163 for the relief of Leona Selma Cutway Hall-Mr. Maybank.
Bill No. 164 for the relief of Avery Patricia Gill Reinhold.-Mr. Maybank.
Bill No. 165 for the relief of Poppy Catherine Hayakawa Smith.-Mr. Maybank.
Bill No. 166 for the relief of Dolores Margaret Paul Warner.-Mr. Maybank.
Bill No. 167 for the relief of Norma Bernstein Levee.-Mr. Maybank.
Bill No. 168 for the relief of Eileen Sophie McNamara Sepchuk.-Mr. Maybank.

Bill No. 169 for the relief of Mary Rowan Young Conway.-Mr. Maybank.
Bill No. 170 for the relief of Ethel Margaret Tweddel Cartmel.-Mr. Maybank.


[Stage Direction]
Hon. COLIN GIBSON (Secretary of State) moved that the house go into committee at the next sitting to consider the following resolution :
That it is expedient to introduce a measure to amend the Dominion Elections Act, 1938, to make provision inter alia for an increase of salary to the chief electoral officer.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: In view of the statement by the United States with respect to the partitioning of Palestine, can the Secretary of State for External Affairs inform the house what attitude Canada is taking under the changed circumstances? The minister may not be prepared to make a statement today, but I think it should be made as soon as possible.
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): All I can say is that with the advisers of the department I have been giving very careful consideration to the developments which have taken place.
I have prepared recommendations to be submitted to my colleagues, but until they have been considered by them there is nothing more I could state to the house as a decision.


[Stage Direction]
On the orders of the day:
Gordon Graydon: I take it the government has been made officially aware of the joint announcement of declaration by the United States, Great Britain and France proposing to the Soviet Union that the free territory of Trieste be returned to Italy. If so, is it the intention of the government to support the objectives set out in this declaration? .

Inquiries oj the Ministry
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The government has been informed that on Saturday the governments of the United States, the United Kingdom and France issued a statement the first part of which said:
The governments of the United States, the United Kingdom and France have proposed to the governments of the Soviet Union and Italy that those governments join in an additional protocol to the treaty of peace with Italy which would place the free territory of Trieste once more under Italian sovereignty.
This has been communicated to us, and so far the Canadian government has made no comment.



FLAXSEED


[Stage Direction]
On the orders of the day:
Mr. J. A. ROSS (Souris):: In reply to my question on March 9 of this year, at page 2006 of Hansard, the Minister of Trade and Commerce said:
I think I can promise that a price for flax will be set at least as soon as the house authorizes the government to pay the participation certificates on the present wheat contract.
Will the minister now say what is to be the price of flaxseed for the 1948 crop? The farmers are becoming anxious.


Charles Edward Rea: I shall endeavour to announce it tomorrow.



SOCIAL SECURITY


[Stage Direction]
On the orders of the dar-:
Mr. STANLEY KNOWLES (Winnipeg North Centre):: In view of further press reports concerning a contributory old age pension plan and national health insurance, will the government consider laying its tentative proposals either before the house in the form of a white paper or before a committee of the house, so that action in connection with these and other items in an over-all security program1 might be expedited?


Hon. PAUL MARTIN (Minister of National Health and Welfare):: The hon. gentleman asked me a question some weeks ago which, though not entirely the same, was the same in part. I have nothing further to add to what I said at that time.


Stanley Howard Knowles: That is still nothing.



REQUEST FOR STATEMENT OF GOVERNMENT POLICY ON OLD AGE PENSIONS

[Stage Direction]
On the orders of the day:
Mr. J. 0. PROBE (Regina City): I should like to direct the following question to the Minister of National Health and Welfare. Does the federal government accept the principle that it is now responsible for one hundred per cent payment of all old age pensions at the age of seventy, based on a means test; or does it adhere to the principle that it will pay seventy-five per cent of old age pensions authorized in each province by that province-
Some hon. MEMBERS:: Order.


James Horace King: Order.


Mr. PROBE:: -or has it a policy of a base pension-


James Horace King: Order.


John Oliver Probe: -to which it contributes a fixed proportion-


James Horace King: Order. I would call the attention of hon. members to the fact that there is a rule providing that when the Speaker rises the hon. member who has the floor should resume his seat. The excuse of hon. members is that they do not hear the Speaker. If they would follow another rule, which states that an hon. member should address himself to the Chair, they would see and hear the Speaker when he rises. In this case I believe the hon. gentleman should observe the rule which says that when a question is lengthy it should be placed on the order paper.



COMBINES ACT


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I should like to direct a question to the Minister of Justice in connection with the withdrawal from the jury on Thursday last of the charges against eighteen dental firms in connection with restraint of trade proceedings under the Combines Act. The question is, who was responsible for the failure of the crown to prove obvious, necessary and salient facts to such an extent that the judge said there was no case to go to the jury?


Right Hon. J. L. ILSLEY (Minister of Justice):: Mr. Speaker. I regard the hon. gentleman's question as quite improperly expressed. I regard it as making a statement to the house of what he alleges to be facts but what I do not admit to be facts. I will give an answer to his question tomorrow, but I will take the opportunity to restate his question.

Inquiries o/ the Ministry


John George Diefenbaker: It is a costly
debacle.


Major James William Coldwell: I should like to ask a supplementary question. Is this decision appealable? If so, is the government going to appeal it?


James Lorimer Ilsley: I have not had an opportunity to go into the matter of deciding whether it will be appealed or not. But I was informally given to understand that it is appealable.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. J. M. MACDONNELL (Muskoka-Ontario):: Mr. Speaker, I wish to make a further appeal to the Minister of Finance following one or two I previously made to get an answer to a question I asked some weeks ago. It was passed as an order for return on February 11. I asked the minister for his assistance, which he said he would give. The question has to do with investments by the Bank of Canada. I am beginning to wonder- and I do not suggest that the Minister of Finance has anything to do with it-that the answer is being withheld.


Hon. DOUGLAS ABBOTT (Minister of Finance):: Mr. Speaker, I think that is an unfair inference for my hon. friend to draw. I made inquiries immediately after his question the other day, and was told that the information would be ready within a few days. This involves a return from different departments, and does not involve only the Bank of Canada. This matter has to do with the investment of all government funds. I hope it will be ready today or tomorrow. I thought it would be ready today. This question has considerable detail in it and will be put in just as soon as the information is available to the department of the Under-Secretary of State.



GRANTS TO PROVINCES FOR EDUCATIONAL PURPOSES

[Stage Direction]
On the orders of the day:
Mr. RONALD MOORE (Churchill):: Mr. Speaker, I should like to ask a question of the Secretary of State. Some time ago Tasked a question on the order paper as to what grants had been allotted by the government for educational purposes to the provincial governments, other than Manitoba. This question was passed as an order for return on February 25. Can the minister say when I might expect an answer?
fMr. Ilsley.]


Hon. COLIN GIBSON (Secretary of State):: Mr. Speaker, I cannot say when the answer will be ready. I shall make inquiries and let the hon. member know when it will be available.



RAIN MAKING


[Stage Direction]
On the orders of the day:
Mr. MAX CAMPBELL (The Battlefords):: I should like to ask a question of the Minister of Reconstruction and Supply. Is the national research council or the meteorological service conducting experiments in rain making, and if so, will the minister keep the house informed as to results obtained?


Clarence Decatur Howe: The national research council has been conducting laboratory tests in the use of dry ice for rain making, if one wishes to call it that, for a considerable length of time. It is the intention during the next summer season to conduct aerial tests on a large scale.


Mr. MANROSS:: I wonder if the minister would consider experimenting somewhere other than western Ontario.



RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens): I should like to ask a very important question of the Minister of Transport. Has the minister received information by letters and telegrams from shippers and farmers with respect to the great shortage of refrigerator cars for potato shipments from Prince Edward Island?
Hon. LIONEL CHEVRIER (Minister of Transport):: I do not know that there is any urgency in the question the hon. member has put. I have no recollection of having received information to that effect. But I will tell him that less than a week ago I made a statement in the house that there were more than 250 reefer cars on Prince Edward Island at that time. The position today is that there are approximately a thousand cars more shipped than were shipped out of Prince Edward Island at the same time last year.


Mr. McLURE:: I have this supplementary question. I hold in my hand a copy of two letters-


Clarence Decatur Howe: That is not a question.

Inquiries oj the Ministry


Winfield Chester Scott McLure: -addressed to the Minister of Transport. If he has not the information they could be put on the record.



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
Charles Edward Rea: Mr. Speaker, on Thursday last the hon. member for Winnipeg North Centre (Mr. Knowles) asked a question with respect to the regulations concerning radio interference by eleetrotherapeutie equipment.
The answer to the first part of the question is, yes. Consideration has been given to the request of the Canadian hospital council. The answer to the second part of the question is that the regulations in question were passed by order in council on January 22, 1941, to be effective on February 8, 1941. The application of these, in so far as eleetrotherapeutie equipment is concerned, was postponed nearly seven years to January 1, 1948, owing to a shortage of supply of material and equipment. The question of a further postponement has now undoubtedly been raised by reason of action in the United States where a five-year period of grace has been given. It will be noted that the similar period of grace in Canada has been seven years. There is an outstanding difference, however, in the interference caused by this equipment in the two countries. In the United States a large part of transmitting equipment is very high powered and is not affected to as great an extent as in Canada, where the greater part is of a much lower power.
Interference by the operation of this equipment is a serious matter in radio communications in Canada unless adequate means are employed to control the radiation. Safety radio services, such as aids to air and marine navigation, police and fire department radio, are frequently blotted out by radiation from diathermy machines at distances of hundreds of miles. A further period of grace in this matter of suppressing this type of interference would delay the proper development of these and other high frequency services.
While it is proposed therefore to enforce the regulations effective January 1, 1948, I would point out that the inspectors of the radio branch of the Department of Transport have done nothing to disrupt existing operations where interference is not being
encountered. However, where interference is found, operators of this type of equipment will be required to install the necessary shielding if the equipment is to continue to be operated.


Mr. ROSS (St. Paul's):: Has the report the minister has just made anything to do with the difference in cycles between Ontario and other parts of Canada? The minister shakes his head. I should like to know whether he says yes or no.


Clarence Decatur Howe: The answer is no.
Mr. RObS (St. Paul's):	Then I have
another question. Why is it that we find a different situation in the United States from that which we have in Canada?


Clarence Decatur Howe: I gave that information in the statement I have just given. If the hon. member will consult Hansard he will find that the question is fully answered.


Mr. J. H. HARRIS (Danforth):: I should like to put a question to the minister who a moment ago answered an inquiry with regard to radio, but I do not know just how to address him. I might call him the minister in toto, or the Minister of Trade and Commerce or of everything.


Clarence Decatur Howe: Is this a question. Mr. Speaker?


Joseph Henry Harris: With regard to members of the medical fraternity in small towns who are operating eleetrotherapeutie machines which are causing radio interference, will the minister give them time to replace the machines which are banned by this order? Most of these machines come from the United States, and there is quite a shortage of them at the present time. To issue an ultimatum against their use because of radio interference would put many practitioners throughout Canada out of business.


Charles Edward Rea: Full consideration has been given to the situation, and I am told that no action is being taken which will interfere with the work of hospitals provided that the management of the hospitals give full consideration to the requirements of the department.


Joseph Henry Harris: I was not referring to hospitals but to individual operators in clinics in small country towns throughout Canada.

Inquiries of the Ministry



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Right Hon. L. S. ST. LAURENT (Secrej tary of State for External Affairs):	Mr. Speaker, on the 19th instant the hon. member for Eglinton (Mr. Fleming) asked the following question:
When does the government intend to appoint and set up the national commission in relation to the united nations educational, scientific and cultural organization under the legislation that was passed two years ago?
May I point out that there is no specific reference to the establishment of a commission in the legislation that was passed approving the constitution of the educational, scientific and cultural organization. But there is in that constitution a clause as follows:
Each member state shall make such arrangements as suit its particular conditions for the purpose of associating its principal bodies interested In educational, scientific and cultural matters with the work of the organization, preferably by the formation of a national commission broadly representative of the government and such bodies.
It will be noted from this paragraph that the establishment of a national commission is not mandatory in any way. Unfortunately, for quite a considerable time now there have been problems which, without in any way detracting from the importance of UNESCO, have appeared to the department to be entitled to priority, and have prevented' full consideration being given to the appointment of this commission. In the meantime the department is providing the channel of communication between UNESCO and the various educational, scientific and cultural bodies co-operating with the government and with organizations in this country.
Major James William Coldwell: Can the minister say when we are likely to get a report on the consideration being given to the matter?
Mr. ST. LAURENT: I should like to be able to say that it would be very soon. I hope there will not always be problems which appear to be of greater immediate urgency than the formation of this commission. I hope it will not always be so. I am not in position to say to the hon. member how soon it will be possible to divert our attention from these other more immediately urgent problems.


Mr. FLEMING:: Would the minister be good enough to make one or two points clear?

It is not quite clear from his answer whether the government has' decided to set up or not to set up at some time or other the commission.
Mr. ST. LAURENT: The government has not decided not to set up or to set up at some time or other the commission.


Douglas Gooderham Ross: Apropos of what has just been said by the minister of external affairs, I should like to ask if the government has decided to be undecided.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Golding in the chair.
1. Effective on and after November 18, 1947, an excise tax of 25 per cent is imposed on the following goods:
(a)	The following electrical appliances: waffle irons; roasters; kettles; chafing dishes; juice extractors; coffee makers; toasters of all kinds; portable humidifiers; curling irons or tongs, hair dryers; permanent waving machines and spacers or clamps; rods and heaters therefor; razors and shavers; garbage disposal units;
(b)	The following electrical appliances when adapted to household use: food or drink mixers; food choppers and grinders; irons and ironers; vacuum cleaners and attachments therefor; floor waxers and polishers;
(c)	Electric or gas refrigerators or freezing equipment, and coils, condensing or compressor units, cabinets, boxes, evaporators and expansion valves therefor; all the foregoing when adapted to household or apartment use or when for use in places of entertainment, amusement or recreation, including rinks, auditoria, halls and clubs;
(d)	Firearms except for military or police purposes;
(e)	Outboard motors;
(fj Motorcycles, and all other two- or threewheeled motor-driven vehicles including motors for attachment to bicycles but not including vehicles specially designed for carrying goods or for use by invalids;
(g)	Projectors for slides, films or pictures designed for industrial or professional photographers' use;
(h)	Toilet articles of all kinds (including combs, mirrors and brushes other than tooth brushes or shaving brushes the duty paid value or the Canadian manufacturer's selling price of which combs, mirrors and brushes is more than twenty-five cents each) and which items do not already come within any other item in schedule one of the said act.
2. That on and after November 18, 1947, the rate of excise tax on automobiles adapted or adaptable for passenger use with seating capacity for not more than ten persons each, imported into or manufactured or produced in Canada be increased from ten per cent to the following rates, namely, on automobiles valued at $1,200 or less, 25 per cenit over $1,200 but not more than $2,000, 25 per cent on $1,200 plus

Excise Tax Act Amendment
50 per cent on the amount in excess of $1,200; over $2,000, 25 per cent on $1,200 plus 50 per cent on $800 plus 75 per cent on the amount in excess of $2,000.
3.	That on and after November 18, 1947, the rate of excise tax on phonographs, record-playing devices, radio broadcast receiving sets and tubes therefor, be increased from ten per cent to twenty-five per cent.
4.	That on and after November 18, 1947, the rate of excise tax on cameras, photographic films and plates, projectors for slides, films or pictures, except those designed exclusively for industrial or professional photographers' use, be increased from ten per cent to twenty-five per cent.
5.	That on and after November 18, 1947, electricity and gas used in dwellings be exempt from consumption or sales tax; and
6.	That on and after November 18, 1947, the excise tax of one cent per pound on sugar, grape sugar, glucose, sugar syrup, corn syrup, etc., be repealed.
James MacKerras Macdonnell: I want to be quite clear as to what we are talking about. My understanding is that the amendment moved on February 23 merely changes the articles to which clause 1 of the resolution applies.


Douglas Charles Abbott: That is correct.
Mr. MACDONNELL (Muskoka-Ontario); I have no objection to that.


Douglas Charles Abbott: The amendment has the effect of removing from the resolution as origin-ally tabled certain articles and rearranging the lettering of the various subheadings.


James MacKerras Macdonnell: Its effect is to take out certain taxable articles?


Douglas Charles Abbott: That is it precisely.


[Stage Direction]
Amendment agreed to.
Douglas Charles Abbott: The hon. member for
Muskoka-Ontario asked me to get some additional information as to the sale of *articles which are subject either to the new tax or to additional taxation, and suggested that I might be able to give that to him when we were in committee on the bill. I had hoped that I would have that information today, but the deputy minister of customs and excise expects to have some information tomorrow. The committee will appreciate that the departmental records do not indicate sales in a particular month; they indicate revenue collections in a particular month only. Over a long period of time no doubt they would be an accurate reflection of sales but over a short period of time they might be quite misleading because there would be
arrears of taxes coming in which might go-back as far as two or three months. As a result of inquiries of the manufacturers themselves who pay these taxes we hope to have tomorrow up-to-date data as to sales. This has necessitated going to the manufacturers and asking for sales reports. There are comparatively few of them so they are obtainable.
I should say that this relates particularly to the two large items of automobiles and radios. In the case of the smaller items like miscellaneous electrical equipment it will not be practicable to get sales figures.


Mr. McKAY:: Has the -minister any further statement to make with regard to lifting the excise tax on gas refrigerators?


Douglas Charles Abbott: There is no excise tax on kerosene refrigerators, although there may be on gas refrigerators. We have been giving consideration to establishing a quot-a under the other bill for the importation of kerosene refrigerators which are not made in this country. I have not given consideration as yet to removing the tax on gas refrigerators. There is no tax imposed on the Servel kerosene type of refrigerator.


Eric Bowness McKay: Has consideration been given to lifting the quota?


Douglas Charles Abbott: That is under active consideration now, but I am not in position to make a statement about it.


Major James William Coldwell: I am glad to know that-this is under consideration. Many people in rural districts have been wanting to get these for many years. Rural people are entitled to some consideration, particularly when they are deprived of -so many of the modern conveniences enjoyed in the cities.


Douglas Charles Abbott: I have written a number of letters to my hon. friend, to other hon. members and to the public, stating that consideration is being given to the matter, but I am not yet in position to state what quota if any we can establish.


James Arthur Ross: Is the 25 per cent excise tax on refrigerators applicable to those purchased by community hospitals?


Douglas Charles Abbott: The excise tax is applicable to refrigerators adapted to household use. Perhaps I had better just check on that. If the refrigerator was the type purchased by am institution it would not be subject to the tax which is imposed solely on the type of refrigerator adapted for household use. I should think that in many of these hospitals they would buy the commercial type of refrigerator.
Excise Tax Act Amendment


James Arthur Ross: I have had correspondence with distributors throughout Manitoba, and I will cite one case, that of a new hospital built by the community which purchased one of these refrigerators for its kitchen, and the wholesaler allowed a deduction of both the excise and the sales tax because it was for use in a hospital. The hospital decided it wanted another refrigerator for another floor to take care of its food, but in this case the wholesaler told them that the tax could be deducted only where the article was sold to a government-owned institution. This hospital is run in co-operation with the Manitoba government.


Douglas Charles Abbott: Provincial governments are not taxed under this measure. If my hon. friend will give me the facts I shall be glad to look into this particular case.


James Arthur Ross: I shall be glad to send them to the minister, because there does seem to be a misunderstanding.


Douglas Charles Abbott: I shall look into it.


Mr. TIMMINS:: Why are toilet articles costing more than twenty-five cents taken out of the schedule?


Douglas Charles Abbott: It is the other way round; toilet articles costing more than twenty-five cents are left in and are subject to tax. The exclusion was for this reason. It was found that the imposition of the tax on lower priced articles, particularly brushes and combs, created a completely distorted price range. It threw the thing out of line. The manufacturers and distributors of that type of article convinced me and my officials that the tax would create a completely distorted price picture. What we were attempting to get at was the higher priced fancy articles sold as gifts.


Park Manross: The minister's explanation seems hardly consistent. He objects to putting a 25 per cent tax on an article that sells for twenty-five cents, yet he put a tax of 40 per cent on something that sold for a nickel.


Douglas Charles Abbott: Soft drinks?


Park Manross: Right.


Harold Aberdeen Watson Timmins: The minister says that this tax was imposed for a number of reasons, and I should like to repeat the reasons he has given. First, he says the tax was not put on for taxation revenue primarily, but if there were some tax revenue, that would be welcome. Secondly, in an article in New Liberty a while ago he said that this tax, along with other taxes, was to plug a leak, the leak being, I suppose, the United States funds disappearing from our hands. Next he said it was to induce 
people to postpone buying; in other words to restrict buying. At another time he said it was to discourage imports from the United States, and finally he said it was to withdraw purchasing power.
Turning now to toilet articles which cost more than 25 cents, dresser ware, and so forth, the minister knows there has grown up in this country over a period of forty years a plastics industry. Some firms do nothing but manufacture and sell plastics, marketing them not only in Canada but in South Africa, India and other parts of the world. For the life of me I cannot see how any one of the explanations for this tax given by the minister in any way helps our economy, whereas the tax most certainly bludgeons this particular industry out of existence. The industry uses probably only eleven per cent of United States content. Most of its component parts are obtained in Canada. That was not so a few years ago, but it is so now. The chemicals, bristles, and so forth, that go into the manufacture of these articles are made in Canada. I ask the minister if eleven per cent of United States content is of sufficient importance to murder this industry which has been functioning in Canada for forty years. The minister has already learned from one or two of these firms how serious the situation is.
On the other hand, under the exchange conservation bill, the Minister of Trade and Commerce has the say as to what goods may be imported and what United States content they may have, and his idea may be entirely different from that of the finance minister Surely trade and commerce is the lifeblood of this country. I suggest to the minister that this is not the proper way of handling our business.
One more thing. The minister suggested that this was a temporary measure. I suppose therefore it was drawn up in a hurry. Yet the fact of the matter is that the very day after the tax was announced on the evening of November 17, the tax officials throughout the country were on November 18 making inspections and visitations in respect of this tax. That is what I call snooping; it is the gestapo method. I would like the minister to explain why these things go on when business is the lifeblood of our country.
To come back to my question, does the minister think that a United States content of eleven per cent is of sufficient importance to justify his putting this industry out of business?


Douglas Charles Abbott: I gave a good deal of consideration to the brush industry, and I do not believe that the imposition of this tax is

Excise Tax Act Amendment
going to put them out of business by any means. Their volume will probably be reduced. I would hope that it will be reduced, because that is the purpose of the tax, but from the information I have, it is not going to ruin the business, as my hon. friend has suggested. It is true that eleven per cent is not particularly high; still it is an appreciable United States content. There is this other point, that we are trying to effect not too drastic but a certain reduction in consumption in Canada all along the line, particularly of less essential articles. One cannot reduce the consumption of food and essential clothing, but if we are to continue to play our part and export partly on credit we must create again what we had up to a little over a year ago, a surplus of production over consumption.
Mr. TIMMINS'. What difference does it make whether the toilet articles are made out of plastics or ebony or some other wood? Surely one particular group should not be singled out.


Douglas Charles Abbott: Rightly or wrongly the toilet articles group has been singled out since 1933 for this type of tax. In wartime that was considerably expanded and that continues. Personally I look forward to the day when we can get rid of this type of tax. It is not the type of tax that I personally like to keep permanently in the tax structure. I would prefer a simpler structure but under conditions like the present, when we are attempting to use the fiscal weapon as a means of restricting consumption this is a line in which it can be legitimately employed.


Harold Aberdeen Watson Timmins: As I understand, toothbrushes have been taken out completely.


Douglas Charles Abbott: Right at the outset. It is a very low priced article.


Harold Aberdeen Watson Timmins: What is the difference between toothbrushes and hairbrushes so far as one's ordinary personal necessities are concerned? Why should toothbrushes go free and not hairbrushes? The minister needs a hairbrush and so do I. Fortunately we still have some hair. Why differentiate? Here is a man making toothbrushes, and another making hairbrushes. Some firms make toothbrushes and hardly anything else, while some other firms make hairbrushes. Why should there be a discrimination?


Douglas Charles Abbott: One facetious answer might be, I suppose, that a good many more people have teeth than hair. At any rate, toothbrushes were eliminated in the first place because they are in the low-price bracket.
They are a real necessity, and therefore they were eliminated at the very outset. When I discussed the question with the industry it was pointed out how difficult it would be from the standpoint of low-priced brushes and toilet articles, and we took toothbrushes out. The hairbrush comes close to being a necessity for most people, but on the other hand, in that field, the price range is so great, and there are so many fancy sets, silver-backed brushes and so on, that this was considered a fit subject for a temporary tax of this kind.


Harold Aberdeen Watson Timmins: Now that the minister is in this price range, would he consider two or three articles selling for $16 as articles commanding a high price and deserving a tax of this kind? Would such articles not come within the low range?


Douglas Charles Abbott: Sixteen dollars? I would not pay so much for a hairbrush.


Harold Aberdeen Watson Timmins: I mean a set.


Douglas Charles Abbott: I suppose people could buy hairbrushes individually.


Harold Aberdeen Watson Timmins: Why should the minister want to interfere in business to that extent? We are getting down to pretty fine points when the government can interfere in business to that extent.


Douglas Charles Abbott: I honestly do not think the matter is so serious. I do not know about other members but I have not bought a hairbrush for years. I had a set given me by my wife a good many years ago, with initials on them, and I have not had to buy hairbrushes for years. I am inclined to think the supply is good and that people could hold off for a while. On the other hand, one has to buy combs -more often. They are fragile.


Harold Aberdeen Watson Timmins: I am serious about this because, after all, when one comes to an industry which is at the point of life and death, the matter is quite serious. It is more serious than the minister makes out, whether the industry should or should not be taxed when it does not come within any of the five categories which the minister has set out from time to time as comprising the things which should be taxed for the purpose of saving United States dollars. I cannot see why a tax should be put on these things. After all, our own industry comes first. If we have firms that have been in business for forty years, building themselves up, their position should be considered. Anyone who knows anything about plastics knows that the industry hardly existed at the time of the first war, but it has grown little by little and we are shipping to
Excise Tax Act Amendment

other parts of the world. We ought to give serious consideration to taking goods of this kind out of the purview of the act. I repeat, our own industry comes first and when it ceases to do so we have made a mockery of ourselves in this sort of legislation.


Mr. ZAPLITNY:: The other day, replying to a question, the Minister of Finance said that the reason certain household articles such as refrigerators were taxable while similar articles for industrial or business use were not-


Douglas Charles Abbott: Industrial or commercial production.


Frederick Samuel Zaplitny: Those which enter into production or the making of one's living, I understand, are in general exempt. I understood that to be the answer.


Douglas Charles Abbott: Not necessarily in all cases. That is the general principle followed.


Frederick Samuel Zaplitny: It is a principle that might be extended to other articles. There are two items mentioned here, firearms and outboard motors, which in a large number of cases in the northern parts of Canada are used in the production of goods or as a means of making a living. There are occupations such as trapping, prospecting, fishing and so on in connection with which these articles are purchased, and they are bought not as luxuries or for sporting purposes but for the purpose of enabling the purchaser to make a living. In such cases would the minister consider exempting them?


Douglas Charles Abbott: We gave careful consideration to those two items, because in northern Canada the outboard motor is a part of the trapper's equipment, and the same applies to a lesser degree to firearms. However, we came to the conclusion that it would not be practicable to do that because the tax is put on at the wholesale level. Those two articles go out through jobbers, as do others, and administratively it would have been almost impossible to handle them. One would have had to have individual applications and it would not have been possible. On balance we came to the conclusion that the outboard motor, even when used for that purpose, would have to be subject to the tax.


Frederick Samuel Zaplitny: If that applies to these two items, does it not also apply to the articles mentioned in the previous paragraph, that is to say gas refrigerators? If the tax applies at the wholesale level or the manufacturer's level in the cases that have been referred to, I suggest that it applies in the 
same way all the way through. I do not see how you apply that in one case and not in another.


Douglas Charles Abbott: I am told that that type of refrigerator is a clearly identifiable type of product made for trade purposes and not for household use.


Frederick Samuel Zaplitny: It goes into a great, deal of detail. If what the minister says is true for that type of equipment it should be true for the other, and there should be some way of making an arrangement whereby people who buy these articles for purposes of production or as a means of making a living should be relieved of the tax. Administratively it would not be impossible. It might be slightly inconvenient but when you consider the inconvenience to which the public is put at the present time, I suggest that the government should share a little of it.


Douglas Charles Abbott: The matter was given careful consideration and it was felt not to be practicable. The reasoning my hon. friend puts forward would apply with force to the low-priced automobile, which is used in a great many cases by doctors and others for professional purposes.


Frederick Samuel Zaplitny: Going further down the list we find certain photographic supplies, slides, films, projectors and so on designed for industrial or professional photographer's use. There is another example where that type of equipment may be necessary for a person to make his livelihood and there is a possibility of creating a distinction between that which goes into professional use or industrial use and that which may be bought for sporting purposes. Sporting cameras and the cameras used by the public generally are different from those used by photographers in their trade.


Douglas Charles Abbott: One of the principal reasons in this case for including these items is the fact that they have an exceedingly high import content, and we are anxious to discourage such imports as much as possible; and yet you cannot put under licence or quota the import of that sort of thing. It was not felt practicable to do it.


Andrew Ernest Robinson: A small industry in Port Elgin known as Keystone, but which we consider one of our large industries, will be hit heavily by this measure. Will the minister keep in mind the fact that a great number of people depend on that industry in Port Elgin for their livelihood? At various times there is talk in the house about decentralization. Here is an excellent- opportunity

Excise Tax Act Amendment
to practise decentralization in concrete form, by keeping such an industry as this functioning.
Its products consist mostly of brushes. I called it a small industry but I am probably wrong, because at one time it was recognized as one of the largest industries in the British commonwealth of nations. I understand that briefs have been presented to the minister which describe the situation better than I am able to do. This company manufactures low-priced as well as high-priced articles. Would it not be wise for the minister to consider raising the ante and getting it up a little higher? If you go out and buy a shaving brush, you do not get it in the 25 cent list. You might get for a dollar a shaving brush that would give you some satisfaction. The list of articles covered by this 25 per cent excise tax is such that it will hit the chap in the lower income brackets. If we could raise the ante a little it wmuld not hit him as heavily. Another thing I should1 like to point out is that all the articles this concern produces are essential for health purposes. Once more I would ask the minister to consider raising the ante up from 25 cents to whatever he thinks would be worthy of consideration.


Mr. FRASER:: I want to follow up what was said by the hon. member for Dauphin regarding outboard motors. These should be free of excise tax to those who will use them for professional purposes, such as guides, trappers and resort hotel owners. I am especially interested in this matter because of the fact that in my riding the outboard motors for the whole of Canada are made.


Douglas Charles Abbott: Very fine motors too.


Gordon Knapman Fraser: Yes, they are fine motors.


Douglas Charles Abbott: I have one.


Gordon Knapman Fraser: 
Douglas Charles Abbott: The tax on clocks and watches, of course, is not proposed under this resolution.


Gordon Knapman Fraser: No. I mentioned that it does not come under this resolution; but it is hindering export trade the same as this tax is hindering the export trade of outboard motors today and will continue to do so. I am afraid that it will also have an adverse effect on labour. In fact it has had that effect already; lay-offs have taken place in these various firms. Consideration should be given to the suggestion of the hon. member for Dauphin that guides, resort owners and others who want outboard motors for professional use should be given them without taxes. All these motors are sold with a guarantee, the same as electrical appliances are sold. Every dealer has the name of the purchaser, and it would be a simple matter to have the dealer return the tax to him.


Harold Aberdeen Watson Timmins: 
Douglas Charles Abbott: None whatever. It is
strictly on current account.


Harold Aberdeen Watson Timmins: purpose of restricting the purchase of many of the durable kinds of consumer goods which are either imported or contain a significant import
content.
The minister made it quite clear that this was temporary. The immediate effect of his saying that it was temporary was that, the next day and the day after, people who had given orders for dresserware immediately returned their goods to the manufacturer or wrote to the manufacturer cancelling their orders. That happened to a great number of people in the brush industry' and in the dresser-ware industry'. Still the measure is temporary. What is happening now is this. These goods have probably a seasonal sale. Orders are taken during the year and some time in the fall delivery is made. This year orders are not being placed. In other words it may be the minister's wish that there shall not be any sale of these goods, that there shall not be any manufacturing of these goods, and that there shall not be any money made in this industry but that some other industry shall get the benefit of that business. The fact of the matter is that because the minister says this is of a temporary nature this industry is stifled. I would like the minister to tell the house just how temporary this measure is and, further, just what is the explanation of the words "significant import content." Does that mean five per cent, ten per cent or what?


Douglas Charles Abbott: As to the time question, Mr. Chairman, I cannot assume the role of a prophet in this matter. This phase of our dollar conservation program will be gotten rid of just as quickly as we can, consistent with the restoration of our reserves to what we believe is a safe level. As to the use of the word "significant", I have already' dealt with the various reasons which prompted the use of this fiscal weapon. The United States content was one of those reasons. Perhaps I did not stress some of the others as much as I should have in my radio speech, but on several occasions during the course of this debate in committee I have emphasized the necessity of reducing the consumption even of articles which had almost no United States content.


Harold Aberdeen Watson Timmins: Then may I stop the minister there for a moment?


Douglas Charles Abbott: Others may hold that this is wrong.


Harold Aberdeen Watson Timmins: What would be the benefit to Canada of putting a tax on an article which had almost no United States content?


Douglas Charles Abbott: I must repeat that one of the objects of this program is to reduce

the over-all Canadian consumption of all articles to a point where we are again producing more than we are consuming. We were in that position in 1946, when total Canadian production was two or three hundred million dollars in excess of what we were consuming and importing. In 1947 we caught right up with it, however, and consumed and imported just about what we produced. In other words, in order to continue to export four or five hundred million dollars worth of goods abroad we had to live on our fat; we had to dig into our reserves. Now our reserves have reached the point where we cannot do that, and we have to create again an over-all current account surplus if we are to continue to export on credit.


Harold Aberdeen Watson Timmins: But can we afford to dissipate what we have in the way of production in order to bring about this over-all picture the minister speaks of?


Douglas Charles Abbott: It is not a question of dissipating what we have in the way of production. What we must do is consume a little less ourselves in order that we may lend it or give dt to others who need it. The United States is in the fortunate position of having a large over-all current account surplus which enables it to export substantial quantities of goods to other countries on credit. We had that surplus up to the end of 1946. We do not have it now, and that is because our people are using up domestic consumption and imported articles at a rate which just about balances our total production. We do not want to slow down very much, but we have to pull in our belts just a little bit and, as I have said before, live within our own means and within the means of our customers.


Harold Aberdeen Watson Timmins: Then will the minister consider dropping this excise tax before he drops the conservation measure?


Douglas Charles Abbott: I think it would be very' improper for me to say which of these measures we should take off first. For what it may be worth, though, I can indicate that I would think this is one of the measures I would want to get rid of first.


Andrew Ernest Robinson: I am sure the minister would not want to carry his austerity program to such a point that he would have us stop buying brushes necessary for personal hygiene. Would he consider raising the price ranges so the tax would apply only to brushes costing more than a certain figure? This would permit people in the lower income brackets to continue to buy these brushes.

Excise Tax Act Amendment
If the minister would not consider this point would he tell us his reasons for not considering it?


Norman James Macdonald Lockhart: I want to associate myself with the remarks of the hon. member for Bruce. This has been the subject of a very great deal of criticism on the part of the man who wants to buy an article selling for perhaps SI or $1.25. They indicate that prices have gone up to a certain extent as it is, and when you add this tax you add very materially to the cost of standard articles which I think the minister will agree are necessities rather than the luxury items he is trying to suggest.


Douglas Charles Abbott: Hon. members will realize that, I have had exactly the same representations they have received, and from the same sources. I listened to them as sympathetically as I could and went into the matter very carefully. I came to the conclusion that this tax should continue; that it was not going to ruin these particular types of business, as has been suggested. I came to the conclusion that in the very low ranges, this five, ten and fifteen cent stuff, it was quite improper that there should be any tax because it was impracticable. But it must be remembered that there has always been a tax on these articles when sold in sets, and now the tax is simply being extended to the articles when they are sold individually as brush, comb and mirror. For years these articles have been taxed when sold in sets.


Mr. JACKMAN:: I believe the government should still give consideration to this excise tax. It depends entirely upon whose business is being ruined, upon whose ox is being gored, as the old saying goes, as to whether or not the tax seems reasonable. I was interested to see the minister and the government switch over from the argument that this excise tax was put on because if this were not done it would give an advantage to our own manufacturers as against our former sources of supply, namely across the border. Apparently that did not take any too well with the Canadian public, so the minister developed the argument, I think somewhat late in the debate, that it was necessary for the Canadian people to tighten their belts in order to restore the over-all surplus position which we had some j'ears ago but which we lost last year.
I cannot believe, Mr. Chairman, that the government is serious, that it is sincere, that it is not endeavouring really to fool the members of this committee when it says the excise tax is placed on this very limited number of
articles for the sole reason of causing Canadian consumption to decrease.


Douglas Charles Abbott: I never said that was the sole purpose. It is one of several purposes.


Harry Rutherford Jackman: That is quite right, Mr. Chairman; the minister did not ascribe it all to that one purpose alone. He pretty well switched over from one of the original reasons for the imposition of the excise tax, because he admitted that he did not need the money, but said the tax was put on to keep the Canadian market open to the American exporter who formerly supplied it. Later in his argument, however, he developed the theory that Canadians had to consume less in order to create once more this over-all export surplus. Does any member of this committee think that because the people have to pay greater prices for a very limited number of articles, as set forth in the resolution, they will not spend on certain other things the money which would have gone for these articles? Probably the range of articles still open to them would be as one hundred is to one; that is, one is made more difficult to purchase because of the excise tax but ninety-nine other articles may still be purchased with that moneyr. So I cannot believe the minister is serious when he says one of the reasons for the excise tax is to have Canadians consume less and thus have more to export. If he were serious about this matter surely he would do something to curtail the sale of goods generally. One knows that in recent months there has been a tremendous increase in instalment selling. There has been borrowing against life insurance policies for the first time in a good many years. People generally are finding that times are not as easy for them in many ways, and they are now using credit. If the government is sincere about limiting purchases by our Canadian people -and I do not think it is as necessary as the minister makes it-then there certainly are means which are a hundred times more effective than the specious argument he brings forward to justify this excise tax.
Canada, fortunately, has a good many small businesses. Many of them are producing lines which are not set forth in the list of goods in the resolution now before us. As some of my colleagues mentioned a minute ago, some of these businesses are going to be hard hit. Surely there are ways and means of accomplishing the minister's objective without making it so difficult for some of our smaller industries, some of which are almost the whole support of the towns in which they have their factories.
Excise Tax Act Amendment


James MacKerras Macdonnell: I wish to make one or two comments following what has been said by the hon. member for Rosedale. May I recall to the minister some of his remarks made earlier in the debate when he explained, as I recall it, reasons for making some of the changes made under section 1. He spoke of cases where he had found undue distress on businesses and where he thought there should be changes. One of the illustrations he gave was where the taxes were going to be used as a basis of calculation of duty by United States customs, and it was going to cut off Canadian export to the United States.
Coming back now more particularly to the distress cases, it seems to me we are still left with certain distress cases which have been dealt with and certain others which have not. I take it that as soon as this measure is passed this whole thing is crystallized and nothing more can be done. We will be left with those cases which have been brought up this afternoon, and no doubt others which have not been regarded as sufficiently distressful. I shall not labour the matter further; but with all deference, I say to the minister that although I know he cannot admit it, I really believe nothing but sinful pride, which I am sure all governments have, would prevent him from throwing the whole thing out the window.
I am sure this matter cannot be regarded as a saver of United States exchange. I doubt if the minister would say that. And when he comes to the other reason, the reason the hon. member for Rosedale has given, that of cutting down expenditures, while I accept that as a general argument, to apply it for all the articles selected for taxation in this measure seems largely to destroy the argument. I wish it were possible for the minister to leave this measure until he gets further evidence. I believe that whereas Bill No. 3 will produce certain results, this measure is just a frost and will produce nothing but trouble.


Douglas Charles Abbott: We have considered all the cases in which real distress circumstances have been urged. I believe that businesses which might be seriously affected or practically put out of business have been taken care of. Perhaps the outstanding example is the piano business. It is not a large business in Canada, but for reasons which the committee will realize, a heavy tax like that would have serious effects. The other example was the small pleasure boats business. Those are the ;wo outstanding cases.
In the bill which is to be founded on the resolution there is a provision that these taxes

can be relaxed individually. It was felt that would be a desirable power to take in the bill, because of the reason for which the tax is being imposed. There should be that degree of flexibility. In other words the tax can be removed without waiting for a formal amendment to the act.


James MacKerras Macdonnell: That is both good and1 bad.


Andrew Ernest Robinson: I asked a question which the minister did not answer, and which I shall have to ask again. From the point of view of health of those in lower income brackets, would the minister consider raising the exemption in the matter of prices on different articles? If he does not wish to, would he give the reason why?


Douglas Charles Abbott: I do not think the health of anyone will suffer because of the imposition of this tax. Toothbrushes are exempt. Lower price combs and brushes are exempt. I do not know that anyone will be deterred from purchasing a nailbrush or any of these other brushes which he may require Lor health or hygienic reasons because of the imposition of the tax-at least, I would not think so. If I felt the health of the people of the country was going to suffer as a result of the tax, I do not believe I would put it on. But I do not believe their health will suffer.


Harold Aberdeen Watson Timmins: I wish to get back to that same point. There should be no tax on a comb up to twenty-five cents. Yet there may be a tax on a toothbrush which sells for fifty cents. That is quite apart from the hairbrush or the shaving brush which would sell for about $4. Why should there be a tax on these?


Douglas Charles Abbott: Those things sell at five,
ten or fifteen cents.


Harold Aberdeen Watson Timmins: Up to fifty cents.


Douglas Charles Abbott: But this is under twenty-five cents. Representations were made to me by those who sold in gross lots. I have forgotten the details, because it was as least two months since they were here. But. I listened to their representations and had those representations studied by officials of the department. I came to the conclusion that it was not commercially or practically sound to impose a 25 per cent tax on that type of goods-aside from soft drinks, of course-and that the minimum should start at twenty-five cents.


Harold Aberdeen Watson Timmins: But toothbrushes cost 5P cents.

Excise Tax Act Amendment


Douglas Charles Abbott: They are exempt altogether. They are not taxed at all.


Stanley Howard Knowles: The question is on the first resolution as amended?


Douglas Charles Abbott: Yes.


Stanley Howard Knowles: Not all six at once-just the first one.


Douglas Charles Abbott: Yes, the first one.


Stanley Howard Knowles: Will you put the yeas and nays, please?


The DEPUTY CHAIRMAN:: On the first?


Stanley Howard Knowles: Will you put the yeas and nays, please?


Some hon. MEMBERS:: Carried.


Gordon Graydon: You do not carry it as easily as that.


Gordon Knapman Fraser: Don't wait too long.


William Henry Golding: Order. The hon. member for Winnipeg North Centre has asked for the yeas and nays on the first resolution. All those in favour will say "yea".


Some hon. MEMBERS:: Yea.


William Henry Golding: Those
opposed will say "nay".


Some hon. MEMBERS:: Nay.


Douglas Charles Abbott: On division.


William Henry Golding: In my opinion the yeas have it.
Resolution negatived: Yeas, 39; nays, 43.


Stanley Howard Knowles: The resolution is lost.


William Henry Golding: The resolution is lost.
Clause 2 of the resolution as amended.


Stanley Howard Knowles: What is the amendment to clause 2?


Douglas Charles Abbott: There is no amendment to clause 2. I think I will move that we rise, report progress and ask leave to sit again.


Some hon. MEMBERS:: No.


Gordon Graydon: Vote on that.


Some hon. MEMBERS:: Question.


Douglas Charles Abbott: I have a word or two to say on this clause.


Major James William Coldwell: What is the motion now before the committee?


William Henry Golding: Clause 2.


Major James William Coldwell: I understood the minister to move that the committee rise, report progress and ask leave to sit again.


Douglas Charles Abbott: I am afraid I was a little precipitate. I was looking at the top of the resolution and I see it is one resolution, so under those circumstances I think the resolution must be put as a whole and we cannot put it in its individual sections. I had not glanced at it; I assumed that we were dealing with them one by one, but I see that in its terms it provides, as the ordinary budget resolution in ways and means provides:
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide:
That is the resolution before the committee of ways and means, and there is only one resolution before the committee.


Stanley Howard Knowles: On a point of order-


Douglas Charles Abbott: I am really speaking on a point of order. This is a resolution which has to be introduced by a minister of the crown and I suggest to you, Mr. Chairman, that the only resolution which the committee can vote on is the resolution which is before the committee, and which includes six sections. I am sorry if I misled the hon. member for Winnipeg North Centre when he asked, "Which are we voting on?" I frankly confess that I thought there were several resolutions, but I see there is only one.


Stanley Howard Knowles: On a point of order, when there was proposed an amendment to the resolution which we have just defeated it was proposed as an amendment to resolution No. 1. I would also point out that it is "budget resolutions", in the plural; the budget resolutions to which the minister referred are always in the plural. The bill which is based on the budget resolutions is based on several resolutions. I suggest also that it is out of order to reflect on a vote of the committee. This committee has voted down resolution 1, and I submit that it is up to the government to find out what it is going to do.


Douglas Charles Abbott: My hon. friend is not correct. It was moved that the resolution to amend the Excise Tax Act now before the house be amended as follows, and then were set out seven or eight sections. But there is only one resolution before the committee. In the case of the budget there are several resolutions. The budget procedure is. first, to offer a resolution that the house go into committee of ways and means to consider certain resolutions. That is the resolution on which there is a recorded vote of the house with the
24CS
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Speaker in the chair. It is then the government resolutions are considered one by one. I must confess that with my limited experience in the house I do not recall a standing vote on a budget resolution.


John George Diefenbaker: Oh, yes.


Douglas Charles Abbott: I have to take exception to that. First, there is a resolution to go into committee of -ways and means and then, when the appropriate bill is before the house it may have been voted down, but I do not recall.


Gordon Graydon: On a point of order, we have been following parliamentary procedure under the guidance of a competent and experienced chairman. The chairman has put to the vote of the committee the first resolution. We have voted upon that and those who have been supporting in committee the Minister of Finance suffered a defeat. That resolution has been voted down. The next thing that happened was the calling of the second resolution by the minister. No objection was taken before the vote. Then the minister moved that the committee rise and report progress. That motion is not debatable, although the minister was about to proceed to debate it. If the Chair is about to put the motion that this committee rise and report progress, that is a different matter, but certainly the minister cannot now-


Douglas Charles Abbott: I said I think I perhaps should move; I did not put a formal motion.


Gordon Graydon: Perhaps my hearing was not as good as it normally is, but it is usually quite good and my understanding was that the minister was moving that motion. In any event it is too late now for the minister to cure the defeat; it cannot be done. He cannot reverse that position. I think the minister is now strictly out of order, because, as the hon. member for Winnipeg North Centre has said, he cannot reflect upon a previous vote of this committee or of the house.


Stanley Howard Knowles: On a point of order, I submit, Mr. Chairman, that you should not permit this discussion. After the vote was taken you ruled that resolution No. 1 was lost. You proceeded to call for a vote on resolution No. 2. At that point the Minister of Finance made his motion that the committee rise and report progress. I submit that you should put to the committee either resolution No. 2 or the minister's motion to rise and report progress and that you should not permit us to discuss any further resolution No. 1 which has been voted down.


Douglas Charles Abbott: I may have misled the committee, but in answer to a perfectly proper question by the hon. member for Winnipeg North Centre who asked, "Are there two resolutions here?" I said, "Yes." I spoke too quickly, because there is only one resolution before the committee. Nothing can cure that. There was only one resolution moved-I have forgotten now by whom, perhaps by myself or one of my colleagues. That is the resolution before the committee. There was an amendment to that resolution which carried earlier in the present sitting. The amendment to the resolution carried and the resolution now before the committee is the resolution as amended. I am merely making the point that the only resolution which it is competent for the committee to consider is the resolution which was regularly moved by one of my colleagues some three, four or five weeks ago.


James MacKerras Macdonnell: That is the one which was lost.


Douglas Charles Abbott: It was not put; that is the point I am making; it was only one section.


John George Diefenbaker: On a point of order, Mr. Chairman, my point is simply that you have declared the resolution lost. Certainly you cannot make two bites of a cherry. Once you have made your declaration, that is final. Apparently the minister wants to do what the Minister of Trade and Commerce did on Friday evening-cut through the rules of parliament, cut through the proprieties of our procedure, cut through the rules of our constitutional government. I suggest that you have ruled, and that is final.


William Henry Golding: If I may say a word for myself, my idea was not to put this only as one resolution. The hon. member for Winnipeg North Centre rose and requested that No. 1 be put. There was no objection raised. My personal opinion was that it should be put that way.


Douglas Charles Abbott: The hon. member for Winnipeg North Centre asked if they were separate resolutions, and I said yes. But I was mistaken. There is only one resolution before
the committee.


Gordon Graydon: Is there one law in parliament for the government and one law for
the rest of us?


Some hon. MEMBERS:: Order.


Gordon Graydon: The reason I ask is this. We are being defeated here regularly on many questions and we have to take it, but now

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when the government are defeated on this question they are trying to find some other way of winning. We want to play according to the parliamentary rules. We abide by them and we ask the government to do the same.


Stanley Howard Knowles: Further on the point of order, Mr. Chairman, I contend, as has been suggested on this side of the house, that we have before us six separate resolutions, and I refuse to budge from that position. But even if the position taken by the minister is correct, that this is just one resolution, I point out that it is certainly a complicated resolution and Bourinot's Parliamentary Procedure, fourth edition, at page 298 says:
As respects what are known as "complicated questions," they may always be divided into distinct parts . . .
You say, Mr. Chairman, that that is what I requested, a division into distinct parts, and certainly there was no objection to that. So it can be taken either way, and we are right. Either we have six separate resolutions and we are adopting them seriatim, or it is one complicated question which I asked to be divided into six parts, and no one objected; you, sir, put the question either on the first part of it or on the first resolution. Whichever way it goes, I submit that it has been defeated, and I submit that you said in the clearest language "The motion is lost".


Douglas Charles Abbott: What is your ruling, Mr. Chairman? I take the stand that there is only one resolution.


Major James William Coldwell: The Chairman has
already ruled.


William Henry Golding: I suggest that we rise and report progress and ask leave to sit again. It is for the committee to decide. If you want the yeas and nays on that-


Gordon Graydon: They have lots of members opposite in now.


Major James William Coldwell: The minister does not seem to wish to move the motion you suggested, Mr. Chairman.


Douglas Charles Abbott: I have raised the point that there is before the committee only one resolution on which we can vote, and I am taking the position that that is the motion which must be put. I do not know whether you have ruled, sir, on that or not.


Stanley Howard Knowles: He said the motion was lost.


Douglas Charles Abbott: Admittedly if we can vote on subsection 1 of this resolution the vote
was against the passing of that subsection at that time; there is no doubt about that. But my point of order is that the resolution should be put as it was moved. I was mistaken when I said there was more than one resolution. There is not.


Mr. FERGUSON:: The Liberal party's
attitude is "heads we win, tails you lose".


Major James William Coldwell: My hon. friend the member for Winnipeg North Centre has pointed out that this is a complicated resolution, if it is a resolution in the singular. If hon. members will look at it they will see that it is a complicated resolution containing many different things, and its very form, if it is a resolution, would suggest that it is more than one resolution. If you look at the way in which it is drafted there are, in my opinion, six different resolutions. Each one begins this way:
Effective on and after November 18, 1947, an excise tax of 25 per cent is imposed on the following goods.
Then No. 2 begins:
2.	That on and after November 18, 1947, the rate of excise tax on automobiles . . .
No. 3 begins:
3.	That on and after November 18, 1947, the rate of excise tax on phonographs . . .
No. 4 begins:
4.	That on and after November 18, 1947, the rate of excise tax on cameras . . .
And so on for the whole six resolutions. I would say that there are six distinct and separate resolutions forming amendments to the act.


Douglas Charles Abbott: The initial words of the resolution are:
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide . . .


Major James William Coldwell: A measure.


Douglas Charles Abbott: No. To provide what follows.


Major James William Coldwell: It says that it is expedient to introduce a measure, and whether that one measure is six or five or four resolutions, as the house may decide, all the resolutions will be incorporated in that measure. We have not that measure before us. We have the resolutions which will comprise that measure when it is introduced.


Douglas Charles Abbott: The purpose of tax resolutions, as the committee knows, is to inform the house as to the nature of the amendments which it is intended to introduce to the taxing

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statutes or with regard to a new taxing statute. The taxing statute to be amended here happens to be the Excise Tax Act, and the resolution which I proposed seeks to amend the Excise Tax Act in certain respects set out here. But I suggest that there is only one resolution.


Major James William Coldwell: But we decided to discuss it in six different parts and the first part was voted down.


Douglas Charles Abbott: We have not only discussed it in six different parts, but we have covered the whole field and a lot more besides. We have discussed the automobile tax and the excise tax and all these other taxes.


Stanley Howard Knowles: On the point of order which is now spinning out, it seems to me that there is a clear point on which the chairman should rule. Is it not true that I requested a vote on No. 1, whether it is the first part of a resolution, whether it is clause 1, or whether it is a resolution standing on its own feet? Is it not true that a vote was taken on the first resolution or on that first clause or whichever you call it? And is it not also true, Mr. Chairman, that you clearly said it was lost? In the light of that, is this discussion not out of order?


William Henry Golding: Those in favour of No. 2 will say "yea".


Douglas Charles Abbott: What are we voting on?


William Henry Golding: On No. 2.


Douglas Charles Abbott: May I have a ruling on the point of order, Mr. Chairman? I raised the point of order that the only vote which can be taken in this committee is a vote on the resolution as moved, which covers other amendments to the Excise Tax Act as well as those contained in paragraph 1.


Stanley Howard Knowles: Mr. Chairman, I submit that it is out of order to ask you to rule on that. That point of order could have been raised only when I asked for the vote. The minister has absolutely no right to reflect upon a vote of this house and to ask now whether it was in order for us to take that vote.


Douglas Charles Abbott: It was a vote in committee.


Stanley Howard Knowles: The committee is governed by the same rules as the house.


William Henry Golding: I think we should vote on resolution 2. Those in favour will please say "yea".


Mr. CASE:: We have had no explanation of No. 2.


William Henry Golding: No. 2 reads:
2. That on and after November 18, 1947, the rate of excise tax on automobiles adapted or adaptable for passenger use with seating capacity for not more than ten persons each, imported into or manufactured or produced in Canada . . .
And so forth. Those in favour of No. 2 will
say "yea".


Douglas Charles Abbott: On a point of order, Mr. Chairman, you may rule me out of order; you may say I am wrong, but I am making the point of order that we cannot vote on these sections independently, that there is only one resolution.


An hon. MEMBER:: We have already voted.


Harold Aberdeen Watson Timmins: You have already put No. 2, Mr. Chairman. That ends No. 1 altogether.


Gordon Graydon: No. 2 has been called, so it is too late now. May I begin the discussion with respect to No. 2 and ask the minister if he will explain the purport of No. 2 resolution, so that we may have an opportunity of going on with the discussion in connection with it.


Douglas Charles Abbott: Mr. Chairman, may I have your ruling as to whether we should vote on this resolution as put-


Gordon Graydon: Mr. Chairman. I respectfully suggest that we are on No. 2 and that we should now proceed with that discussion.


William Henry Golding: If I have to make a ruling I shall have to rule that No. 1 has been voted on.


Some hon. MEMBERS:: Hear, hear.


William Henry Golding: We will call No. 2. Those in favour of No. 2 will say "yea".


Gordon Graydon: We have a right to discuss No. 2, Mr. Chairman, and I have entered upon the discussion of it by asking the minister to explain the purport of it.


Douglas Charles Abbott: Do I understand your ruling to be this, Mr. Chairman-


Some hon. MEMBERS:: Order.


Douglas Charles Abbott: I want to know. Do I understand your ruling to be that the resolution cannot be put as a whole and that we should now vote on No. 2, and, if that is carried or rejected, go on to No. 3? Is that your ruling?


William Henry Golding: Yes.

Excise Tax Act Amendment


Douglas Charles Abbott: With the greatest respect, I must appeal your ruling, Mr. Chairman.


John George Diefenbaker: Mr. Chairman, on a point of order-


William Henry Golding: An appeal has been taken and I must report it.


Mr. BOUCHER:: May I point out that the appeal was not taken until you had already called item 2. That being the case, we are through with the first item.


William Henry Golding: There has been an appeal against my ruling and the appeal must be reported.


Mr. COLD  WELL@: Mr. Chairman, this ruling was appealed long after you had made your ruling, and as I understand the procedure of this house-


William Henry Golding: Order. I must ask the hon. member and all hon. members to have no further discussion until this appeal is decided on.


Mr. COLD  WELL@: I am discussing the appeal; my point is that an appeal must be made at the time the ruling is given, and the ruling was given several times before the appeal was made. The appeal is out of order.


William Henry Golding: I would ask hon. members not to discuss the matter further.


John George Diefenbaker: We have rights in this house.


Stanley Howard Knowles: On a question of privilege-


John George Diefenbaker: I want to say this, sir. When you made your ruling there was no question raised by the Minister of Finance in regard to the regularity of that ruling until he found out that he had lost; and then, having lost, he said, "Well, when I played that time, when I participated, and I lost, I was really just playing." I suggest, sir, that you have made your ruling. You went on to part 2, and to return now is to deny to parliament its rights and privileges.


William Henry Golding: The appeal against my ruling is in order and I would ask hon. members not to carry on further discussion. The appeal is against my ruling.


Stanley Howard Knowles: Mr. Chairman, I rise to a question of privilege. I submit that what is before the house is not a ruling at all. What is before the house is your statement as to the result of the vote, and a matter like that is not subject to appeal.


William Henry Golding: The hon. member is quite in error. I ruled that this vote was in order. The Minister of Finance takes exception to that and he has appealed against my ruling.


Major James William Coldwell: On a question of privilege, may I point out that not only did the Minister of Finance fail to challenge your ruling at the proper time, but you called and we began to discuss No. 2.


Douglas Charles Abbott: I cannot agree with that.


Gordon Graydon: I take it we are going on with No. 2. I have already initiated the discussion and I should like to make some remarks in connection with it.


William Henry Golding: Order. I should not have to point out to the hon. member that the minister has appealed against my ruling and that we have to have that reported to the Speaker. I have to report that to the Speaker.


Gordon Graydon: Mr. Chairman, we should not have to have it pointed out to us either that, after the whole thing is decided, the minister can take his time as to when he wants to appeal on a thing of this kind. He should appeal at once or let it go.


Douglas Charles Abbott: It was not a case of taking [DOT] his time-


Some hon. MEMBERS:: Oh, oh.


Douglas Charles Abbott: I was discussing the point and reiterating my point of order, and frankly I did not think, Mr. Chairman, that you had given a formal ruling on my point of order until I asked you what it was.


Some hon. MEMBERS:: Oh, oh.


Douglas Charles Abbott: In fairness that is the case.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
The chairman ruled that .the vote in the committee of ways and means on the first section of the resolution under consideration was in order. From that ruling Mr. Abbott appealed.


James Horace King: Those in favour of confirming the chairman's ruling will please say "yea."


Some hon. MEMBERS:: Yea.


John George Diefenbaker: Mr. Speaker-


Some hon. MEMBERS:: Sit down.


John George Diefenbaker: I will not sit down.


Some hon. MEMBERS:: Order.
Excise Tax Act Amendment


John George Diefenbaker: On a question of privilege, Mr. Speaker-


James Horace King: It is a well known rule that when the question is put for a division no member is allowed to speak.


John George Diefenbaker: Mr. Speaker-


James Horace King: Those in favour of the ruling will please say "yea."


Some hon. MEMBERS:: Yea.


John George Diefenbaker: Mr. Speaker, I
challenge the correctness of the report that has been given to you.


James Horace King: Those against will please say "nay."
Som hon. MEMBERS: Nay.


James Horace King: In my opinion the "nays" have it. Call in the members.
The question before the house is an appeal from the ruling of the chairman of the committee of ways and means. The chairman ruled that the vote in the committee of ways and means on the first section of the resolution under consideration was in order. From that ruling Mr. Abbott appealed.


Mr. COCKERAM:: Before you announce your ruling, Mr. Speaker, through a slip of the tongue, led by the Minister of Justice (Mr. Ilsley), you asked those who followed him to confirm the chairman's ruling.


James Horace King: I declare the chairman's ruling not confirmed.


Mr. CARDIFF:: I was paired. Had I voted, I would have voted to confirm the chairman's ruling.


Mr. MARQUIS:: I was paired with the hon. member for Charlevoix-Saguenay (Mr. Do-rion). Had I voted, I would have voted against confirming the chairman's ruling.

Excise Tax Act Amendment


Douglas Charles Abbott: I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted, I would have voted against sustaining the chairman's ruling.


John Oliver Probe: I was paired with the hon. member for Jacques Cartier (Mr. Marier). Had I voted I would have voted to confirm the chairman's ruling.


Mr. GARIEPY:: I was paired with the hon. member for Victoria-Carleton (Mr. Hatfield). Had I voted, I would have voted against confirming the chairman's ruling.


Mr. BRACKEN:: Out of courtesy to the Prime Minister (Mr. Mackenzie King), in his absence I did not vote. Had I voted, I would have voted to sustain the chairman's ruling.


Mr. LESAGE:: I was paired with the hon. member for Kamloops (Mr. Fulton).


Mr. MILLER:: Out of courtesy to the
Minister of Mines and Resources (Mr. Glen) I did not vote. Had I voted, I would have voted to sustain the chairman's ruling.


Mr. MALONEY:: I was paired. Had I voted, I would have voted against the chairman's ruling.
(Translation):


Mr. GAGNON:: I was paired with the hon. member for Parry Sound (Mr. McDonald). Had I voted, I would have voted for the ruling of the chairman.
(Text):
And the house having resumed in committee :


William Henry Golding: Shall the resolution as amended carry?


Stanley Howard Knowles: No. I take it that you are now putting to the committee the entire six-point resolution, in the light of the vote that has just been taken?


William Henry Golding: That is right.


Stanley Howard Knowles: That being so, I move in amendment, seconded by the hon. member for Mackenzie (Mr. Nicholson):
That clause 1 of the proposed resolution as amended and clauses 2, 3 and 4 be deleted from the proposed resolution.


Major James William Coldwell: Before the amendment is put, I think a word should be said as to why it has been moved. These particular clauses are objectionable to us and. I think, to many other members of the opposition, because they impose a burden very largely upon people who cannot afford that burden at the present time.
After all, many of the appliances included in these four clauses are now the normal
equipment of an ordinary household. They cannot be regarded as luxuries. In many parts of the country, including rural areas being electrified, these appliances are necessary for the benefit of health of the people living in such communities.
It is true that there may be some argument about some of the articles in these clauses. In the main, however, I would point out that they are articles of necessity. I am particularly interested in No. 4, because it deals with projectors required for the visual education of the people, a factor which becomes more and more apparent as days go by.
Therefore I support the amendment just moved. I believe that it is in order, and that we should vote for it.


Mr. POULIOT:: Mr. Chairman, before the question is put, I wish to state my position regarding this kind of taxation. How many times have I complained about financial advisers of the government, without receiving any support at all? I am not surprised to hear complaints about this legislation. How many times, when I have asked that the deputy minister of finance be fired, have I been rebuked? I have been rebuked each time. Unless he is fired, and unless that great expert on taxation, Hector So-and-so, is fired, and unless the minister changes his staff, we shall always have difficulty with regard to taxation.


Mr. KUHL:: The government is responsible.


Jean-François Pouliot: The members are responsible, because they do not support me when I ask that these men be fired. The hon. member, the tallest of all of us, is ready to support them. Why does he not come with me and say, "Pouliot, you are right on this. Those men should be fired." Then we shall have sensible representation, which would be in accordance with the British North America Act.


Walter Frederick Kuhl: I am not supporting them.


Jean-François Pouliot: The hon. member is
antagonistic toward this legislation; but, on the other hand, he is ready to swallow what is said by the experts who have suggested it to the government. He is illogical. I have established many times-perhaps a thousand times-that the hon. member has been illogical. I cannot understand why he was elected in his constituency.
I make the urgent request to the Minister of Finance to get rid of all the nonentities in his department, starting with his deputy minister. I may be rebuked by him today, but I shall repeat my request immediately afterwards. I refer to that man who has been the

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downfall of a respectable and reputable institution in the United States, who was put in a key position by Bennett, and who is not qualified to be adviser to the Minister of Finance. Throw all the Tories out of the Department of Finance; we want more Liberals there, to have a liberal policy in taxation.
At the request of the hon. member for Quebec South, who was organizer of the Liberal party in 1935 in Quebec, I made a list of the taxation imposed by Bennett each year, and it was used as propaganda during the election. Here is a copy of that leaflet which was distributed through the country. I was responsible for it. And if any member will take the trouble to read Hansard of 1935 he will see that list of taxation which I computed and put on record.
The Prime Minister said in February of 1935, "We have understood the necessity for reducing taxation." And then, I see in the pamphlet, "To reduce the burden of taxation, vote Liberal." I prepared that conscientiously, because I wanted taxation to be reduced.
Now we have more taxation. I do not put the blame upon the minister. He is a likeable chap, but he suffers from the bad companionship of those wizards in the Department of Finance. Let us get rid of them. Who in this committee will say I am wrong when I denounce them?
I am sorry we have come to this amount of taxation.


Mr. GILLIS:: Would the hon. member put that list on record again?


Jean-François Pouliot: It is already on Hansard. If the hon. member will follow the example set by the hon. member for Winnipeg North Centre, and begin to read my speeches, he will find many good things in them.
It is past history, of course; but it is there. Let me say this to hon. members: They complain about taxation now, but when gifts to all countries of the world and the financing of the British empire were the subject of debate in the house, they were all for it. No one was against it. There were only a few of us who protested against that nefarious financial policy.
Let me repeat what I said about the deputy minister of finance-and I am extremely glad he is not here today. He used to come here to adorn the House of Commons by his presence; but he is not here today, and it is a good thing he is not. He should not be in the department, either. Why? Because by his crazy investments he caused the downfall of the Strauss Corporation, a reputable institu-

tion in New York. He was the treasurer of the Strauss Investment Corporation. He made crazy investments; he had a bad background, but he was taken in because he flattered the vanity of the late Lord Bennett. He told Mr. Bennett that he should receive honorary degrees from all the universities on the North American continent. We have to stand for it, and the poor man, the underdog, has to pay taxes on account of it.
Let us get rid of these people. Let us get rid of Clark. Let us get rid of Towers. Let us get rid of Rasminsky. Let us get rid of Donald Gordon. Let us get rid of all these fake wizards, and then we shall have sensible taxation and the people of this country will be able to carry on without too much difficulty.
I am sorry to have been obliged to say this, but I suffered much when I thought of it and when I thought of the poor people who are suffering because of the stupidity of these so-called wizards who would not be tolerated as advisers in any other government. I am fed up with them.


Mr. MacINNIS:: I should think the Minister of Finance would say something in protection of his financial advisers. Either there is some foundation for what the hon. member for Temiscouata has said or the minister does not consider it worth a reply.


Douglas Charles Abbott: Myr hon. friend got to his feet so quickly that I did not have a chance. I shall have something to say.


Angus MacInnis: The chairman was on his feet before I rose, so that the minister has no excuse. I insist that the hon. member for Temiscouata is engaging in idle talk. Even if the minister has stupid advisers, he is not compelled to take their advice. He must always assume responsibility in this house. Anything that is brought here we understand comes from the minister. He takes the responsibility, and for that reason I do not believe either the committee or the advisers of the minister should have to take the sort of thing that they have to take daily from the hon. member for Temiscouata.
While I am on my feet, I think I should say something about this resolution, particularly about paragraph (c) of resolution 1 which deals with electrical or gas refrigerators. I am satisfied that not only on this side but on the government side and throughout the country there is tremendous opposition against the tax on these articles. If this amendment does not carry I suggest to the minister that, even at this late date, he should undertake to remove this item from the resolution. I have

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received a great number of letters-I suppose other hon. members have as well-protesting against these excise taxes in general, but nearly every letter received from business firms and individuals emphasized this particular item. I suggest again that, if this amendment does not carry, the minister remove this item from the resolution.


Douglas Charles Abbott: The hon. member for Vancouver East has said that I should defend the officials of my department. I think my attitude with respect to attacks in this house on civil servants is pretty well known. I have had occasion to voice it a number of times. I know that the hon. member for Temiscouata
many years for. As I suggested above, the tax is not achieving its purpose and ait the same time is creating many hardships. The component parts of refrigerators that have to be imported from the United States represent a very small portion of the finished product. The saving in United States dollars from this source must be small.
There is a good deal of confusion as to the collecting of the tax inasmuch as it applies to hospitals and public institutions. I am enclosing a copy of a letter which we wrote to the Canadian. Westinghouse Company Limited and which is self-explanatory. I would appreciate it very much if you would take this matter up with the department of customs and excise and get a clear cuit ruling on the matter of rebate of the 25 per cent excise tax when an article is purchased for use in a community
holds very strong views about the civil service. I know that he holds strong views about the ones he has mentioned today, and he has voiced those views before. There is nothing I can add other than to say that I have complete confidence in my officials and I do not agree in any respect with what he said concerning their ability.
owned hospital.
Our national organization of radio and appliance dealers is exerting a great deal of pressure on the government to have this tax taken off refrigerators. Any assistance you can give us in the house will be much appreciated.
Mr. Abbott has made the statement to our committee in the east that it is politically impossible for him to retract now. This seems like a pretty weak excuse.


James Arthur Ross: I wish to say a word in support of this suggested amendment and I want to expand somewhat the remarks of the hon. member for Vancouver East. There are a great many people across this country who have protested with respect to paragraph (c) of resolution 1. I do not think I can do better than to read a portion of a letter I received in today's mail. It is true that I referred to refrigerators some time ago in this debate, but I should like to quote from this letter as follows:
Regarding the new 25 per cent excise as it applies to electric refrigerators. This tax is in my mind one of the most ridiculous things that we as appliance dealers have had to contend with.
I make this protest, first as an appliance dealer serving a rural area of over 5,000 people and secondly as president of the Manitoba radio and appliance dealers' association, representing over 300 radio and appliance dealers in this province.
There is no doubt about it that an electric refrigerator is no longer a luxury. The high cost of perishable foods such as meat, milk, butter and eggs makes it imperative that the average income group has a safe and sure method of food preservation. This tax is not affecting the higher income bracket family. The young veteran and his family who are trying to set up a new home and make his re-establishment credit go as far as possible is the one that is taking the beating.
If the tax was imposed to depress the sale of major electrical appliances it is certainly not doing it as far as the farming areas are concerned. A few dollars tax is not going to stop the people in the farm areas from having the conveniences that they have been waiting so


Douglas Charles Abbott: I did not make any such statement.


James Arthur Ross: That is what he has been informed. That is the situation today. I think that letter is based upon the real facts which exist in this country. People with average incomes are finding it difficult to purchase some of t'he essentials of life for members of their families,'especially when there are young children. A refrigerator is an essential article. It is necessary to preserve food and there is nothing luxurious about it. It is one of the most essential articles required by families in the low and average income groups. Why the government should undertake to impose such a tax at this time on people in the low-income group is certainly more than I or any of these people on low incomes can understand. The government are distinctly wrong, and if the amendment should fail to carry I appeal to the minister and the government as strongly as I can to exempt refrigerators from this tax.


Park Manross: I wish to say a word about this tax on refrigerators. The minister told us that one of the purposes of this tax was to curtail consumption. It was suggested by the hon. member for Muskoka-Ontario and the hon. member for Moose Jaw that production and consumption could have been curtailed by rationing United States dollars to these manufacturers just as was done with the automobile industry. The minister replied to the effect that there was a lot of domestic material content in these refrigerators, such as copper
Excise Tax Act Amendment

and steel, which would be available for export if not used in the manufacture of refrigerators. But the refrigerator manufacturers in Canada, I would point out, have established the Canadian content over a period of years and drawbacks are provided for exports, so that the department knows exactly how much of United States content there would be in each model of refrigerator the manufacturer makes. Furthermore, the manufacturer would not use any more copper or steel, because what they import from the United States is the heart, which consists of the compressor and thermostatic expansion valve. You cannot build a refrigerator without these component parts, and that is what they are bringing in from the United States. So that if dollars were rationed on the basis of past imports they could build only as many refrigerators as they bring in component parts for.
Another thing about curtailing consumption is that you are curtailing consumption of the wrong people. The rich people are not concerned about paying $25 or $38 more for a refrigerator if they want one. They buy the more expensive models, ten or eleven cubic feet, and they cannot get them now. What this tax is doing is penalizing the veterans and the young couples who are starting up housekeeping and need a refrigerator. This tax makes them pay 25 per cent more for it. The minister said: They will save their money in the meantime and buy a refrigerator when the tax comes off. But they cannot save their money, because they have to have that refrigerator this summer. Many veterans' homes have no cellars and many ice companies will not take on any more customers. There was a shortage of ice last year and, no doubt, will be again this year, because the natural ice went out before the ice companies had finished their cut. I do not believe the tax will do anything to curtail the consumption of the rich people, but it does hit the veteran and the newly married couple. Furthermore, it puts members on both sides of the house, particularly on the government side, in an embarrassing position.
I hope the government will not get the support of its members for this tax, but, if it does, what will that member say to the veteran whom he is taxing 25 per cent more on his refrigerator? The veteran will be getting literature from his branch of the legion showing that his member voted for this tax.
If we vote for this tax we are breaking our pledge to the boys who went overseas and fought overseas. It is like saying to them: You were over there fighting for us and we gave you a nice brochure saying for $13.42 
a month you get all this and a nice sum of money when these goods were tax-free; but now you are through school, have a wartime house perhaps, the war is over, and you can pay the tax just like anybody else, and so the veteran is hooked for the 25 per cent tax that he should not be asked to pay. For these reasons I am supporting the amendment.


Douglas Charles Abbott: I have had an opportunity of considering the amendment moved by the hon. member for Lake Centre, and I must take the position, Mr. Chairman, that it is not in order. I have had occasion to raise a similar point before on amendments moved in committee of ways and means. For your consideration, sir, I cite May's Parliamentary Practice, thirteenth edition, where at page 544 I find this:
Proposals for the variation, or modification of taxation can therefore be made in the committee: but these proposals must be grafted upon the financial scheme submitted by the government, and must not affecit the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for ithat proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty; the necessity of new taxation, to that extent, being already declared on behalf of the crown.
I submit that the amendment would affect the balance of ways and means and, therefore, is out of order when submitted by a private member.


Stanley Howard Knowles: I wish to speak to the point of order and perhaps, Mr. Chairman, you would recognize that it is six o'clock.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Park Manross: I was almost through when the committee rose at six o'clock. Discussing the curtailment of consumption and referring to electric refrigeration, I had said that if this had been put on the dollar basis it would have effected the end aimed at just as effectively as by means of the 25 per cent tax. We have been argued out of that position. Nevertheless the department has apparently decided to put manufacturers of electrical refrigeration on the dollar quota basis. That is the way in which it proposes to work. If that is to be done in order to cut down production and consumption, I see no necessity for the 25 per cent tax for this

Excise Tax Act Amendment
purpose, in view of the fact that it deprives those who most need it of consumption in this form.


Stanley Howard Knowles: Mr. Chairman, just
before the committee rose at six o'clock the Minister of Finance had raised a point of order with respect to the amendment which I had moved a little earlier. I may remind the committee that my amendment was a very simple one. It merely asked that clauses 1, 2, 3 and 4 of what is now perforce regarded as one resolution be deleted. The Minister of Finance, as I say, raised a point of order with respect to this amendment. I intend to answer the argument put forth by the Minister of Finance on his own ground, namely, by quoting from May and other authorities; but before I do so, may I point out to the committee and to you yourself, sir, the utterly impossible position in which the government is putting this house by the course now being pursued by the Minister of Finance.
This afternoon we took the position that we had before us six separate resolutions. On the basis of that position we contended that we had the right to vote on those six separate resolutions as six separate propositions; in other words, that we had the right to accept some and reject others. The minister argued against that position, after resolution No. 1 had been defeated on a free vote, and contended that what we had was not six separate resolutions but just one resolution. I immediately did what seemed to be the only course left to us, by moving the amendment now before the committee.
The minister now contends that my amendment to delete the clauses we object to is out of order. In other words, it is a case of the government saying that the opposition simply cannot have an opportunity to vote on these individual propositions either one way or the other.
I contend that the government has a pretty serious responsibility resting on it by following this course and by raising points of order of this kind. I felt, however, from the attitude of the Minister of Finance, and from things I thought I heard him say, although he did not rise from his seat to say them when I moved my amendment, that he was satisfied with this procedure. It seemed to me he felt that here was a chance to vote on the question whether or not we accept or reject the first four parts of his resolution. We are told now that we cannot have that opportunity, that we have either to take as a whole or to reject as a whole these six different propositions.
I submit that such a procedure is entirely contrary to the spirit of the citation which I read this afternoon from Bourinot, and which is in the other authorities as well, namely, that it is always proper to ask for a division of a complicated question into its distinctive and constituent parts. Therefore I am sorry, in the name of parliamentary democracy, that the minister has taken this position, in view of the place in which it puts the opposition in this free parliament.
But, Mr. Chairman, the minister has chosen to cite from page 544 of May, thirteenth edition, reading part of the paragraph, and contending, on the basis of a part of that paragraph, that my amendment is out of order. The part he read from page 544 was as follows:
Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for (the service of the year.
I forget whether he read the rest of the paragraph or not.


Douglas Charles Abbott: I went right on.


Stanley Howard Knowles: Fine; I shall do the same. However, after that I wish to come back and point out the part he failed to read. It goes on:
Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty; the necessity of new taxation to that extent, being already declared on behalf of the crown.
Now I point out that in that same paragraph there is this first sentence which the minister neglected to read:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals.
There is a footnote at the bottom of the page, which gives a list of a number of cases where the repeal of taxes has been effected in the committee of the whole.
Now, Mr. Chairman, and this is the crucial part of my argument, it seems to me that the feature about the citation which the minister quoted and which has not been noted is this. The paragraph as a whole is dealing with two separate things. In the first sentence it deals with the right to repeal certain taxes, the right to get rid of certain taxes altogether. That is a very brief sentence without any provisory qualification added to it. In the second place this paragraph deals, not with repealing or
Excise Tax Act Amendment

wiping out a tax altogether, but with varying or modifying a tax that has been proposed by the government; and the part of the paragraph which the minister read says that when you try to do that, and only when you try to do that, you must stay within the general framework of the government's balance of ways and means. The paragraph goes on to give the reason why the committee must do that. This must be done so as to carry out the general instruction that any money measure must in the first instance have had the recommendation of the crown.
I submit, Mr. Chairman, that that citation which the minister read, and which has often been brought out in this house as a reason why the opposition cannot move any amendment in committee of ways and means, has been completely misinterpreted. It is not a citation which says that no changes can be made in committee of ways and means. It simply says that if you are trying to vary or modify a tax proposal, you must stay within the general framework of the government's proposal. Again I say that paragraph deals with two things. It deals with what you must do if you are seeking to vary or modify a government tax proposal, but it also permits the complete repeal of a tax proposed by the government, and to this permission no proviso is attached. The Minister of Finance read from only one page in May, thirteenth edition. May I ask him to turn to certain other pages. I ask him to turn to page 560 of the same volume, which reads:
Proposals to reduce a burthen upon the people may be made in the house or in committee, no special form of procedure being prescribed for such a motion . . .
The paragraph goes on to say that this may also be done in connection with the introduction of bills which are strictly confined to the reduction of a tax or charge upon the people. Then the paragraph continues:
It follows that amendments for the reduction of such charges, as taxes, rates, salaries, tolls and penalties, can be moved when a bill is considered upon report-
Perhaps I had better go on. I referred to the minister's not reading the whole of a paragraph. This -had better be put on the record too. The paragraph continues:
-and this has been permitted even when, by indirect effect, an amendment created a certain amount of charge. For instance, it was held allowable, upon this stage, to strike out an exemption from a tax, which had been agreed to by the committee on the bill; and also to omit a clause imposing a charge upon the ratepayers, although the omission of the clause left other parties, already liable by law, still chargeable with certain expenses.

So in that paragraph on page 560, the tone of which is clearly set out in the first sentence, that it is always competent for a committee to reduce a burden upon the people, is a specific list of things which it is possible to repeal; taxes, rates, salaries, tolls and penalties. What we are seeking to do in this amendment is not to vary or modify a tax, as is set out in the citation quoted by the Minister of Finance. We are seeking to get rid of one altogether. If hon. members will turn again to page 519 of May, thirteenth edition, pages 518 and 519, they will find this interesting paragraph. This .paragraph follows a section that has dealt with the necessity of having the royal recommendation in connection with any bill that will involve the expenditure of money or the imposition of a burden. Note this paragraph:
It follows, as a matter of course,-
And this is fundamental to British parliamentary practice having to do with the imposition of taxes.
*-that a motion to alleviate the burthens upon the people is not within the scope of the standing orders relating to the imposition of charges upon the people.
In other words, a motion to alleviate a burden is not governed by the standing orders that have to do with expenditures and taxes, which require the royal recommendation. The paragraph continues:
A bill for diminishing or repealing a tax or other public burthen, unless the imposition of a new tax is proposed by way of substitution, is introduced without the royal recommendation or preliminary committee stage.
That again is very clear. I pick up now another book, and this time it is Bourinot, fourth edition, in which there is a long, list of things that can and cannot be done in committee of the whole with respect to taxes. Finally, at the end of the paragraph that appears on pages 431 and 432 there is this clear-cut sentence:
A proposition for the repeal of a duty is in order, and cases will be found where a proposed duty has been struck out in committee.
I submit, Mr. Chairman, that that citation fits exactly the terms of my amendment. My amendment is a proposition to strike out in committee a proposed duty. I have left that one to the last because it is so clear; but actually in terms of the theory of parliamentary procedure I feel that the citations I have quoted from May are more to the point, and I hope that they will have cleared up this confusion about the citation which the Minister of Finance read. Clearly that citation would apply if my amendment were an

Excise Tax Act Amendment
attempt to modify or vary a tax imposed by the government. If I were seeking to do that, I would either have to show that I had the governor general's approval, or I would have to show that it was within the framework of the government's balance of ways and means. But that is not what I am seeking to do. I am not trying to modify or vary a tax at all. I am asking this committee to exercise the fundamental right that has adhered to parliament down through the ages, and that is to relieve a burden placed upon the people. I am asking that certain items of taxation be struck out altogether, and I submit that my amendment is clearly in order.


Douglas Charles Abbott: I congratulate my hon. friend on the able and clear way in which he has presented so convincingly a completely fallacious proposition. If he were a member of my own profession, I would be inclined to make him an offer. This resolution which contains six subsections-four of which ask authority to impose taxes and two of which ask authority to take taxes off-must, I submit, be treated as a whole. The last two paragraphs, which the proposed amendment would leave in, remove the sales tax on electricity and gas used in dwellings and remove the excise tax of one cent a pound on sugar and similar products. The effect of the taxes which are removed would, it is estimated, be	something	of the order of
$21,000,000 for a full year. It has not been possible to estimate the yield of the taxes which it is proposed should be put on. But I suggest that if you eliminate the proposed new taxes and leave in the taxes which it is proposed should be removed, it clearly affects, to use May's terminology, the balance of ways and means voted for the service for the year. I do not think that can be successfully contradicted. This point of order has been made before in connection with budget resolutions and, according to my recollection, has been sustained, and I suggest to you, Mr. Chairman, that it is well taken.


Stanley Howard Knowles: I shall not say anything about the introductory sentence which the Minister of Finance has just now used lest I get myself into trouble. But I am satisfied that many members of the committee will admit that the argument I put forward was by no means fallacious. It was too strong for the minister to answer.


Some hon. MEMBERS:: Oh, oh.


Douglas Charles Abbott: That is fair enough.


Gordon Graydon: It sounded that way.


Stanley Howard Knowles: I point out that the minister has completely failed to meet the point I was making, namely, that the proviso he keeps coming back to relates, as May clearly points out, only to an attempt to vary a particular tax. That same paragraph makes it dear that the committee has the right to do other things, such as get rid of a tax altogether. I am now going to read the whole of the paragraph from which I quoted in Bourinot, on pages 431 and 432. This paragraph includes more than the subject with which we are dealing, but I think it well to read it all to get a bird's-eye view of this whole proposition.
All the authorities go to show that, when the government have formally submitted to the house ithe question for the revision of customs and excise duties-
Which is what we have before us now.
*-it is competent for a member "to propose in committee to substitute another tax of equivalent amount for that proposed by ministers, the necessity of new taxation to a given extent being declared on behalf of the crown."


William Henry Golding: Order.


Stanley Howard Knowles: That is one thing that can be done. Changes can be made within the framework of the scheme that has been approved by the crown.
It is also competent for any member to propose another scheme of taxation for ithe same purpose, as a substitute for the government plan. But it is not regular to propose a new and distinct tax, which is not a mere increase or diminution of a duty upon an article already recommended by the government for taxation, though it is the function of this committee to impose rather than to repeal taxes.
Then comes the last sentence; and the reason I have read the whole paragraph is to get it clearly in the mind of the committee that this rule sets out several different propositions.
A proposition for the repeal of a duty is in order, and cases will be found where a proposed duty has been struck out in committee.
My whole argument turns on this, Mr Chairman, that there are at least two different things set out by these rules which it is competent for the committee of the whole to do. One is to make variations or modifications. When the committee tries to do that it has to follow the proviso or qualification the minister has quoted. The other is to strike out a tax altogether; and when the committee seeks to strike out a tax, neither in May nor in Bourinot is there any such proviso or qualification as that quoted by the minister. The minister is trying to take a qualification that applies to one procedure and attach it
Excise Tax Act Amendment

to another. I submit that not only is that an invalid way of arguing, but that we have had a little too much of it in this house.


Jean-François Pouliot: I enjoy very much listening to the hon. member for Winnipeg North Centre; - that is why I did not rise earlier to call him to order. The situation is obvious. When the resolution was before the committee, Mr. Chairman, you decided that it should be considered paragraph by paragraph. Then an appeal was taken to the Chair. The ruling of the Chair was that the resolution should be taken as a whole, and that ruling has been supported by a majority of the house. Therefore the amendment of the hon. member for Winnipeg North Centre is just a criticism of the ruling of the Chair. As a result it is clearly out of order. It is a defiance of the ruling of the Chair. Mr. Speaker gave his ruling and declared that the resolution should be considered as a whole, not according to its several parts. That ruling was given support by a majority of the house. Then, after all that, the hon. member for Winnipeg North Centre tries to educate us as to what should have been done. It is done. It is like arguing about spilled milk. It is finished. How can he come before you and ask that you act in the opposite way to the decision of the Chair? I cannot conceive it. For me the thing is as clear as crystal water. There is no doubt about it; and when the hon. gentleman thinks the matter over he will realize that. What has Bourinot to do with it? What has May to do with it?


Stanley Howard Knowles: Ask the Minister of
Finance.


Jean-François Pouliot: There is a paramount principle that the majority rules, and the majority has decided to sustain the ruling of Mr. Speaker. Therefore the house is bound by that, and we cannot resort to this committee to change it. The committee has to act in accordance with the orders it receives from the house; and the ruling of Mr. Speaker, supported by the house, binds the committee now. I repeat, therefore, that the amendment of the hon. gentleman is absolutely out of order.


Mr. IRVINE:: The chairman's ruling was voted down, you know.


Jean-François Pouliot: I mean the Speaker's ruling.


Stanley Howard Knowles: The Speaker did not rule at all.


Jean-François Pouliot: The Speaker's ruling was supported.


Angus MacInnis: Evidently the hon. member was not in the house when the vote took place ; otherwise with his usual acuteness he would have known what happened. The chairman gave a ruling; the Minister of Finance appealed

that ruling, and my hon. friends on the government side voted against sustaining the chairman's ruling. Consequently we now have what the Minister of Finance wanted; we have one motion instead of six, and that motion is amendable.


Mr. MacNICOL:: Now that the whole resolution is back before the Chair-


Douglas Charles Abbott: And an amendment.


John Ritchie MacNicol: I am not speaking to the amendment-


William Henry Golding: There is a point of order before the Chair and I should like to give my ruling now, because I do not think there is any point in further discussing it. At the outset of his speech the hon. member for Winnipeg North Centre referred to the minister as wanting certain things, but I should like to remind him that the house itself decided that this should1 be submitted as one resolution. In regard to the other points the hon. gentleman raised, I think I should read Beauchesne, third edition, page 182, citation 500:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals.
And I should like hon. members to notice this:
Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect ihe balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
I followed the hon. member very closely. In his amendment he certainly does not propose any way of raising any tax of any sort. In view of citation 500 to which I have referred, I rule that the point of order raised by the minister is a proper one, and that the amendment is out of order.


Mr. SMITH (Calgary West):: It seems to me that what is suggested here is nothing more or less than what is done every day when we are dealing with estimates. The amendment offered by the hon. member is not a substitution of another tax. It is not a suggestion of any increase. In fact, according to the minister, this is not a tax.

Excise Tax Act Amendment


William Henry Golding: Order; the ruling is not debatable. I have listened to the arguments for and against. Every hon. member who wished to do so had an opportunity to present his argument, if he believed the amendment was in order. I have given my ruling, and I believe it is a correct one because it has been given many times. I would hope, therefore, that the committee would not waste any further time on it and would deal with the resolution. Shall the resolution carry?


John Ritchie MacNicol: Mr. Chairman, since the resolution has not yet carried, and since it is all before the committee, there are one or two observations I should like to make. My first remarks will be about paragraph (b) of section 1, and then I shall speak about section 2. I would refer, first, to electrical items, and then to motorcars.
A few days ago there was a discussion in the house as to how the Minister of Finance could return excise taxes once they had been paid in. Today I received a letter from the Canadian Association of Radio and Appliance Dealers, which might be of some assistance to the minister in connection with the returning of the tax, if later on it were decided to have that done.
This letter is addressed to myself and reads thus:
We notice in the press that the 25 per cent excise tax on electrical appliances is being discussed in the house and, particularly, the feasibility of returning the tax moneys already collected to the consumers.
The Canadian Association of Radio and Appliance Dealers has discussed this matter with many of its members and with other branches of the electrical industry, and we stand ready to assist the government in carrying out a reversal of the procedure by which this tax was collected.
I might say that this association is using good judgment in offering to assist the government. The letter continues:
For example, for guarantee purposes our members are forced to record the name and address of each electric refrigerator purchaser (they have a five-year guarantee). Therefore, there would be no problem in having cheques mailed to each of these purchasers for the amount of the tax. In addition, this association is prepared to go further and by national coverage in the press invite consumers to apply to their retailer for the rebate.
This association stands ready to facilitate the removal of this tax which in the eyes of the young couples and veterans who enter our stores seems to be an unnecessary burden.
I thought perhaps the minister would like to have this letter on Hansard. If he decides 5849-158J
to return the tax later on, then he will know this association is ready to assist his department.
I agree with all that has been said by hon. members on this side of the house, although I am not so sure about those on the other side. I have no doubt there are just as many hon. members on the other side who would like to speak about the tax on radios and electrical appliances. But of course party followers just cannot do that.


Gordon Graydon: Might we have a little bit of order over there? It is not fair to the hon. member who is speaking.


William Henry Golding: Order.


John Ritchie MacNicol: I know how hard it is to keep from talking. However it does not bother me at all; I can go ahead and say what I have to say.


William Henry Golding: Order. I would ask hon. members to refrain from talking when an hon. member is trying to make himself heard.


John Ritchie MacNicol: I had just said that I aixf sure there are as many members on the government side as there are on this side who would like: to comment about these taxes. I am sure the minister has had many conferences with his followers; but it is difficult for a government supporter to speak as freely as we on this side can speak. We are not tied down as are members on the government side of the house. I was on that side myself for five years, and it used to irk me to sit over there and say nothing, and not be invited to say anything.
I had just said that I agree with what has been said on this side of the house about the tax on refrigerators and other electrical appliances. It is going to be a great burden.
I should like to ask if the minister surveyed other ways in which he could have conserved all the money he required to conserve. I have in my mind just one item; and I believe I may make reference to it without being out of order. Last year we imported coal to a value of almost S150 million, and paid United States railroads about $75,000,000 to haul that coal to our border. That, made a total of $225 million in United States money we could have conserved if we could have purchased that coal in Canada. I am not going to say we could have purchased all of it, but certainly we-could have purchased a large part of it.
I have often wondered why ministers of finance-and I am not asking only the present one-have not been able to tell us why they are not allowed to arrange things so. that
Excise Tax Act Amendment

Canadians can use their own products. Had we used our coal, we would have saved a great amount of these iniquitous taxes. Perhaps that is not the right word to use; but they are iniquitous so far as the people who have to pay them are concerned. And it would have saved the minister a good deal of trouble in these troublesome times.
Then, may I say that motorcars are no longer luxuries to workingmen. For years governments have been encouraging working men to live outside the cities and to buy perhaps five acres or one acre of land. These workers have been encouraged to live within ten or fifteen miles of the cities, and thousands of them have accepted that suggestion. In those days there was no trouble about securing motorcars.
Look at the position they are in today. When I go home a multitude of workingmen come to see me and ask me how in the world they can buy new cars. Their cars are worn out, and they cannot pay the 25 per cent excise tax. They ask me what they are going to do, and state that they have been put out of the cities and they do not know how they will get to the cities to do their work.
The same applies to rural schoolteachers who live in towns throughout Ontario and drive out to the rural schools from those towns. I had one come to see me when I was home on the last occasion. He was wondering how he was going to buy a car, in view of the 25 per cent tax.
The same applies to the ordinary clergyman who has two or three field charges. I have had communications from them asking how they are going to buy cars and pay the extra 25 per cent tax. So I say that no longer can a motorcar be considered a luxury to anyone who has to make a living. Certainly they are not luxuries to the. workingmen. They use motorcars because of necessity. I do not know whether it is too late to have the minister change his mind, but I for one believe that something should be done to help the ordinary man. I am not speaking about the rich man because he will buy a motorcar, no matter what it costs. I know many people have bought new cars at exorbitant prices and jx 25 per cent tax means nothing to them. But to the ordinary everyday worker who perhaps lias to go into the city to carry on his job or, if he lives in the city, has to go from one lend to the other, a motorcar is not a luxury; it is an absolute necessity.
I have not taken much of the time of the committee when I could have taken up a lot. What is the use? These taxes are all in operation, but the amount of correspondence

I have received and the number of people who have come to see me made me feel that I should speak. Having given this information to the government, I feel that I have done my duty and cannot do anything more.


Mr. GIBSON (Comox-Alberni):: I hesitated to take part in this debate until I had an opportunity of listening to the accumulated wisdom of the members of the various oppositions and also the explanations that the minister has given. I feel that it is easy for an opposition to oppose a tax. In opposing this measure I do not want to be put in the position where I am opposing a tax because it is a tax and I know it will be unpopular with the people. I have supported many tax measures which the government has brought into this house and which I assume were quite unpopular. However I feel that this tax is in a particular category as far as unpopularity is concerned.
I am not going into the constitutional argument that has been advanced to the committee, because there are plenty of lawyers to take up that phase of the matter. However it does appear to me that the minister's explanation of the way in which this tax was brought in was unworthy of the brilliant talents which it is acknowledged the minister has. When the C.C.F. moved to throw out all the taxes it appeared to me to be a gesture that anyone in opposition could well afford to take. But I do not think the amendment moved by the hon. member for Winnipeg North Centre does justice to his responsibility as a member.
Despite what the hon. member for Davenport has just said about the necessity of a workman having a motorcar, I feel that the present taxes on motorcars are not particularly onerous. Anyone who can afford to pay $1,700 or $1,800 for a new car can afford to pay an additional $130. That payment will not make it impossible for him to carry on his job. I am quite sure we all feel that the government is justified in trying to keep out of the country these high-priced cars that, as a matter of fact, some of our hon. friends drive.
Hon. members in this house know the minister very well and I think we all have a great deal of confidence in him. I do not think the public of Canada have had the same opportunity to know him. With the constitutional crisis that has occurred in the democratic world as we know it, I am afraid that the public might be a little concerned about this departure from regular parliamentary practice in the introduction of these excise tax proposals.

Excise Tax Act Amendment
Perhaps I may be forgiven for offering a word of advice. It seems to me that we in the house would have been glad to accept the minister's explanation of the urgent necessity that prompted him to bring in these taxes. If he had come before us and said, "I realize that this was an unconstitutional way of doing this and I regret the urgent necessity that made it necessary for me to bring them in"; I think if he had thrown himself on the generosity of the house all members would have been glad to give him a hand in support of his proposals.
I come now to the actual items of taxation. I know the minister is opposed to dirt just as much as he is opposed to sin. I think vacuum cleaners could well be left off and refrigerators also. If the minister made one or two minor concessions of that kind I am sure they would represent only a small reduction in revenue. I think if he came before us and proposed a 50 per cent excise tax on some of these items we would probably be glad to support him. Some of these things are definitely luxuries.
He put a 25 per cent impost at the manufacturers' level, but a 50 per cent tax at the same level would be just equal to the present luxury tax at the retail level on jewelry and that sort of thing. There are many things which would be more of a luxury than the wedding ring which many men have to buy. Those of you who are married know that is a necessary item, and yet we have been willing to pay a 25 per cent tax at the retail level. As I said, I think the tax on motorcars is all right. I was in Windsor the other day and thej' assured me that they had enough orders to keep them going for the next two years. I do not feel that this tax will be very harmful as far as that is concerned.
In closing, there is just one thing I want to say and this is not advice to the minister, it is advice to the government. The government is very conscious of the fact that they will be fighting two by-elections in British Columbia within the next couple of months. As I said last time I spoke, we are particularly sensitive about the fact that we have no cabinet representation. It has been pretty well assumed in Canada that at long last British Columbia, for the first time since confederation, is to have the ministry of fisheries.


Mr. CRUICKSHANK:: The hon. member for New Westminster.


John Lambert Gibson: The present incumbent of that position is a close personal friend of mine, a man of great personal charm. However I feel that his particular talents could
be used by the government to better advantage in some other ministry, and I think he would be the first one to concede that point. I suggest that if the minister is going to put over these excise tax proposals with the voters of British Columbia, the best thing to do would be to have the Prime Minister appoint the hon. member for New Westminster as Minister of Fisheries. It would be one of the most popular moves the government has ever made, and I am quite sure the people of British Columbia would show their appreciation at the polls.


James MacKerras Macdonnell: Mr. Chairman, we have heard quite a lot about this resolution. We are getting near the time when we hope to adjourn for a space and no doubt there is much to be said for letting this go, though still unconvincing to the minds of many hon. members on both sides of the house. But the more I hear about it, the more it seems to me that the evils and difficulties attendant on it are set forth, and the less there is that satisfies me that it should be passed.
For a few minutes tonight I am going to look back and trace briefly the history of this resolution. Let us see what was originally stated to be the purpose, and let us see if that, purpose seems to have been changed a great deal in mid-career. Finally, and much more important, let us see whether there is any likelihood of its achieving the purpose for which it was originally put forward, or indeed any other purpose.
I should like to turn back to what the Minister of Finance said in his broadcast in the middle of November last. After dealing with the embargo measure which we have already passed as Bill No. 3, he went on to say:
Import restrictions alone will not be enough to keep down our use of goods which contain a high proportion of parts or materials from the United States.
I pause there a moment to point out that apparently there has been a very considerable change so far as that is concerned, because we now have goods on this list which have only a trifling proportion of United States parts. He went on:
Many of these goods are produced on a large scale in Canada and we cannot properly limit and ration the imported parts and materials.
Incidentally no explanation has ever been given to my satisfaction why that is so. Incidentally, again, may I say it seems to me there is a considerable argument for using Bill
Excise Tax Act Amendment

No. 3, which is now law, instead of this jumble of provisions which seems to begin nowhere and to end nowhere. He continued:
I am therefore proposing to use the same fiscal devices as we used during the war to restrict purchases of this type of goods.
I want to read a little more, and I ask the members particularly to notice what I shall read now to see whether it does not appear that there has been a considerable departure in outlook from the intention then set forth. I am not criticizing that. I am only saying it would look as if the bill is very different from what was in the mind of the Minister of Finance at that time. He went on:
The government will ask parliament to place an excise tax of 25 per cent on a wide range of these durable consumer goods, the purchase of which-
Note this:
-can normally be postponed by the average family if necessary and most of which are of a less essential character.
Listening to the debate this afternoon, it didi not seem to me that many of the taxes come within that class at all. He went on:
This tax will apply to sporting goods, outboard motors, pleasure launches, firearms, oil burners, motor cycles, musical instruments, cameras, radios, phonographs and to most types of electrical home appliances.
That is what the minister said in November last. I now come to what he said in December last, and I read briefly from his speech on December 16. First of all I want to read this extract, in which, speaking of the special excise taxes, he says:
Their first and primary purpose is to discourage the sort of expenditure which adds to our imports from the United States.
I want to emphasize that. This was a measure originally put forward for the saving of United States exchange. It is unfortunate that the minister has had difficulty in getting the figures. We have not yet got them, but I do not believe it will be a very bad guess to say that those figures will show a very trifling saving in United States exchange. I say that for this reason. The minister felt at the outset that no figures at all could be got; but when I persisted, perhaps somew'hat unduly, he was good enough to say he would get the figures. I must not say too much by way of anticipation; but I do not believe I would be wrong if I said that the minister will prove right to this extent, that when those figures are produced they will be of the nature which he himself prophesied, that they will not show any substantial saving so far. If they do not, it will not be surprising because, after all, bear

in mind that the only direct saving of United States exchange has to come through a lessening of consumption of goods made in Canada which have United States components. There is precious little evidence yet of much falling off in the consumption of Canadian goods. Moreover we know that many of these goods have only a trifling amount of United States parts in them, some much less than ten per cent, some an even more trivial percentage. So I think we shall find that there is no evidence yet of any substantial saving in United States exchange.
I pass on to the minister's second reason, and always bear in mind that this reason was put forward in November and again in December as a measure for saving United States exchange. But evidently he felt that that would not be a sufficient reason, and there were several others. I now come to the second reason, and I think this is a complicated and difficult one. It seems to me to have two or three parts inconsistent with each other. I will read very briefly:
A second reason for these taxes was to limit so far as practicable the degree of discrimination against regular suppliers in the United States and their dealer organizations in Canada.
In other words, as under Bill No. 3, a great many goods were to be excluded from Canada either wholly or largely, because, as the minister says, it was felt desirable to ease the situation for those United States exporters who would be cut off from this market. That may be a laudable objective; but along with that the minister goes on to point out, and this is one of the means of arriving at his objective, that we must also prevent Canadian manufacturers of these goods from deriving too much benefit from the fact that United States goods are kept out of the market. That perhaps has something to be said for it; but the means taken are, I suggest, rather odd, and bear in mind that this has precious little to do except indirectly with United States exchange. The means taken is to put on this tax. The minister says this tax is put on so that Canadian manufacturers who otherwise, according to him, would have jacked up their prices by reason of the absence of United States goods will not be able to do so, or at any rate so that the first 25 per cent of such a rise in price will be by way of this tax which the government will get, and therefore the minister suggests that Canadian manufacturers will be prevented from deriving this very unfair profit. I hope myself that Canadian manufacturers would have done nothing of the kind. There is nothing to suggest that competition might

Excise Tax Act Amendment
not have kept the prices down. In any event, the point I wish to make is this. In order to reach this questionable and quite illusory benefit, who is made to suffer? The Canadian taxpayer because he has this 25 per cent tax put on him.
Again let me point out where we are in the matter of having United States exchange. We have come to the point where the minister, in order to do what he deems to be fair to United States exporters who are shut out of our markets, puts on this tax.
Another point arises there which I think it is desirable to remember, and this leaves me so much unconvinced about this whole measure. As soon as you press the minister as to any one of his reasons, he immediately flits off to another reason, and the reason the minister has to do that is, I suggest, that this whole measure is a confused jumble. I said a moment ago it starts nowhere and ends nowhere. It is a hodgepodge of inconsistent and sometimes conflicting reasons.
The minister also brings the tax argument in here. If the price is going to go up, let us get it by way of tax, he says. I want to point out that this measure comes right back on the taxpayers and on a class of taxpayers who are very ill able to bear it. The minister I think recognizes that. I have no doubt that he is receiving very strong appeals from taxpayers, and that brings me to another argument.
The minister says: Oh, but we have to have an over-all surplus in Canada if we are to export goods abroad, and therefore we have to cut down consumption in Canada. Well, that may also be a very proper objective, but what I object to about this measure is this: Why does he select the people who are paying this tax to be the only people who are to be affected in this way? If we are to cut down consumption in Canada, why not do so in a very much more general manner? There is no justification whatever that I can see for dealing with the matter in this way.
We now come to the minister's fourth reason, and that is taxation. The minister finds himself in some difficulty because, on the one hand, he does not want us to regard this as a taxation measure, but on the other hand he suggests that the taxation will not be unacceptable after all; and in answer to the people who say that he has a huge surplus, he points out quite properly-I wish he would do so oftener-"Oh, yes, we have a large surplus this year, but we have been making large advances to overseas countries, as I have already indicated; and, on a cash basis, including those outlays, our income is only moderately in excess of our outlay." In other words, we have, first of all, the argument about saving United States exchange, which I believe will prove to be trivial in the extreme and utterly unwarranted. We have that as a reason for this measure-


Clarence Decatur Howe: Nevertheless we have balanced outgo and income.


James MacKerras Macdonnell: You have been given such wide powers that you will be able to do it all. Isn't that the idea?


Clarence Decatur Howe: You are complaining about what you demanded last summer that we should do.


James MacKerras Macdonnell: I am only complaining about the way you did it. You will see what happens now.


Clarence Decatur Howe: We have done it. That is the important thing.


James MacKerras Macdonnell: I have referred to the combined provision for protecting the United States manufacturer from the effect of what will be done to him by the Minister of Trade and Commerce; the Minister of Finance apparently feels sorry for what the Minister of Trade and Commerce will do to the United States manufacturer, and so he takes a whack at the Canadian manufacturer. But as a matter of fact, the person at whom he is finally really taking the whack is the Canadian taxpayer, and that is what I think is so unwise and unwarranted in this bill.
Put it this way. Why put a 25 per cent tax on this small group of people who happen to be affected by these taxes, rather than a much smaller tax, if the minister feels it necessary, on the whole of the larger group? The minister said, and I rather respected him for saying it, that probably he had not gone far enough, that probably the austerity measures had not gone far enough. Well, we can all agree that the mess they got us into by the decision of June, 1946, is a serious one. We can all agree that drastic steps have to be taken.
There is a fifth argument the minister used. That fifth argument was that, while these prices were going up and while the tax would have to be added to what the people would pay, still it was useful as a deflationary measure, because it would1 help to mop up extra purchasing power which existed and in that way help to bring a cure. I see the minister's point there, but I feel that the people who are being subjected to this tax, if it were explained1 to them that they were being made the sacrifice in order to help to cure the mistakes of the administration in expanding our means of payment far beyond
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what they should be expanded-if the people who are paying this tax were told that, I think they would be greatly surprised' indeed.
I submit that this measure has been changed in various ways from the position in which it stood1 at the beginning. The minister has told us frankly that many changes had to be made, because they found that great distress was being caused in certain quarters, and those changes had been embodied in an amendment. It is quite true that has been done, and in the course of it certain other changes have been made which the minister has found it hard to explain. As a matter of fact, the hon. member for Fraser Valley took him on the other evening by reason of the fact that there are certain articles on which the tax is left when used for domestic purposes but on which it is not paid if those articles are used in a business.
That shows how this thing has to be chopped and changed so that the original basis has in many ways disappeared, and therefore we can doubt very much whether the minister is satisfied with it, or whether even he believes it is likely to do what it sets out to do.
Therefore, even at this late date, having regard to the evident fact that the government is quite uncertain as to what is wise or unwise in this; having regard incidentally to what the minister told us today, that they are still so uncertain as to whether the tax is imposed on the right people that they will retain in the bill the power to relieve certain other categories; having regard to all that, it seems to me it is very proper, even at this stage, for us to ask the minister to reconsider the whole situation.
We have a measure which it is stated is devised to save United States exchange. When you argue on that basis they go off on to several other bases. When the United States exchange argument will not hold good we have an argument about cutting down expenditures, which I have tried to indicate is wrongly dealt with in this bill. If the government are going to cut down expenditures, do not select merely this group of taxpayers, but do it in a more general way. And, so far as the United States exchange is concerned, let us remember that the government stubbornly refuse to take one of the remedies which we have advocated and which we think they will have to take one day, and that is to deal with the Canadian dollar and its value in a realistic manner. That would help the United States exchange situation.
For all these reasons, I still hope the government will see fit to withdraw a measure which is so unpopular, and, what is more important, so unwise.


George Alexander Cruickshank: I rise tonight to explain my vote as I did a year ago in connection with the veterans affairs, and I sincerely hope I shall not have to explain my vote in connection with veterans affairs this year, because, if I have to explain it, it will not be satisfactory to the government.
In this connection, I spoke against the tax on frigidaires the other day. I spoke against taxation on what I call the poor man's automobile. I still think the Minister of Finance is wrong, and I still think he should take advice from some members of his own party in particular and, if not from them, at any rate from the House of Commons rather than from some of his officials concerning these taxation measures.
I had occasion to remark the other day, although this may not be agreed with by some people, that the hon. member for Comox-Alberni had made the best speech, in my opinion, so far as veterans affairs are concerned; I still think the hon. member from Comox-Alberni has made the best speech in connection with this bill, and he made it tonight with respect to the amendment.
I enjoy listening to the hon. member for Muskoka-Ontario, when I can hear him, and I appreciate his knowledge of subjects such as this. Unfortunately, however, he still thinks he is speaking to a little board in one of those vested-interests small committee rooms on Bay street, Toronto, because we cannot hear what he says.
I do not think the government is right in its taxation of frigidaires, nor do I think it is right in its idea of taxing lower priced automobiles. I have not had the privilege of owning a Cadillac, like some of my lumber friends. I think the government is wrong in its taxation of lower priced automobiles and it is particularly wrong in taxing such things as electric irons. The minister cannot justify to me the taxation of an electric iron, which is a necessity to the veteran's wife in this modern day and age. He cannot justify to me the taxation of kerosene or gasoline frigidaires for the use of the farmer's wife, living many miles away from electrical power.


Douglas Charles Abbott: There is no taxation on kerosene refrigerators.


George Alexander Cruickshank: Unfortunately some of us in the far districts cannot always pick and choose. We must take what we can get. I suggest that if the minister had consulted some of the members of the House of Commons instead of some of the so-called advisers here he would not have committed the error in this respect.

Excise Tax Act Amendment
I want to explain my vote in this connection. I believe that this so-called austerity program is in the best interests of the people of Canada as a whole. Whether we like it or not, we are in this position with regard1 to our foreign exchange. I am not as optimistic as are some lion, members from Ontario with regard to future prospects for gold. I believe this is the best program we could develop. Therefore I intend to support the government and I shall oppose the amendment moved by the hon. member for Winnipeg North Centre, who would always move an amendment about anything, even the weather. I am quite prepared to go before the people of my riding and justify my stand. I disagree with the policy of my friend, the hon. member for one of the suburbs of Winnipeg. I disagree with the policy of the minister and of the government in connection with frigidaires, particularly country frigidaires; I disagree with their policy with regard to low-priced cars; I disagree with their policy with regard to electric irons. But I have yet to hear from the other side of the house one suggestion as to how we could better meet the emergency situation in which we find ourselves at the present time. While I believe that the minister's policy has its faults and1 its mistakes, I believe it is the best policy we have with which to meet the situation.


Walter Frederick Kuhl: This afternoon when the hon. member for Temiscouata was criticizing the government for the policy involved in this particular measure, he made some reference to consistency and logic with particular reference to myself. I rather resented1 his remarks with respect to me, because I have always prided myself on being consistent and logical in what I say. If the hon. gentleman has any criticism to make of anything I have said in the past on economics or on the British North America Act, I suggest that he take the text of my remarks and indicate in what respect I have been inconsistent and illogical. I believe that the shoe is on the other foot. I think the hon. gentleman is the one who is illogical and inconsistent. On the one hand, he criticizes his party and the government for taxation policy and, on the other hand he does not suggest any alternative. Yet he has the audacity and the effrontery to ridicule and scoff at suggestions which emanate from this group. Furthermore, he indicates his inconsistency most definitely by voting opposite to the way in which he talks, when it comes to a vote. So, when it comes to a matter of consistency, I suggest that the hon. gentleman resort to a little introspection.
I think the only members of this house who have spoken logically on the principle involved in this particular bill and similar bills are the members of the Social Credit group. We have heard much criticism on the part of certain hon. gentlemen in the Liberal party; we have also heard a great deal of it from the Conservatives and from the C.C.F. But if they were in the seats of the mighty, what policy would they pursue? What would be their source of funds? What would be their method of attempting to achieve the results which the government alleges it is attempting to achieve? With regard to the Conservative party, I cannot imagine their using any different policies whatsoever from those which the government is using. They have not indicated that they have any other policy. If they are to reduce taxation in some respects, they must raise money by other means. Thus far they have not subscribed to the Social Credit way of doing it, and they have not any of their own. So I think they are certainly guilty of inconsistency as well.
I think the same reasoning can be applied to our C.C.F. friends. They moved an amendment this afternoon in an attempt to abolish at least one section of this measure, in order to reduce taxes which are being levied or which might be levied. But on the other hand, if they were in office and were managing the government, what would they use as a source of funds? How would they derive their revenue? So far as I am able to observe from listening to their statements, they would resort to taxation. They have not suggested any alternative. So whether, under their administration, they raise the money through this particular means or not, they would still have to resort to taxation. In advocating the policies which they have advocated, I cannot see how they can consider themselves to be consistent.
Therefore that leaves only the members of the Social Credit group who, in my opinion, have spoken consistently on this. All through the years we have advocated drastic reductions of taxation, even to the point of total elimination of dominion taxation. But we have not left it there. We have indicated an alternative for the raising of money.


Frederick Samuel Zaplitny: What is your alternative?


Walter Frederick Kuhl: I think the hon. gentleman knows it just as well as any of us who have made any remarks on the subject.


Frederick Samuel Zaplitny: I should like to hear it again.


Walter Frederick Kuhl: If the hon. member really wants to know, I will suggest to him that the
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government, which has the supreme prerogative over money, is not obliged to raise any money by taxation. It has at its disposal the power to create and issue all the money it needs.


William Henry Golding: Order.


Walter Frederick Kuhl: All right, Mr. Chairman. I do not intend to launch into a discussion of money theories. I was just answering a question which the hon. gentleman put to me. But I repeat that I and my associates in the Social Credit group are definitely opposed to this measure. We stand for a drastic reduction of taxation, and we have indicated an alternative.
There is one aspect of the present situation which I think has not received the attention it should have received, namely, the positive side rather than the negative. The minister, his supporters and others have suggested that the objective of this measure is to curtail consumption. Why place so much emphasis on the curtailing of consumption? Why not look at it positively and consider whether we cannot do something more about stimulating production? That is an aspect which, according to my observation, has not received much emphasis during the course of this debate. I feel certain that one means of stimulating much production in this country is to reduce taxation. I am sure that every hon. member has heard farmers, workers and businessmen in general say that they would be glad to produce a little more but for taxation. What do we invariably hear? The farmer says, "Why should I raise my production when, as a consequence, I do nothing but pay more taxes?" The worker says the same thing, namely, "Why should I work overtime, bring my income up into the next bracket and penalize myself by so doing?" All the way through the whole economy we find that, as a result of taxation, there is a certain amount of discouragement of production.
Therefore I suggest that we place a little more emphasis on the positive side of our program and see whether we cannot do something by way of stimulating production, and thus provide ourselves with more goods with which to take care of the needs abroad and of ourselves. I think the best way to do that would be to remove those elements of our economic life which discourage production, one of which, in my opinion, is taxation. So I suggest that the policy involved in this resolution can do nothing but discourage still further the production of very much needed goods in this country. Therefore I, together with my

associates, will oppose it; and I personally think the whole thing should be consigned to the nether regions.


Mr. McIVOR:: I have a question to ask, Mr. Chairman, but I did not know whether I should put it in another form. We have been discussing this matter since before Christmas, and there has been a great deal of repetition. Even today the minister said more than once, "Again I say"; "I repeat", and so on. I know in the British house there is a way of dealing with this situation; and I am going to ask you, Mr. Chairman, if we have anything in our parliamentary laws or our procedure which will permit us to close off this debate and get on with other business.


Arthur Leroy Smith: Mr. Chairman-


Daniel (Dan) McIvor: I think I should have an answer to my question.


Arthur Leroy Smith: One reason my hon. friend does not get an answer to his question is that under our rules he cannot question the Chair, and that seems to deal with that matter. I am going to take only three or four minutes, which I am sure will please my old friend the hon. member for Fort William.


Daniel (Dan) McIvor: Thank you.


Arthur Leroy Smith: My hon. friend was a much better soccer football player than parliamentarian. He never won a game playing football, so that will give the committee an idea of my estimate of his ability as a parliamentarian.
I am opposed to this resolution, Mr. Chairman, and I want to tell you why. When I listened to the minister on the evening of November 17 I could understand a good many things he said; but when he came to the matter of this excise tax I got lost. I have studied everything he has said since then and everything anyone else has said in connection with this proposal, and this idea struck me. I think it is elementary that if this excise tax merely raises the price of Canadian goods, that is inflation. If it fails and purchases do not continue, that means unemployment. I submit, sir, that today I am in exactly the same position. This thing can go in one of two ways, the one toward inflation and the other toward unemployment. Those of us who live in or have knowledge of the smaller places in Canada know the small businesses which have been wrecked by this measure, and in such cases it has meant unemployment.

Excise Tax Act Amendment
I confess that in listening to the minister I heard two things with which I would be in agreement. One was that we could save United States exchange by an embargo on United States goods. The other was that to the extent we could supplant United States goods by the increased manufacture of similar goods in Canada, to that extent also we would save United States exchange. But if this tax means that we are to decrease that manufacture, then it goes straight against one of the things which the minister spoke of and which he had in mind at that time.
The other evening I asked the minister a few questions. I intend to paraphrase them this evening, if I may. I hope I may do so correctljq but if I fail in that I hope I may be immediately interrupted. The minister said he did not know now, after four months of the operation of the tax, whether or not it was in fact saving United States exchange. Then I asked when he would know, and he went farther and said he was in doubt that he would ever know, because his scheme was three-pronged and he was unable to separate the prongs. As you know, Mr. Chairman, there is a very well known instrument used on a farm, an instrument which is also threepronged. The minister does not know whether he has a sheaf of oats on one prong and perhaps some rather less valuable product on the other. His whole attitude was that he could not tell whether or not this measure was in fact helping the scheme for saving United States dollars.
Therefore, sir-and I close with this-I take the position that I was right in my impression when I listened to the minister on November 17, that internally it meant inflation in one way, if people bought the goods, but that in the other direction it meant unemployment if it raised prices so high that people could not buy them. I still abide by that view; and now, having come here and heard the minister tell me he did not know whether or not this was helping to save United States exchange and that he did not think he ever would know, speaking for the people of this country who are paying these inflated prices, or who cannot buy because they are unable to pay the prices, I am opposed to this measure and will so vote.


Douglas Gooderham Ross: I think it very appropriate, Mr. Chairman, that we should have heard-this evening from a learned counsel who, through his early association with sports, acquired a great deal of common sense. I should like to draw to your attention the fact that "Sport" Smith and his brother played
for the Thistles many years ago, and in his younger days "Sport" was the finest hockey player I knew. Anyone who is interested in sports is bound to acquire a wide range of knowledge-


William Henry Golding: Order.


Douglas Gooderham Ross: All right, Mr. Chairman; I will get to the excise tax. On the other hand, my hon. friend the Minister of Finance over there never had the advantage of taking part in these sports, so that he was not in the same fortunate position. I say this though I am very fond of him and we are all very proud of him. It is too bad he has these strange ideas.
I now have one or two things to say about this.


Some hon. MEMBERS:: Oh, oh.


William Henry Golding: Order. I am sure hon. members would like to get through with this matter tonight.


Douglas Gooderham Ross: Yes, Mr. Chairman; I would like to get through with it as soon as possible, but it is very difficult when you have to deal with a fellow with such low intelligence as the hon. member for Cartier over there.


Mr. HARTT:: Mr. Chairman, I rise to a point of order-


Some hon. MEMBERS:: Sit down.


Maurice Hartt: On a question of privilege; I can answer you in your own kind. I ask the hon. member to withdraw that statement.


William Henry Golding: I would hope the hon. member would withdraw that statement.


Douglas Gooderham Ross: I do not see anything to withdraw. But if the House of Commons thinks I am wrong in saying that, even though I meant it, I will withdraw it. So there you are.


Maurice Hartt: If he were sober he would not say that.


Douglas Gooderham Ross: One reason I got to my feet tonight to say something was this, that it brings me back to radio broadcasting in Canada. The other night I listened to the radio where it was pointed out that there were two sides to this problem. There were some who thought we should devalue the dollar, and others who believed that the austerity program should not be continued. But the whole truth of the matter was not set out. That is what I am getting at.
5849-159J
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We are not getting anywhere at the present time.


Mr. GRANT:: Indeed we are not.


Douglas Gooderham Ross: It has been said that these steps have been taken to save $27,000,000, but we are not told another factor which is worth considering. That is, that before we had this austerity program and before the dollar was revalued we had something like $280 million in United States funds coming into Canada. What happened? Well, the Imperial Oil Company has sold International Petroleum, and we now have $80,000,000 in United States funds coming in here. That is an interesting point.
The other point which we were not told was that when we revalued our dollar it cost $20,000,000 more in dividends. The minister shakes his head, but I tell him that it just cost us $20,000,000 more.


Douglas Charles Abbott: I was not questioning the hon. member's figures. But I was going to say that we are on a resolution dealing with taxation, and I thought perhaps we should stick to it.


Douglas Gooderham Ross: I shall come back to it in a second, but I must repeat that it cost us $20,000,000 more in United States funds. Wrhat is the minister doing? He is doing exactly what I said he would do. He wants to reduce production in Canada. That means unemployment. That is all I have to say.


Stanley Howard Knowles: My remarks on this occasion will be brief.


An hon. MEMBER:: Six times today.


Stanley Howard Knowles: It would not have been necessary if what I moved before had been accepted. We in this group have stated our opposition to these proposed taxes, categorically. We sought to have a vote on the separate clauses before the committee. The house ruled that there are not six separate clauses, but that there is only one resolution before us. And as you, sir, have pointed out to me, that decision of the house must be accepted.
Following that, I moved an amendment to the motion then before the committee, suggesting that certain clauses of the one resolution be deleted. You, sir, ruled that amendment out of order, and at that time quoted from citation 500 in Beauchesne, third edition, on the ground that it deleted certain taxes without proposing any alternative.
I rise now to move another amendment which clearly meets the specifications you, sir, laid down when you ruled my last amendment

out of order. At that time you quoted citation 500 from Beauchesne, third edition; and, incidentally, that is the same paragraph which the Minister of Finance and I were quoting from May, thirteenth edition, at pages 543 and 544. The sentence you emphasized was the following:
Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
I was interested a moment ago in the comment made by the hon. member for Comox-Alberni when he said he shared our opposition to these excise taxes but that he objected to what he called our irresponsibility in failing to propose an alternative. My amendment will meet that situation. It expresses clearly our opposition to the taxes, and it also expresses the sort of thing we feel should' be done to keep the ways and1 means in balance.
I expect that some of my hon. friends in the house will not like the substance of the amendment, but even they will agree that it is clearly in order. Before moving it, there is one other comment I should like to make in reply to what was said by the hon. member for Temiscouata. When he spoke a while ago he saidi I was challenging the decision of the house. I did no such thing. I accepted, perforce-and I believe I used that very word- the decision of the house that we have before us one motion in various parts. That motion, as the hon. member for Temiscouata knows, is amendable.
Citation 335 in Beauchesne, third edition, reads:
A motion may be amended: (a) by leaving out certain words; (b) by leaving out certain words in order to insert other words; (c) by inserting or adding other words.
The amendment I shall move is in line with part (b) of the citation I have just read.
I therefore move, seconded by my desk-mate, the hon. member for Mackenzie (Mr. Nicholson):
That clause 1 of the proposed resolution as amended and clauses 2, 3 and 4 be deleted therefrom. and that the following be substituted
therefor:
"That it is expedient to introduce a measure to impose taxation upon excess profits to the extent necessary to maintain the balance of ways and means."
Amendment negatived: yeas, 19; nays, 81.


William Henry Golding: I declare the amendment lost.

Excise Tax Act Amendment


Harold Aberdeen Watson Timmins: In the original resolution there was included a tax on electric or gas refrigerators and also a tax on electric stoves. I should like to ask the minister why he relaxed the tax on electric stoves on December 8. There must have been some basic reason why the tax was taken off electric stoves. The fact of the matter is that the people who buy electric stoves are the people who buy electric refrigerators. To my mind there is discrimination in favour of one industry and against another when you leave a tax on one article and take it off the other. That is one incongruity.
The second incongruity seems to be in connection with one of the answers the minister gave me this afternoon in which he said that the tax was put on, as I understood him, so as not to permit production to rise in the Dominion of Canada upon goods with United States content, produced for export, beyond the confines of Canada. If it is the purpose of the resolution to block in a sense the production of too large an amount of goods in the country, that seems to be completely at variance with the remarks of the minister of external affairs at Winnipeg on January 23 last when he said that the purpose of the government was to create a genuine exportable surplus large enough to enable us to play our part in the recovery of Europe without having to resort to crippling import restrictions. To my mind the exposition of the matter given by the minister of external affairs and the exposition of this resolution given by the Minister of Finance do not jibe.
There is one other matter I wanted to bring to the minister's attention. The minister said on March 18, as reported on page 2373 of Hansard:
I have hail numerous discussions with representative groups of car manufacturers, and radio manufacturers, because they are two of the larger groups. The car manufacturers do not claim that the tax has yet slowed down the consumption of cars. They tell me that they think it will. Whether they are right or wrong, I do not know. The same thing applies to the radio people. No one has contended to me that the sale of radios has yet been diminished.
I am sure all hon. members have received a memorandum from the radio manufacturers' association of Canada under date of March 5 last. I presume the minister has already read this release, but I should like to call his attention to section 6 on page 3 where it says:
In November, 1947, the last month prior to the effect of the new 25 per cent excise tax, the member companies of our association produced 103,000 radio receivers (not including export production) and reported sales for the same month totalling 102,000 radios. Substantial sales drops were noted in December and in January, 1948, the same companies sold only 39.000 radio receivers-a 62 per cent drop from November. This also represents a drop of over 40 per cent from the sales by the same companies in January of 1947.
Final figures for February sales and production are not yet available but indications are that still further drops have occurred and already there have been drastic cutbacks in factory production and employment.
I should like hon. members to note those last few words, "drastic cutbacks in factory production and employment." We shall have a vote on this matter pretty soon. The minister said a short time ago that he did not know of any drop in sales of radios, but here are figures given by responsible people.


Douglas Charles Abbott: I am delighted to hear that the tax is doing what it was intended to do, but I do not believe that that is possible.


Harold Aberdeen Watson Timmins: There was a drastic drop of 62 per cent from November. I want ta ask the minister whether the intention of this tax is to put the radio industry out of business or whether he ought not to regulate, first and foremost, a situation which could be alleviated in quite a different way from the manner in which he is doing it. I should like to quote a clipping from the Wall Street Journal, as follows:
The more one thinks of it the proposals to deflate buying and stop prices going up by increasing taxation are very dangerous ones. If the government increases taxation, it will spend the money it gets. It inflates its own costs with the avowed object of deflating others.
That is the very thing we are doing with this resolution. The minister must know by now that this is the most unpopular tax that has been before this house in a long time. It is not only unpopular in the house; it is unpopular in the country. I think, as a matter of fact, he is going to stifle the exportation of those products which we have been trying to build up production on, for a long while in this country. If he does not know it, then somebody should tell him right now, while we are dealing with this matter, that there has been a sloughing off of production and a sloughing off of buying in this country. In my opinion this will be considered one of the worst taxes we have had for a long time.


Mr. SINNOTT:: I am reluctant to rise at. this late stage, but I feel I would be remiss in my duty if I did not say a few words at this time. While I believe the measure itself has every indication of proving its value, there' are some things in it with which I do not agree. I always believe that you can catch more flies with honey than you can with salt or pepper.
Excise Tax Act Amendment

I want to make a personal appeal to the minister tonight with regard to refrigerators. If the minister would say to the committee that refrigerators were being taken off the list everyone in the house would let this bill go through.
A refrigerator is essential in the modern home. I know the minister has one and I know all the men who drew up the bill have refrigerators. Wherever electric power has been developed throughout the country, wherever it has been put through rural constituencies, wherever power is available, the people want refrigerators. They have been saving their money for a long time, expecting that their chance would come to get a refrigerator. They now find this tax imposed, which will make them pay $100 more for a refrigerator. That will not stop them from getting one because it is a necessity, but it is a mean tax and the people resent it terribly. A refrigerator, by keeping meat, butter, eggs and other provisions fresh, enables people to cut their living costs by ten per cent. I have made a personal appeal to the minister and he has promised to take the tax off as soon as possible. That is as far as he would go, but I hope that "as soon as possible" will come sooner than he anticipates.


Mrs. STRUM:: Tonight I picked up a menu in the Chateau Laurier, a Canadian National hotel, and I found printed on it a notice "Excise tax 25 per cent."


Douglas Charles Abbott: You must have been in the grill.


An hon. MEMBER:: Dancing.


Gladys Grace Mae Strum: No, I was not dancing. I
want to know by what authority meals are being taxed?


Douglas Charles Abbott: That was the amusement tax imposed by my predecessor during the war in public eating places where there is music and dancing for guests' entertainment. In the dining room upstairs at the Chateau Laurier you do not pay the tax, but in the grill, where there is a delightful orchestra, you .do. It is a form of amusement tax.


Gladys Grace Mae Strum: You should require a notice to be placed on the door outside: "If you eat here, you do it at your peril because there as a 25 per cent tax on meals."


Frederick Samuel Zaplitny: I should like to make one last appeal to the Minister of Finance. Unfortunately we on this side of the house cannot make personal appeals to the minister, so I shall not attempt that.


Douglas Charles Abbott: Why not? Some people do. I have mo restrictions on personal appeals.


Frederick Samuel Zaplitny: This is a resolution which
affects the public as a whole and is not the personal hobby of the Minister of Finance. It was introduced on behalf of the government, and so any appeals made in the house with respect to it should be made to the house.
I wish to make an appeal in relation to the second paragraph which deals with the taxation of automobiles. The hon. member for Fraser Valley this evening hit on something very sound when he said that the automobiles in the first category shown in the schedule, running from SI.200 to S2000-I take it that that is the manufacturer's price, because you cannot get a new car retail for anything like SI,200-


An hon. MEMBER :: What kind of car do you drive?


Frederick Samuel Zaplitny: 
The CHAIRMAN:: Order. Excess profits are beyond the scope of this resolution.


Frederick Samuel Zaplitny: If that is your ruling, Mr. Chairman, I am very happy to bow to it.


Jean-François Pouliot: I have two or three questions to ask the minister. An embargo has been put on certain United States products. A certain amount of customs duties was collected on these products in the year before the embargo was imposed. Can the minister tell the committee what amount of duty was collected on all these items now forbidden entry to Canada, during the year before the imposition of the embargo?


Douglas Charles Abbott: That question came up under Bill No. 3, and I gave some information then as to importations in the previous year of the articles which are prohibited. I have not that information here on this bill, because this tax does not apply to those goods.


Jean-François Pouliot: I understand that, since the government is being deprived of a certain amount of customs revenue on United States products which can no longer enter Canada, a 25 per cent excise tax was imposed on Canadian products as compensation for that loss of customs duty on United States goods.


Douglas Charles Abbott: That was not the intention in putting it on. It was, as I have said, to deter the consumption of goods for a variety of reasons which have been discussed here a number of times. One of the principal reasons is to deter the consumption of goods which have an appreciable United States content.


Jean-François Pouliot: This is my last word. I do not very well understand the imposition of this tax, but I will warn the minister again, and I
will tell him that, while I am not opposed to all the officials of his department, I am opposed to some of them. I have not much support in the house when I complain in this regard, but it will be necessary before the next Liberal convention to have a spring cleaning among the top ranking officials of the Department of Finance, and I say that in all friendliness to the minister and to everyone in the government. It is time we had real Liberal policies, and we shall have them only when we get rid of some of the officials who were put there by the late Conservative administration.


Harry Rutherford Jackman: Exactly what is the situation now in regard to kerosene refrigerators? Were they taken off this list where the excise tax is and put in one of the other schedules?


Douglas Charles Abbott: They were never included.


Harry Rutherford Jackman: We can still get kerosene refrigerators?


Douglas Charles Abbott: I do not know whether kerosene refrigerators are made in this country. I do not think they are, although it is possible that some manufacturers may be able to produce them. I do not think they are made here. At present, importation is prohibited, but I have promised to give consideration to the setting up of a quota for that type of refrigerator under the other bill, Bill No. 3, because such a refrigerator is used primarily in rural areas where other refrigerators are not available.


Harry Rutherford Jackman: The case of kerosene refrigerators is very much the same as the case of motorcars. When one looks at the situation in regard to motorcars, one wonders that the government do not take a different attitude, particularly in view of all that they have said in connection wdth this proposed legislation. For a while, motorcars were like kerosene refrigerators, banned completely; but since November last the minister has finally arrived at a quota for motorcars. As I understand it, and if I do not have it correctly I hope the minister will let me know, there is a certain amount of United States exchange allowed to be used for the importation of motorcars. Am I right in that, that a certain amount of United States exchange is allowed for the importation of motorcars and parts?


Douglas Charles Abbott: That is correct.


Harry Rutherford Jackman: Now that the government has settled the amount of United States exchange which shall be allotted for imported motorcars or parts, why does it still insist upon putting an excise tax on motorcars, ranging in the lower priced vehicles from 25 per cent to 75 per cent in the higher? The
Excise Tax Act Amendment

minister has said that the purpose of the legislation is not to gather revenue for the crown, because it has already more revenue than it knows what to do with. The purpose is to save exchange. But here we have the government allocating exactly and precisely how much United States exchange shall be allowed for the importation of motorcars, so that whether people want to buy far more than would otherwise be available, they cannot in Canada because there is only so much United States exchange.
I have not heard explained to the committee just why the government still insists on using the excise tax, because it seems to me it has already made a restriction, when it saw fit, by allowing just so many United States dollars to be used for the importation of United States motorcars and parts. The result of the present regulations is that those who have the longest purses will be able to get motorcars, while those who cannot afford to pay these extraordinary taxes, the money not being needed by the government, will have to do without any kind of vehicle.
It does seem indeed that such a form of legislation, such a spirit behind legislation, is entirely wrong, because there are still many people who were overseas, who did not have a chance to get a motorcar, and now that they are finding their place in the business world, they would like to enjoy some of the facilities which the average Canadian citizen enjoys, but they find they are up against a 25 per cent tax as a minimum. I can see no reason for it and, as far as I know, the government has not advanced any satisfactory reason, because it has said that there is only so much exchange for the purpose of bringing in motorcars, and when that is exhausted you cannot bring in any more.
We find, therefore, that there will be a certain amount of unemployment created, even in the subsidiary motorcar industries, and that brings me to the larger field of these excise taxes and their effect on employment. There is hardly a towm, hardly a hamlet in this country that has not suffered by reason of the excise taxes which the government has put on, and the sad part about these excise taxes, and the unemployment they create, is that in the great majority of cases the firms involved were new firms made up of veterans. These young men cannot now obtain the substance of their business, so that they have to close up; or if they take the word of the Minister of Trade and Commerce they may look upon these restrictions as of a temporary nature until such time as the government is able to bring its United States exchange

account into better balance, and they may go to their banks and endeavour to get enough working capital to keep their shows going, hoping that each passing month may see the end of their troubles. As a matter of fact, those of us who are here and who have looked at the problem realize that the time is most indefinite, and when the minister mentions months he may have meant years. So that these young men who have started up business might as well have folded up and let their staffs go.
In one case a group of veterans from the navy and the air force had already 115 people employed. They were importing radios and other household electrical machines from the United States, and they found they were absolutely without any further source of supply when these bans became effective last November. They have had to go out of business, throwing out of employment nearly 100 people. Some are keeping on in the hope that they will eventually, in not too long a time, be able to start up in business again.
Inj the same city I am thinking of, another company that is severely affected by the ban on the importation of fresh vegetables and fruits had to let 250 people go because there is no volume now to be handled; when the summer crops of our own vegetables and fruits come in there will not be the men to handle the produce, and the cost of merchandising will go up substantially. All of these are strong reasons against the passing of these resolutions. As a matter of fact when one considers the taxes on motorcars alone, it must be realized that even on the cheapest four-door sedan car the excise tax is $268.05, and the sales tax on top of that is S85.78, or a total tax-without even the duty or any of the various other things included-on the cheapest four-door car in the country of no less than $353.83. To my mind that is a shocking burden to put upon the young man, particularly the veteran, who wants to get a new car. Most of the population were perhaps fairly well supplied before and, like the minister himself, may have the pleasure of driving a 1939 model, as I think he mentioned to the house the other night.
I feel that these excise taxes were put on for no other reason than to satisfy the feelings or the prospective feelings. I might even have called them, of the United States administration. We were careful, because of our requirements of vital products of the United States, not to offend them in any possible way. We have put on these heavy excise taxes and have caused unemployment and an increase in the cost of living in our own country. As a matter of fact, it would

Excise Tax Act Amendment
be interesting to know, and I think before we close this debate, we should hear from the Minister of Finance in this regard, just what progress he is making with the United States government in regard to tariff regulations. I understand that, since we put on these excise taxes, the United States administration, when it comes to the payment of customs tariff, assess their customs rate against the Canadian price plus the excise taxes in Canada. This, of course, makes it prohibitive for the Canadian manufacturer to export to United States markets. We have already found that there has been a certain amount of tinkering or changing of the schedules, because the minister realizes that we just cannot put out of business many manufacturing concerns in Canada who would be able to export to the United States were it not for the fact that we have these excise taxes on here, and that United States officials, for tariff purposes, assess their duty against the Canadian price plus our excise tax.
We have seen what the administration here have done when they run into circumstances like that. They have withdrawn certain articles like golf clubs-and I think the minister mentioned one or two others the other evening-from the list of articles which would be subject to the excise tax. I think we should know about this. We have always looked upon our neighbours to the south as friendly and co-operative, and we hope that they are living in the spirit of Geneva just as we in this country are not only living in that spirit but are going farther and are extremely careful not to do anything to offend our neighbours to the south. I think we should have a clearance from that country, so that what little export we were doing in certain lines would not be completely obliterated because we now have a domestic excise tax. The minister should give some indication as to what progress has been made in Washington in that regard before we are asked to make any decision on this vital matter.
It has always been of great concern to me that neither the Minister of Finance nor the Minister of Trade and Commerce, so far as this committee has learned, has made any strenuous effort to increase the export of Canadian products to the United States. Certainly one would have felt that last June or July, when they saw the situation getting so desperate with regard to United States exchange, before they contemplated measures such as we have before us today they would have thought of alternative measures, and in particular would have endeavoured-both of them, I should have thought-to go to the
United States to see if the United States government would not make it possible for that country to use about one-half of one per cent of its total national income for increased imports from this country. Then our whole problem of United States exchange would have disappeared. But we have had no indication whatsoever in regard to that.


William Henry Golding: Order.


Harry Rutherford Jackman: Quite so. I think I am in order.


William Henry Golding: The hon. member should deal with the resolution.


Harry Rutherford Jackman: I have the resolution before me. The resolution is that the excise tax be placed on certain articles set out in the schedule. The whole purpose of that resolution is in order to raise United States exchange or to prevent the use of United States exchange by Canadians. So I am suggesting that both ministers, in place of going to the United States just to borrow some money and to humiliate our country, might have done something in order to see if the people of the United States would not have taken more Canadian products; because, while they talk about full employment-and I think that is an expression they have used in this debate on a number of occasions-full employment is not necessarily the same as full production. If one has working everybody who could reasonably be expected, to work, it is still possible to get more modern machinery. That is one of the things the manufacturers and industrialists of this country have been doing in the last two or three years. When we get more modern machines, we can turn out more goods and men are released to do other things. There are plenty of opportunities for them in a great variety of fields as the present time. Therefore I feel that the government have not handled this question in a way which was constructive but, on the other hand, have endeavoured to put Canadians out of employment. It made little difference to the government on whom they put these taxes, as long as they were not affected themselves. But if it were their ox that was gored, they would soon realize what the feeling is across the country from one end to the other. There is not a town or hamlet in which there is not a number of firms, particularly younger firms, which have not been disastrously affected by the excise taxes which are now before this committee.


Ronald Stewart Moore: I should like to ask the Minister of Finance one question in connection with automobiles.
Excise Tax Act Amendment

Mr. MoIVOR: Just one question?


Ronald Stewart Moore: Yes. In the Financial Post an article appeared recently which stated that one British automobile manufacturer could supply the total quota that Great Britain was allowed for manufactured cars. Since several British plants have been re-tooled to produce cars which would meet Canadian conditions better than they have in the past, will the minister consider increasing the British quota?


Douglas Charles Abbott: That is under the other measure. That is under Bill No. 3, which we have already passed. I am not familiar with the quota situation with regard to British cars, but that comes under import restrictions which are imposed under the measure the house has already passed.


Donald Methuen Fleming: At this stage of the debate it would be presumptuous on my part to do anything that might appear to sound like offering advice to the minister. I know it would be rejected. But even at this stage I wish to offer the minister what seem to me sound reasons why, particularly in the light of things that have happened today and things that have been said this evening, he should withdraw this measure. The minister smiles. I want to assure him that in what I have to say tonight I am going to deal seriously with points he has raised in this debate, because I think they ought to be seriously answered. I am going to direct my remarks this evening, and they will be brief, to the minister in the hope that he will listen to reason even at this stage; that he will forget about matters of saving face and sit down deliberately and think about this measure in the light of statements that have come from his own side of the house tonight.
It is quite apparent that if hon. members on the other side were free to speak their minds on this matter it would arouse on the government side of the house such a tide of opposition to this measure that the minister would be compelled to withdraw it or face defeat upon it.


Mr. BERTRAND (Laurier):: How do you know that?


Donald Methuen Fleming: In answer to my hon. friend the Postmaster General, I think enough members on the other side of the house have spoken tonight on this measure in rebellious terms to make it quite clear that they do not stand alone on this matter, that they are simply the more courageous of those who entertain rebellious feelings concerning this measure. Theirs are not simply voices crying

in the wilderness, from the other side of the chamber. I for one am convinced, Mr. Chairman, that they do speak for many of the members sitting to your right in this chamber.


An hon. MEMBER:: Speak for yourself.


Donald Methuen Fleming: I will speak for myself, and I will also speak my mind concerning the remarks of some who have spoken tonight. Surely this afternoon the minister had proof abundant of the utter unpopularity of this measure with his own supporters in this house; and he certainly has abundant proof of the unpopularity-yes,	the	unacceptability-of
this measure throughout the country.
I said I would deal seriously with some points the minister has advanced in support of his measure. I do not propose to repeat what I said in this house, recently on the constitutional aspects. At the conclusion of those remarks a week or so ago I was challenged by the hon. member for Halton, who in effect said that because I had confined myself to the constitutional, or rather the unconstitutional, aspects,of the measure, therefore apparently I did not have any other objections to it. I assure you, Mr. Chairman, that I have an abundance of objections to this measure, any one of which, if placed before people who are free to express their minds, would be sufficient to condemn the measure.
First, what are the grounds on which the minister relies to justify an unconstitutional measure which seeks to increase the load under which the round-shouldered taxpayers of this country are groaning today? In the first place he says it will help the United States dollar situation. In the course of this debate the minister has had an abundance of opportunity to prove to this committee where and how any saving of United States dollars will be made, and he has utterly and completely failed to do so. It is not without significance that the minister had not one figure to bring before the committee as to the estimated saving of United States dollars. If, as the minister professed it to be, that was a principal objective of this measure, then certainly common sense and even the most elementary requirements of this House of Commons would have dictated that he must have some estimate of the saving in United States dollars to put before the committee in justification of this sweeping measure. We have debated this matter; we have asked questions and repeated them, and we still have to hear from the minister one word concerning the estimated saving of United States dollars. Think of it. Here we are, four months and more since the minister made his radio announcement on

Excise Tax Act Amendment
November 17; and even at this late date he has no estimate of the saving of United States dollars this measure is said to be capable of bringing about. When will he get it? If ever there was a fine example of blundering on the part of a government, it is this. The minister says it will save United States dollars. Four months later he has not even an estimate of the quantity of United States dollars that will be saved. Can one imagine any more complete condemnation of this measure than that fact alone? Not one item of proof is brought before us that this will save a single United States dollar; but as a parliament we are asked to penalize the Canadian consumer and the Canadian producer, to take a jump in the dark because the Minister of Finance, without the slightest element of proof, says that somehow this measure will save United States dollars. If this House of Commons has not taken leave of its senses it will not heap these penalties upon the Canadian consumer and the Canadian producer, without some proof of benefit with respect to the saving of United States dollars beyond what we have heard so far.
So much for that argument. The next point advanced by the minister in his speech in this house on December 16, as reported at page 336 of Hansard, in effect was this: We do not want to do any harm to United States producers ; we want to preserve a market for them here in Canada. These were his words:
But by imposing these excise taxes we are doing something to protect the legitimate longer-range interests of these businesses.
What are these businesses? These are the United States producers and their dealer organizations here. He went on:
While the Canadian manufacturers are temporarily relieved of competition from the United States, their unexpected advantage is being at least partly offset by the effects of the special taxes. Without these taxes, prices of many of the articles affected could have risen a good deal, to the benefit of the manufacturers and distributors.
As a result of the taxes, it is the public treasury that benefits.
To me that is the most transparent exposure of the iniquity of this measure. The minister seeks to justify it on the ground that, while he is denjdng the Canadian consumer the things that consumer wants and has had hitherto, he will not permit the Canadian producer to step into the breach and fill the requirements of the Canadian consumer. "No", he says; "we will keep the Canadian producer out of the field. Why? Well, we do not want to hurt the United States producer. Therefore we will keep both
the Canadian and the United States producer out of this field. The Canadian consumer can do without, or he can submit to the penalty of an additional 25 per cent impost. But we will give no benefit to the Canadian producer; we will treat the Canadian producer and the United States producer on a footing of equality in this respect." That is proof enough to me, Mr. Chairman, that this measure is worthy only of the condemnation of this house.
Then, as a third argument, and a sort of merry-go-round argument it is, the minister says: "Oh, we will use this fiscal method. We will drain off purchasing power by this added tax. We will slow down consumption." Let us analyse that argument. I call it an audacious argument. If that argument is sound in this particular, then surely it is sound in other particulars as well. So the minister is putting before the committee the argument that it is good government policy in times like these to soak the taxpayer, to make him pay money to the federal treasury so that he will not have money left to spend on the goods he needs. If that is a sound argument as applied to goods within the range enumerated in this resolution, then if this committee chooses to give its imprimatur to that argument we may be very sure the minister will take fresh courage and be prepared to apply this argument to other goods as well. Where do you stop with an argument like that? I say to the minister that measures of this kind, applied to a range of goods which include many downright necessities, are inflationary. The minister has not confined himself, in the enumeration before us, to those articles which are clearly of the luxury class. Far from it. Just look at some of them, and then let any hon. member say that these are not necessities for many Canadians.
Think of them! Irons! The minister says that the Canadian housewife can do without electric irons because, they are not a necessity. "Go and heat your iron on a woodstove"- apparently that is the argument of the minister. He says to the Canadian housewife, "You do not need an electric iron. An electric iron is not a necessity for you."
Then, who will say that razors are not a necessity? Is the minister proclaiming a new fashion in Canada?


Douglas Charles Abbott: Electric razors are not a necessity.


Donald Methuen Fleming: I should have thought electric razors were a necessity for some people.
Excise Tax Act Amendment


Douglas Charles Abbott: I have never used one, myself.


Mr. MITCHELL:: The hon. member does not need a razor.


Donald Methuen Fleming: I cannoit hear some of the remarks from hon. members over there. Let the minister rise in his place and say that electric toasters are not a necessity in Canada. How many Canadian housewives in areas where there is any electric current available are prepared to agree with the minister when he says that electric toasters are luxuries the housewife can do without? Let the minister stand up on a public platform in Canada and tell the housewives of Canada that electric toasters are luxuries they must do without. Let him have the courage to tell them that. He is saying to the Canadian housewife, "Just you buy an electric toaster, and I will levy a 25 per cent tax against you." And when that is done he tells us it is done in the name of draining off surplus purchasing power! Whose purchasing power is he draining off? Is it the purchasing power of -the wealthy? No, it is not the wealthy who are suffering from this fax. If we have had any discriminatory measures before this House of Commons at the present session-and we certainly have had a number of them-this piece of legislation is the most discriminatory of them all. It is the rankest kind of discrimination against the people of small means.
Does the minister mean -to tell me that the housewife who wishes to have a cheap electric toaster-not an expensive automatic toaster, but just a cheap electric toaster-is to be called upon by this government to -pay a 25 per cent impost upon it. And he tells this to us in the name of directing the Canadian economy along paths which are in keeping with the government plan.
If the government is prepared to admit that it is embarking upon an era of planned economy, then here is apparently the first long step in the process. For my part, I do not want any of this government's planning of the affairs of the people of Canada, when the minister conceives it to be government policy, and a necessity on the part of the government, to say to the housewife who is already having a hard enough time to make ends meet, "If you want to buy a new toaster, even a cheap one to replace your broken toaster, I am going to charge you an additional 25 per cent tax on it, because I think it is good for you and also for the Canadian economy."

That is what the minister is saying to the housewife today. He says he knows better than the housewife how her dollar ought to be spent. And he says this is -not an inflationary measure. What is it that causes inflation? Surely it is a situation wherein the supply of goods is -not adequate to fake up the purchasing power. How is the minister to justify this -tax as an anti-inflationary measure? He puts -these things beyond the reach of people who -need them, people of small means.
These taxes are not eonfi-ned to expensive articles. These are taxes which are applied to all articles of the kind, regardless of how dear or how cheap they may be. And to me, that is a complete exposure of the fallacy of the minister's argument in support of what he calls his fiscal policy.
The last argument the minister has dared to advance in- support of this iniquitous measure is that the government can very well do with the revenue. Is it not amazing talk coming from this government which, for many months past, has been busy cheering itself and shouting from the housetops about the great surplus it has been rolling up this year? How did this surplus come about? Well, we shall have something to say about that at the -proper time, as to whether it is a genuine surplus or not. But let us take it on the basis upon which the government has put it forward. It is boasting about having a surplus of three-quarters of a billion dollars in the first eight or nine months of the fiscal year. The minister says, in the face of that,. "We can do with the revenue from this measure".


William Henry Golding: Order. I suggest that the hon. member confine his remarks. to this measure.


Donald Methuen Fleming: I say most emphatically
I am dealing with this measure. I am answering the argument -put forward by the Minister-of Finance in support of this very measure, when he said he could very well do with the revenue from it. We will- find his words at. page-


Humphrey Mitchell: I would suggest that the hon. member speak louder and address the Chair.


Donald Methuen Fleming: Mr. Chairman, I will speak as loudly as it is necessary in order to be heard in this chamber. I shall continue to address you, sir, and I suggest to the minister who has just spoken that for once he make a serious endeavour to abide by the rules of the house which call upon a member to rise

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in his place and ask permission to ask a question, and not to blurt out these interpolations as he is doing. It has got to'the point where no one takes his observations in the middle of a speech seriously any more.
Here is what the minister said. At page 336 of Hansard, dealing with this measure, along with other measures, he said, "At the same time, additional revenue will not be unwelcome." At a time like this, when the rank and file of the Canadian people are having a difficult time to meet the rising costs of living, and when they are having a difficult time to meet their tax burden, and at a time when the minister has been boasting from the housetops about his unprecedented budget surplus, how has he the temerity, I say, to come before the House of Commons of Canada to seek to justify an additional impost upon the ground that he can do with the additional revenue that it promises? Any minister of finance at a time like this who seriously puts before the House of Commons that argument, in purported justification of a demand for an additional impost upon the Canadian people, has forfeited any right to be taken seriously in the House of Commons in what he says.
Indirect taxes, again! We on this side of the house have been fighting against this crushing load of indirect taxes. This is the kind of tax which bears so heavily upon the consumer. This is the kind of tax which bears relatively so much more heavily upon the man of small means than upon the man of larger means. We fought that fight last year. We are going on fighting that battle over again for the small man in this country, against the attempt by this government to heap the load upon him. The small man may not see these hidden taxes which bear so heavily upon him. Here we have a government which has already this year taken out of the pockets of the Canadian people more than a billion dollars in indirect taxation. They like to do it, because they think the Canadian taxpayer does not realize how much he is paying in these hidden taxes. The money is coming out of their pockets just the same; and the Minister of Finance thinks that somehow these taxes will be so hidden in the price of the commodities the consumer has to buy that he will not notice the tax, and that he will not have any way of voicing his true opinion and his resentment against these additional levies.
The government policy, if you can say that this government has a policy at all, is just so shot through with contradiction that it is utterly impossible to rationalize what the
government is doing. It is talking in one breath about the cost of living; we are hearing a great deal about how important it is that people should keep down prices, but here this government, by the most deliberate and barefaced act, is seeking to increase those prices, not by five per cent or ten per cent but by 25 per cent. It is a shocking demonstration of duplicity on the part of the government, a contradiction in every term. The government is contradicting itself. In one breath the government is talking about the desirability of keeping down the cost of living, and then the government turns around and, by its next act, adds to the cost of living with these iniquitous and exorbitant imposts.
We have been hearing something about inventory profits, profits that come about by reason of the advances in prices. Just a few days ago the Minister of Finance told this house in committee that he was aware that inventory profits had been taken by retailers on goods on their shelves which were within the classes enumerated in this resolution, even though the tax had not been paid upon them. Let this be known to the Canadian people throughout the length and breadth of Canada! He said he would not blame them for doing so. He said he would not blame the retailer for advancing the prices of articles on his shelves in these classes of goods by the 25 per cent, even though they had not paid the tax. He said he would not blame them, that it was all right to take an inventory mark-up in that way.
Do you realize, Mr. Chairman, what that means? The dominion Minister of Finance is saying to the Canadian retailer, "All right; go ahead; charge up your 25 per cent on the cost of these articles as you sell them over the counter to the consumer. It is all right; you have not paid the tax on them, but we are taxing some fellow farther back and by and by, some months from now, you may be getting some of these tax-paid goods on your shelves; but it is all right; put on your mark-up now." That is the very government which has been deprecating mark-ups by retailers in other respects, but approves them as long as they are related to this government's iniquitous tax.


Douglas Charles Abbott: It has been standard practice ever since confederation.


Donald Methuen Fleming: The minister says it has been standard practice. I say to him that is the old story. Every time I pick up Hansard following my having said anything I find Hansard larded up with the interjections of the minister.
Excise Tax Act Amendment


Douglas Charles Abbott: That is the first interjection I have made in thirty minutes.


Donald Methuen Fleming: He puts his interjections on Hansard in contravention to the rules of the house. When I pick up Hansard the next day I find his quips on Hansard. He should either follow the rules of the house or just let us have a free-for-all discussion without regard to the rules of the house. It is just not fair for some to be compelled to follow the rules of the house, while the Minister of Finance regards himself as standing above all the rules of the house.
Let it be known that the Minister of Finance has condoned a 25 per cent mark-up on goods of the classes enumerated in this resolution as long as they were on the shelves of the retailer before the enactment of these taxes which were imposed by a radio announcement on November 17, whether the tax had been paid or not. The minister says it is standard practice. He knows it has been done. He was apparently aware that it would be done. He apparently approved it. I say to him that would cause any responsible minister to hesitate before imposing such an iniquitous tax, if he knew it would occasion inventory profits of 25 per cent.


Mr. BAKER:: Is the hon. member trying to talk this out? We would like to know whether he is trying to delay the legislation or not?


Donald Methuen Fleming: I know the hon. member and I think his question is quite unworthy of any hon. member in this house.


Some hon. MEMBERS:: No.


Donald Methuen Fleming: I think he knows me well enough to know that I am perfectly serious in what I am doing. I shall certainly finish before eleven o'clock. If there are a few more interruptions I am quite prepared to answer them, but those who make the interruptions or cause them to be made must take full responsibility for the length of time consumed in making necessary answers.
You require no further proof of the utter irresponsibility of a measure of this kind, the utter iniquity of the imposition of a tax imposed over the radio than the fact that the minister has changed these most illegal taxes. Taxes have been removed from some of the original classes, just because the minister has waved his hand and said, "They are off." Then he says to the people, "You can get the taxes back." How are the people who paid these taxes or who paid the inventory mark-up to get them back? How many purchasers will be able to go back to the retailers and give proof of having paid this 25 per cent? It might be

all right in the case of a small store with a small clientele, but it would be quite impossible in the case-of large stores. People do not keep track of these things. They did not know that they would have an opportunity of going back and collecting this 25 per cent tax. They did not know that the minister would change his mind and see in part the folly of his ways. I wish he had seen it completely. The whole thing has just thrown Canadian business into a turmoil so far as the classes of goods enumerated in this resolution are concerned. This is my final word.


Some hon. MEMBERS:: Oh, oh.


Donald Methuen Fleming: If hon. members opposite knew how they encourage me, perhaps they would not be quite so vociferous.


Humphrey Mitchell: Only ten minutes more.


Donald Methuen Fleming: My final word to the Minister of Finance is this. He may feel that there is a question of personal prestige or face involved in his standing subbornly on this tax. I wish to assure him as one who, I think, is giving him better counsel than a lot of people around him, that he will be a bigger man in the eyes of the Canadian people if he comes forward now and admits his mistake and withdraws this tax. The minister knows that such withdrawal would be received with acclaim throughout the length and breadth of Canada.
If the minister persists stubbornly in the imposition of this tax, this tax which has been conceived in illegality, which has been levied illegally, which has been exacted at the expense of the constitution and extorted from the people of Canada, then I tell him that this government and the minister will be sorry for it one day. The best advice that anyone can give to the Minister of Finance today is that he forget about questions of personal prestige or political face and stand up courageously and manfully, and withdraw this resolution.


Douglas Gooderham Ross: Mr. Chairman, I
rise on a question of privilege. Unfortunately when I was speaking a little earlier in the day I did not have my hearing aid with me. I appreciate the fact that there are many members on both sides who speak so that I cannot hear them. I said something to the hon. member for Cartier. I said to him that I was speaking in a way that he probably would not understand1 what I was saying because of average intelligence and so on. You drew my attention to the fact that I should not have said that. He drew my attention to the fact that I should not have said that. I do not

2o01
Excise Tax Act Amendment
think I should have said that. On the other hand, I do not think the hon. member for Cartier is a gentleman. He said something which I do not think any member of the house should1 say.


William Henry Golding: Order. The hon. member will have to withdraw that remark. It is not in order to call another member not a gentleman.


Douglas Gooderham Ross: I do not think he was.


William Henry Golding: The hon.
member will withdraw that remark.


Douglas Gooderham Ross: No, I do not think I should withdraw it. It is my own thought and I expressed it.


William Henry Golding: I must ask the hon. member to withdraw.


Douglas Gooderham Ross: If the chairman thinks that the hon. member is a gentleman, I withdraw my remark, but I cannot help having my own opinion. On the other hand, Mr. Chairman, I think you should call the hon. gentleman to order for saying that I would not have said what I did if I had been sober. I leave it to the house that I made a fairly good speech and that I could not have made the argument I did if I was tight or drunk. Therefore I ask the hon. gentleman to withdraw his remark.


Some hon. MEMBERS:: Carried.


Douglas Gooderham Ross: Withdraw.


William Henry Golding: I think the hon. member for Cartier should also withdraw the statement he made.


Maurice Hartt: Mr. Chairman, on your ruling I take the word of the hon. gentleman and withdraw.


John George Diefenbaker: Mr. Chairman, I am sure that you will have noticed the great anxiety shown by my hon. friends on the other side of the house in the last few minutes to come to a vote. This afternoon they had an opportunity to be here to vote, and they did not show very much desire to be here and vote. Having regard to what occurred this afternoon, I do not think it is out of place at this time to discuss in general this resolution and to put to the minister some questions that still remain unanswered.
I have not taken part in this discussion, but one matter I did want to bring to the attention of the minister has to do in general with the excise tax. I refer particularly to the excise
tax on tobacco and, in particular, to tobacco that will be exported within the next few months to Europe and the continent under the Marshall plan.


Douglas Charles Abbott: There is no reference to that in this resolution.


John George Diefenbaker: No, but I intend to ask that it be included. The situation today in so far as the tobacco industry is concerned is that in 1947 in this country 98,146 acres of tobacco were grown, with a total production of 90.360,000 pounds. On that tobacco there is, of course, a very great excise tax. I am not rising for the purpose of taking up any extra time but I want to bring this to the attention of the minister. I recently visited in that part of Ontario where the tobacco industry has advanced by leaps and bounds within the last few years. My understanding is that this year there is a possibility that there will be a production over and above what will be consumed in Canada or be exported. Having regard to the fact that, under the Marshall plan when it comes into existence, purchases will be made in Canada for export to Europe and that one of the things greatly desired in Europe is cigarettes, my suggestion with a view to increasing production in this country is that the minister should make provision whereby, in so far as exports of tobacco are concerned under the Marshall plan to Europe and generally to other parts of the world where the plan will be applied, the government of Canada remove the excise tax from such exports. That would give encouragement to the production of tobacco in this country.


Douglas Charles Abbott: There is no excise tax on exported tobacco.


John George Diefenbaker: I appreciate that, but I am speaking of cigarettes produced in Canada and exported in that manner.


Douglas Charles Abbott: There is no tax imposed
on that.


John George Diefenbaker: I have the authority right here before me when the minister says there is no tax.


An hon. MEMBER:: Eleven o'clock. You made it.


John George Diefenbaker: That remark of my hon. friend is entirely unwarranted. I would not have expected it from him, but I know that at this time of night remarks are sometimes made that we would not make at other times.
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William Henry Golding: Just before I leave the chair, may I recall that the hon. member for Fort William asked a question this afternoon in regard to the rules in the British house, and I think I should tell him what the rule is there. It will be found in Beauchesne's Parliamentary Rules and Forms, paragraph 287, which reads:
Mr. Speaker, or the chairman, after having called the attention of the house, or of the committee, to the conduct of a member who persists in irrelevance, or tedious repetition either of his own argument, or of arguments used by other members in the debate, may direct him to discontinue his speech.
That is standing order 19 of the British House of Commons.
Resolution stands.
Progress reported.



BUSINESS OF THE HOUSE

John Bracken: What will be the business tomorrow?
Mr. ST. LAURENT: It is the intention of the government to carry on with this resolution and with the other stages of the measure just as expeditiously as the rules of the house permit. If, in spite of what took place today, that should be accomplished before the end of the day tomorrow, the next measure to be taken will be the resolution of the Minister of Finance to remove the tax on tea and coffee. That resolution was dealt with and progress reported on December 19, as appears at page 536 of Hansard. If and when that is disposed of we shall proceed with the second reading of Bill No. 171, to amend the Agricultural Products Act, and after that with interim supply and supplementary estimates.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, March 23, 1948