1948-06-28

[Stage Direction]
Report of Canadian delegation to united nations conference on freedom of information, held at Geneva, March 23 to April 21, 1948,- Mr. St. Laurent.
Old age pensions regulations, established by order in council P.C. I860 of April 29, 1948.- Mr. Martin.

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

Mr. ASHBY:: 1.	How much new paper money was issued in each of the years 1927 to 1947?
2.	What are the names of the companies which made this paper money?
3.	What year was this paper money printed?
4.	What were the denominations of this paper money ?
5.	Do the people of Canada own this paper money?
6.	If not, who or what institution claims ownership of this paper money?
7.	How much metal money (coins) was issued in each of the years 1927 to 1047?
8.	In what years or year was this metal money minted?
9.	What -were the denominations of this metal money?
10.	Do the people of Canada own this metal money?
11.	If not, who or what institution claims ownership of this metal money?
12.	How many units of account or symbol dollars w^ere created in each of the years 1927 to 1947?
13.	What are the names of the institutions or companies vrhich created these units of account or symibol dollars?
14.	Do the people of Canada own this symbol or credit money?
15.	If not, who or what institution or companies claim to own this symibol money?
16.	Has any other kind of legal money than the above been created and issued by any institution or individuals in Canada?
17.	If not, from what source does interest money come?


Mr. BELZILE:: 1. Total	active	note circulation	(Bank ofCanada notes, dominion notes in	public cirdilation and chartered bank note	circulation,the latter	being	an approximate figure only	since 1944)	Amount	Netout-	changestanding	duringDec. 31	year(In millions of dollars)	1926 	
209	. .1927 	
215	+61928 	
222	+71929 	
213	-91930 	
184	-291931 	
175	-91932 	-181933 	
162	+51934 	
173	+111935 	
1S3	+ 101936 	
200	+171937 	
214	+ 141938 	
216	+21939 	
253	+371940 	
347	+941941 ....	
449	+ 1021942 ....	
619	+ 1701943 ....	
769	+1501944 ....	
910	+ 1411945 ....	
989	+791946 	
1,030	+411947 	
1.029	-12.	If this question means the companies that printed bank notes, the answer is the Canadian Bank Note Company Limited and the British American Bank Note Company Limited.3.	Such notes have been printed in every year for many years past.4.	Dominion notes were issued in denominations of 25 cents, $1, 82, $4, S5, $50. $500, $1,000, $5,000 and $50,000. Bank of Canada notes have been issued in the denominations of $1, $2. $5, $10, $20, $25, $50. $100, $500 and $1,000. Chartered bank notes have been issued in the denominations of $5, $10, $20, $50 and $100.
5 and 6. This paper money is owned by the particular individuals, firms and corporations which have it in their possession.
Questions

7. Amount of subsidiary coins estimated to be outstanding:
Amount	Net
out-	change
standing	during
Dec. 31	year
(In millions of dollars)
1926	
30	..1927	
30	..1928	
31	+11929	
32	+11930	
321931	
33	+r1932	
33	..1933	
33	..1934	
34	+11935	
341936	
341937	
35	+11938	
37	+21939	
39	i 21940	
45	+61941	
49	+41942	
54	+51943	
64	-1-101944	
69	+51945	
74	+51947	
76	^8.	Canadian subsidiary coinage has been issued every year since 1858.9.	Subsidiary coins are issued in the denominations of lc, 5c, 10c, 25c, 50c and SI.
10 and 11. These coins are owned by the particular individuals, firms and corporations which have the coins in their possession.
12.	It is not possible to answer this question as its meaning is not clear.
13,	14 and 15. Answered by No. 12.
16.	Legal tender money in Canada consists of Bank of Canada notes; silver coin for a payment of an amount not exceeding ten dollars; nickel coin for a payment of an amount not exceeding five dollars and bronze coins for a payment of an amount not exceeding twenty-five cents. In addition gold coins of Canada issued in the denominations of $2.50, $5, $10 and $20, gold coins of the United States issued in the denominations of $5, $10 and $20 and the British sovereign or any other gold coin of the United Kingdom being a multiple or division of the sovereign, are legal tender in Canada.
17.	It is not possible to answer this question as its meaning is not clear.


STEEL FOR MANUFACTURE OF NAILS
Mr. KNIGHT:: 1.	How much additional steel has been released for nail manufacture since the passing of the order in council of June 1, 1948?

2.	What companies received additional material, and in what quantities?
3.	Has any steel for nail making been released to (a) Saskatchewan Federated Co-operatives Limited; (b) any co-operative company?


Mr. McILRAITH:: 1.	1,000 tons.
2.	It is not in the public interest to reveal the details of private business of individual companies.
3.	(a) No; (b) no.


MOTION FOR PAPERS
Mr. BLACK (Yukon):: For a return showing any request, recommendation, advice or suggestion from the controller or commissioner of Yukon to the minister, deputy minister or any official of the Department of Mines and Resources that section 78 of the Yukon Quartz Mining Act be enforced.


Mr. MacICINNON:: I have had several conversations with the hon. member for Yukon regarding this motion, which has been allowed to stand during his temporary absence from the house. If there are any such communications they would be privileged, and I could not agree to have them brought down.


Mr. SPEAKER:: Dropped.


NATIONAL CAPITAL
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That whereas the requirements of a national capital involve, from time to time, developments of a character beyond the municipal improvements ordinarily required in other cities;
And whereas the development of a national capital is at least in part a national responsibility;
And whereas the capital of Canada is designated by the British North America Act to be Ottawa;
And whereas the carrying out of planned improvements requires a clear expression of intention to proceed with necessary developments in a manner which will ensure continuity; Therefore this house is of opinion:
1.	That it is desirable that all developments of the capital should be in accordance 'with an approved plan which has regard to the position of the city of Ottawa as a national capital in the present, and to its probable needs as the capital of Canada in years to come.
2.	That a special account in the consolidated revenue fund, to be known as the national capital fund, should be created to which appropriation may be made annually by parliament over a period of years of the amounts required from time to time to meet the costs of such projects as may lie recommended by the federal district commission and approved by the governor in

Development of National Capital
council for the development of the national capital and the surrounding area, in accordance with the plan;
3.	That it is desirable that the work necessary to this end be under the supervision of the federal district commission, distinct from its ordinary operations;
4.	That the expenditure of moneys for these purposes should be conditional on the effective co-operation of the city of Ottawa and other municipalities within the national capital district.
He said: I know hon. members are anxious that the session should be concluded with as little delay as possible; therefore I promise I shall not take up much time with this resolution. I believe the resolution in the form in which it appears on the order paper will commend itself to hon. members without extended discussion. Most of the objectives set forth have been approved in past years, and the general conception I believe has met with acceptance not only in parliament but throughout the country.
As hon. members know, there are items in t'be estimates in relation to the work of the federal district commission. For that reason I shall not in my present remarks go into detail about specific projects. Questions on that particular phase of the matter may be asked when we reach those estimates.
The resolution, in a word, seeks to ensure the continuous development of Ottawa and surrounding areas in a manner which will help to meet its needs as the capital of Canada both at the present time and in years to come. I would link together, as setting forth the essentials of the resolution, certain clauses which appear in it. For this purpose I shall quote from the resolution, but in an order different from that in which these clauses appear.
The resolution states:
That it is desirable that all developments of the capital should be in accordance with an approved plan which has regard to the position of the city of Ottawa as a national capital in the present, and to its probable needs as the capital of Canada in years to come.
The requirements of a national capital involve from time to time developments of a character beyond the municipal improvements ordinarily required in other cities.
The carrying out of planned improvements requires a clear expression of intention to proceed with necessary developments in a manner which will ensure continuity.
A special account in the consolidated revenue fund, to be knowm as the national capital fund, should be created, to which appropriation may be made annually by parliament over a period of years of the amounts required from time to time to meet the costs of such projects as may be recommended by the federal district commission and approved by the governor in council
for the development of the national capital and the surrounding area, in accordance with the plan.
I believe those four paragraphs, which I have rearranged in this order, will give to hon. members the essentials of the resolution.
May I now for a moment enlarge upon the statements therein set forth. It is 6tated first that-
It is desirable that all developments of the capital should be in accordance with an approved plan which has regard to the position of the city of Ottawa as a national capital in the present, and to its probable needs as the capital of Canada in years to come.
What was known as the Ottawa improvement commission was appointed during the administration of Sir Wilfrid Laurier within one year of fifty" years ago in order, as a federal government responsibility, to assist in, making in this city such necessary improvements as at that time seemed advisable, having regard to the fact that Ottawa was the capital of Canada. Those improvements have continued over the years, and hon. members now know the effect they have had upon Ottawa as the capital city of our country.
I need not go into details as to what has been accomplished over those years; the vast improvements, so apparent on all sides, speak for themselves. I would ask hon. members, however, to ask themselves what would have been the position in this capital today if those improvements had not been made during the last fifty years. It is in this light that I now present to the house this resolution, one which I hope will lead to essential developments which the city of Ottawa could not be expected to undertake as a municipal obligation, if the capital is to meet the needs which will be expected of it in the course of another fifty years, to say nothing of the years which will follow thereafter.
Unless these essential developments are made at the present time they will be extremely costly to make within another few years, if indeed it might not become next to impossible to make them later on. It is to anticipate a situation of that kind that I am bringing forward this resolution today.
As hon. members are aware, for some years past members of the federal district commission and others who are members of the capital planning committee, including several experts, have been working on a plan for the development of the capital. A master plan is being prepared setting out on broad lines the developments which should be followed from
59:4

Development oj National Capital
year to year by the different authorities and organizations having to do with the development of the capital. Here may I 'point, out that the municipality of Ottawa has its obliga-gations; the provinces of Ontario and Quebec each have also to do with matters which pertain to Ottawa and Hull and which affect the development of the capital. .Adjoining municipalities have to be brought into consideration in connection with developments affecting their areas. Finally in association with these authorities there are developments which the government itself, which has a special responsibility for the development of the national capital, will wish to make.
These several bodies cannot be brought together in harmonious relationship unless *there is some broad and general plan to be followed. For that reason, for some years past the government, as I haive said, has had experts at work under the direction of the federal district commission, preparing a master plan; in that work it has had the benefit of the best advice obtainable.


Mr. FLEMING:: Will the Prime Minister *permit a question?


William Lyon Mackenzie King: Well, if my hon. friend wishes to ask it now-


Donald Methuen Fleming: WTould he elucidate the meaning of the expression "approved plan" in the first paragraph of the resolution? Does that refer to a plan which has been approved by the government, or one which has yet to be approved and which can be submitted to parliament for approval?


William Lyon Mackenzie King: May I ask that I be permitted to continue my general statement? If there are details which I have not covered, they might be brought up for discussion on the estimates relating to the commission. At that time I would be happy so far as possible to answer any questions which may be asked.
The question the hon. member has just asked respecting an approved plan is one which I was about immediately to anticipate. I do not think the words "approved plan" should be taken as meaning that any plan prepared at the moment is to be followed in all details over the next twenty, forty, fifty or a hundred years or that any plan should be approved as a whole by the government or by parliament; but rather that developments should be made in stages in accordance with general ideas which seem to meet with general acceptance and which are in the nature of guides to the future.

A tentative plan is in the making, but it is not completed. As prepared, it deals with general features of the development of the city, including, for example, the main thoroughfares which should be developed; what should be done with railway tracks which intersect different parts of the city; where certain public buildings may be best located, and the like. That plan has already reached the stage which I believe would enable anyone looking at it to see exactly the lines of contemplated future developments. As agreement is reached among the different agencies or governments affected, it would be possible to have developments arranged upon those lines. I do not think however that too much significance should be attached to the word "approved" before the word "plan," as related to the plan as a whole, or as 'to finality in its details. This is true particularly in view of the fact that no further stage in the development planned on a large scale can take place without parliament approving in the first instance the essential projects being proposed.
The conception of following a master plan is I think imperative if development is to take place in an orderly way, and in a manner which will admit of projects once begun being carried out with a degree of certainty from year to year, different stages, as I have said, being approved by parliament from year to year as the years go by.
I attach great importance to the following statement:
The requirements of a national capital involve, from time to time, developments of a character beyond the municipal improvements ordinarily required in other cities.
That is why the government is asking today that this House of Commons declare its readiness to support the progress toward completion of certain developments which, once approved by parliament, may in the very nature of things not be possible of completion all at once and which may require appropriations from time to time over a series of years. Already the city of Ottawa, the government of Ontario, the government of Quebec, some of the municipalities adjoining Ottawa, and the federal district commission, have been in communication with each other with respect to certain developments which they all feel to be more or less essential and which they would like to see commenced at once. These are developments that could not be expected from the municipality itself; they are developments that might not be made if Ottawa were not the capital of our country and there were not necessarily regard for the future development of the country as well as of the municipality.

Development oj National Capital
These various authorities wish to have some assurance that if a certain development is undertaken it will be proceeded with, that it will not be started this year by an appropriation by parliament of a certain amount and then dropped in the year following. They are asking that this parliament indicate, first, its belief in following a plan, and, second, its intention to see that essential developments under that plan are presented to parliament from time to time and developed along lines which may continue to receive the approval of parliament.
Perhaps 1 could not do better at the moment than to anticipate what might be asked with respect to the immediate developments the federal district commission have in mind and that the government is recommending in connection with an item that appears in the supplementary estimates at this time. Before giving that in detail it might help to disclose the importance of the proposed developments were I to say a word about the appearance of this capital as I recall it before some of the major developments in the capital, because of its being the capital, were made at the instance of the government.
We hear a great deal of complaint about traffic congestion and confusion in the centre of the city, between the houses of parliament, the Chateau Laurier and the station, and particularly around the national war memorial. I remember well what the city was like before the changes were made that have since produced such a splendid effect.
When a Liberal administration came into office in the early twenties the spape now occupied by the national war memorial and the open spaces immediately adjoining were occupied by a block of buildings, including a hotel; by a second hotel, a post office, a theatre, a city hall and a church-all in that limited space. In the space which the national war memorial now occupies there was a mass of buildings between Elgin street and a point close to the approaches to the Chateau Laurier, and again between Wellington and Sparks streets. There was one side of a hotel on the corner opposite the Langevin block; there were other shops and stores that ran on down Elgin street from Wellington to Sparks street; there was a series of shops and stores along Sparks street; on Wellington street, there were offices and shops and another side of the hotel. Behind that block was the Ottawa post office, which occupied a considerable space. Today it is located on the corner of Elgin and Sparks street.
On the far side of Sparks street opposite this commercial block was the largest hotel in the city, the Russell hotel, with shops and stores adjoining. Behind and adjoining the Russell hotel was a large theatre. Beyond the Russell hotel and the theatre was the city hall and Knox church. Along Elgin street there was a row of dwellings which, had they not been removed, would now be standing on the east side, making that street half the width it is at the present time.
All the improvements I have mentioned have been made within the last fifteen or twenty years, and in accordance with a plan agreed to by the government and the municipality, each sharing in the cost. They have changed entirely the appearance of the city and have given some breathing space in this central part of the capital.
Congestion due to the growth of the city and from other causes is again taking place in this area. Traffic of larger proportions and of a different kind is now being found on the streets in the very heart of the city. Twenty years ago we had not the enormous trucks and vans which are now making use of any thoroughfare they find most convenient. They are making their presence all too greatly felt in this area, an area in which they would scarcely have been able to operate had it not undergone so much in the way of improvement. The commission, the city authorities and others have come to 'the conclusion that a major development is necessary if this congestion is to be relieved. The traffic of heavier vehicles must be directed away from in front of the parliament, buildings and the centre of the city to some other portion.
It is proposed that a bridge should be thrown across the canal south of the station to run from Elgin street to Waller street. It would cross at a point half way between Sparks street, where the monument is situated, and the Laurier avenue bridge. Last year the house approved appropriations which enabled soundings and other investigations to be made respecting the feasibility of constructing a bridge there. The reports are favourable, and the commission is asking, in the appropriation which parliament will be requested to vote later, for money to enable it to proceed with the immediate construction of that bridge. It may take considerable time to complete, but when completed it will have the effect of removing heavy truck and other traffic from this part of the city to another more suitable part.

Development of National Capital
Another major improvement that is desired is in relation to the location of railroad tracks and freight terminals. I ask hon. members to contemplate what the situation will be like twenty or fifty years hence if the freight terminals which are now located where they are in this capital are allowed to remain without any anticipation of the growth of traffic, on the one hand, and the growth of the city and its needs, to say nothing of the country, on the other. Within a quarter mile of these houses of parliament one can see, from the very windows of this building, freight terminals in the immediate vicinity of the Union station. Going toward government house in the near vicinity of the research council building and Earnscliffe one can see on the other side of the street, facing the Ottawa river, freight terminals which are occupying space which should be reserved for public buildings of first importance to the country.
The commission and the city both feel that some arrangements should be made with the railroad companies to have these freight terminals placed in another part of the city. That will not be accomplished in a day, and it will not be accomplished by any one authority. It can only be brought about by the co-operation of the different interests concerned, but a beginning is necessary if the change is ever to be made. What the government has already done to anticipate that end has been to ask parliament to approve first the expenditure of a certain amount of money for the acquisition of lands in those parts of the city which appear likely, in accordance with the general plan, to provide suitable locations, and to appropriate money for the approaches in order that the terminals may be placed in parts that would be appropriate. In other words, what the commission has had in mind is providing zoning areas, which will have regard to what should be reserved for governmental purposes, for commercial purposes, and for residential purposes, and to enter on this task at once while there is opportunity, to have these needs planned and that without too much in the way of expense.
The commission have asked that they should have the right to take up with the railway companies some of the major changes to which I have referred. I have had conversations with the president and chairman of the Canadian Pacific Railway and with the president of the Canadian National Railways, and these gentlemen have expressed their entire sympathy with the development of

the capital of Canada in accordance with a general plan. They would wish however to have considered very carefully any change that would have to be made and the time at which it is to be made. They recognize that some changes will be necessary in the course of time, and they are prepared to co-operate with the commission in seeking to work out a plan which will permit of that development in the most satisfactory way.
I should like to mention one or two other contemplated developments, but that would take up time that cannot be spared at the moment. What I have sought to do today is to make clear to the house the main purpose of the resolution: first, to have it known as the desire of the house that in necessary developments in the capital we should follow a plan; and second, to have the assurance from parliament that when these developments are begun the authorities may have reason to feel that they will be continued in accordance with provision made by parliament from year to year in such amounts as it may deem appropriate. Here let me again make clear that there is no likelihood of a major development taking place which will not be fully under the control of parliament. In the first instance recommendations will be made by the federal district commission in accordance with the advice of their experts and after consultation with the other interests affected. The projects recommended will then have to be approved, first, by order in council of the government so that great care may be taken at that stage, and in the second place by the appropriation of the necessary moneys for these projects by parliament. Lastly, appropriations will be made from year to year, so that parliament may have very full control where federal expenditures are involved.
Another way to have proceeded might have been to ask parliament to vote a large amount of money as was done in the case of the development of Washington, the development of Paris, and other cities, so that the commission, with that guarantee, could have looked forward to a series of developments being effected without interruption over the years. The government felt, however, it rvould be preferable, while having an assurance from parliament of its intention to have the developments proceeded with continuously, to reserve to parliament the control which it would have from year to year of the necessary outlays for all these developments.
I should like to emphasize to hon. members how the whole position of the capital has altered within very recent years. I remember when I first came into office there was not a foreign mission in this country, nor did we

Development oj National Capital
have a single mission representing Canada in a foreign country. We had no representatives in Canada from any of the other dominions, nor from the United Kingdom. We had one representative of our own in the person of the high commissioner in London, and we had a representative of Canada in Paris, but apart from those two representatives of the government there were no representatives here from the governments of the United Kingdom or the other dominions and none from the heads of foreign states. There were no legations and no embassies. There are now something like twenty-five different missions established right here in this capital. The representatives of various countries require accommodation in the city, and more will be coming.
Further may I point out how the capital has increasingly become the centre for important conventions, of conferences, dominion conferences, commonwealth conferences, international conferences, and the like. We have had one visit to our capital from Their Majesties the King and Queen. I think we may look forward to the day when the king and queen will reside for part of the year in the capital of Canada. I am saying nothing at the moment about such matters as tourist traffic, and the importance to Canada of what has been done by its capital to attract visitors to our country. As all hon. members know, the capital of a country is a centre of attraction, and we must look forward to the development of Ottawa in the light of that larger vision. Moreover, the public buildings and public thoroughfares of a capital should lend inspiration to its position as a centre of the culture of the nation, its arts, letters, science and government. Countries are more or less known by their capitals.
When one speaks of other countries, of France, for instance, one thinks of Paris and how beautifully it is laid out; when we speak of Italy, we think of Rome; when we speak of the United Kingdom, we think of London; when we speak of the United States, we think of Washington; indeed, when we think of Greece and Italy, even as they were in ancient times, we are still able to see how Athens and Rome were planned centuries ago.
I believe, as I think all hon. members of this house believe, that Canada may have a future greater than that of almost any of the countries I have mentioned. The day will come, I believe, when this dominion will hold first place among the nations of the British commonwealth. The United Kingdom will always be its spiritual centre, if you wish to use that expression, but even today this Dominion of Canada is the most fortunate country in the world. It has possibilities of development which no other country begins to possess. The proposal which the government is bringing
forward today in the form of a resolution has been framed with a view to helping to meet the needs of Canada's capital in the present. It also, and even more, seeks to anticipate the needs of Canada's capital in the future as we believe that future will shape our country. We desire a capital adequate at all times to the country's needs. We desire, above all else, a capital worthy of the high place that Canada holds in the world today and of the Canada that is yet to be.


Mr. G. RUSSELL BOUCHER (Carleton):: Mr. Speaker, I am sure that the members of this house agree with the Prime Minister (Mr. Mackenzie King) in what he has said as to the development of Ottawa as the national capital.
I was pleased to hear him emphasize in his closing words that Ottawa, as the capital of Canada, is becoming more and more a mecca for important conventions and conferences and a host of tourists. His suggestion that at some future time royalty itself may spend considerable time in Ottawa will have a bearing on the way in which the Canadian people and members of the House of Commons look on this resolution.
I had hoped that time would have permitted the Prime Minister (Mr. Mackenzie King) to give more details on the development of the capital so far. We know that for approximately fifty years the House of Commons has considered the development of a national capital area. Many attempts, plans and projects have been put before the people of the dominion and of the city in regard to the development of the national capital. As the representative of an area within the city of Ottawa, I think it is proper that I should draw the attention of the house to the fact that Ottawa is faced with a problem in her desire to co-operate with the dominion in forming a national capital worthy of the great nation that we believe Canada will be. She has also had grave difficulties in the development of her own internal management because of her desire to work on a general master plan and co-operate in every way she can in the development of a capital area.
I emphasize the Prime Minister's statement that everything cannot be shown on a master plan; but it is important that the people of this area, and the people of Canada as a whole, should have some assurance that many projects will be proceeded with which are necessary to the economy of Ottawa. Because of Ottawa's beautiful location she has an industrial potentiality which would be an important factor if Ottawa were developed as an industrial city rather than a capital area. Because Ottawa has given up her opportunities of developing as an industrial city in favour of

Development of National Capital
a federal area, hon. members should appreciate the difficulties which confront the people of Ottawa in planning their future development. Because of that I should like to see this resolution go much further than it does.
The Prime Minister mentioned the development around confederation square which has taken place within the last twenty years. I need not remind hon. members or anybody else of the beauty of Elgin street and confederation square. That is obvious to anybody who visits Ottawa. But also obvious to those who appreciate the beauty of it is the adverse effect it has on traffic. I emphasize the necessity of keeping that point in mind. I was pleased to hear the Prime Minister say that the immediate project he had in mind was the construction of a bridge from Elgin street to Waller street, which will relieve traffic congestion in the bottleneck around confederation square. Hon. members will find that everybody in Ottawa, and everybody having anything to do with Ottawa, realizes that that is one of the most important projects that could be undertaken at the earliest opportunity. To undertake that requires not only federal government assistance in the way of the use of federal property in the development of the national capital, but also the co-operation of the railways, transportation facilities and various services in the city itself. Coupled with that is the cross-town track situation which I am sure every hon. member knows has had a detrimental effect on the development of Ottawa. Therefore these two projects need immediate attention.
A number of reports have been made on future projects for the development of the national capital. All have had a bearing on the development of Ottawa. The Prime Minister mentioned the expropriation of land which is taking place under the aegis of the federal district commission. These reports visualize removing our terminals and establishing manufacturing and commercial areas or industrial areas. The development of Ottawa from the point of view of expansion is in a critical stage because the city has not expanded her boundaries. Municipalities adjacent to the city have become inundated with new developments. That situation also aas some bearing on how Ottawa will develop jn the future, whether it will be through the oorough system, government services, or through some other system.
I think the city will willingly accept a certain degree of leadership from the dominion government in the development of the capital area. The city of Ottawa would appreciate a lead from hon. members and parliament as

a whole in the development of the capital area before the city undertakes the immediately urgent problems confronting it within its own economy. The city of Ottawa cannot proceed with the necessary and immediate developments without giving every regard possible to the capital area development and without co-operating with the federal district commission.
I had hoped that in introducing this resolution the Prime Minister would take the House of Commons more into his confidence and give us more details. I was particularly anxious to see him ask for the co-operation of hon. members outside of Ottawa and of the provinces in developing the capital area.
On a previous occasion I recommended that within the federal area certain areas should be set aside for provincial show rooms or show places. I believe that the large acreage which is being set aside or designated as a capital area could very well be used to the advantage of this nation and to the interest of the provinces. Within that area certain areas should be set aside to be developed by the provinces and administered to their own advantage. Each province could use these sites to show its own industries and its own beauty. On that occasion I suggested that the federal district commission driveway should be extended from the city in a northwesterly direction to Fitzroy Harbour, in Ontario, and thence on the Quebec side of the river back to Ottawa. Along this highway certain acreages of land could be set aside for each of the provinces to develop as provincial showrooms, thus making the whole capital area scheme a truly national scheme in which every province would feel it had a little bit. of home to develop in the federal area.
I do hope that the Prime Minister and the federal district commission will develop this idea, because one of the greatest detriments to the development of the capital area is the feeling that it is a development purely for the city of Ottawa. That feeling is not in accordance with the facts. While Ottawa will benefit because of her strategic location and because the capital of the country is located within her boundaries, she has something to offer to the federal area which no other place in Canada has. But she has also to develop her own economy commensurate with the wishes of the nation at large. If you go to Montreal, Toronto or any other large Canadian city you will see that the dominion government and the railways have established government buildings, postal terminals, railway centres, union terminals and so on. When you see that you realize the amount of money that has been spent in each of these cities

Development oj National Capital
purely for railway and transportation facilities, for the city itself. Ottawa has had that for some years. But this city, from the standpoint of railways, has much more, to consider, because of the presence here of the parliament buildings, than any other city in Canada. I feel therefore that in supporting this resolution hon. members should take the view that in establishing a capital area in this city and its environs they are establishing a little bit of their own home and advertising their own nation in a special way.
I do not quite know what the resolution means when it predicates this scheme upon the co-operation of the municipalities with the dominion. I do not understand why the resolution fails to make any reference to co-operation on the part of the two provinces concerned. I do not see in the resolution anything pointing to the expectation of co-operation from the provinces. I would point out that the federal area extends into the province of Quebec. Each of the provinces of Ontario and Quebec has of course its own legislature, and the respective municipalities are jealous of their own authority. The municipalities themselves feel that they should have some say, some interest, in the development of the capital area to the extent that such development affects their communities. I hope therefore that the omission from the resolution of any reference to co-operation on the part of the provinces is purely an oversight and is not to be taken as implying that the dominion government will proceed without the utmost co-operation from these provinces.
I shall not go into the matter at any great length now. I think it would be better to wait until the estimates are before us. I thought it might be well, however, to mention these few points at this stage in the hope that the Prime Minister, when the estimates are under consideration, will be prepared to give to the house such information as is necessary to a proper understanding of the proposal we have before us.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I should like to say just a few words on this subject, both as one who is now living in Ottawa and as one who is interested in Canada's capital apart from the fact of his residence here.
Ottawa is probably one of the most beautiful sites that any capital in the world enjoys. With the background of the river and the Gatineau hills, with the beautiful countryside surrounding the city, it is indeed a fine setting for a capital, and I have often regretted that the plans which have now been formulated and are now before us for discussionthe plans formulated during the prime ministership of my right hon. friend-were not thought of many years ago. The city itself is not well laid out. There is congestion in the narrow streets, and if streetcars are not replaced by a more modern transportation system such as buses or trolley buses, the congestion will continue and the city will be cluttered up with the present antiquated conveyances.
I hope the municipality will realize that it too has an obligation in connection with the beautification of this most attractive city. I may add, however, that before we spend very large sums of money on the beautification of the capital, seeing that it has been neglected for so many years and was not conceived in the manner in which I think it should have been conceived, we should bear in mind the importance of putting first things first.
If I may use the slang expression, we do not want a country or a capital with a Queen Anne front and a Mary Anne back. We should try to avoid any suggestion of that sort in connection with our capital or with the country as a whole. When we are talking about the beautification of Ottawa we should remember that there are certain projects, apart from the beautification of the capital, that ought to be kept clearly in our minds.
I am thinking of a trans-Canada highway that would be a credit to this country and to our people, a highway that would attract visitors to our beautiful countryside. Our roads across Canada are to a large extent disgraceful and impassable, and no province can undertake the building of the kind of trans-Canada highway which is needed. Someone says, come to Saskatchewan and travel on the trans-Canada highway. Yes. I agree that a province which has thirty-eight per cent of the roads in the dominion cannot possibly undertake the building of the kind of trans-Canada highway which is necessary in order to give proper service. Thirty-eight, per cent of the roads in Canada are located in Saskatchewan-and I am using this government's statistics, not those of the provincial government.
There is at the present time in western Canada the possibility of a serious crop failure in many parts of the prairies owing to the drought. Again, we have to consider the economy of the country, upon which expenditures for the beautification of the capital must rest.


Mr. ISNOR:: May I ask the hon. member a question for information?


Major James William Coldwell: No. I should prefer to finish my remarks.

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Gordon Benjamin Isnor: I was going to ask the hon. member-


Mr. COLD  WELL@: May I finish my
remarks?


Gordon Benjamin Isnor: -a question in reference to his statement that thirty-eight per cent of the trans-Canada highway-


Mr. COLD  WELL@: I did not say that. If the hon. gentleman would listen to me he would hear what I am saying. I said thirty-eight per cent of the roads in Canada, not thirty-eight per cent of the trans-Canada highway.


Mr. GARDINER:: It was always that way.


Mr. COLD  WELL@: The Minister of Agriculture is interrupting me. When he left the highways department there were not fifty miles of all-weather roads in that province.


James Garfield Gardiner: In view of the fact that I have been mentioned, I will tell my hon. friend-


Mr. COLD  WELL@: Mr. Speaker-


James Garfield Gardiner: -that I have just completed-


Mr. COLD  WELL@: Mr. Speaker, the hon. gentleman can make his own speech when I am through.


James Garfield Gardiner: I rise to a question of privilege. The hon. gentleman has referred to the time that I left the department of highways in Saskatchewan, which is now twenty-one years ago, and he says that there were not more than fifty miles of hard-surfaced roads in Saskatchewan at that time.


Mr. COLD  WELL@: I did not say that. I went much further than that. I said there were not fifty miles of all-weather road- that is, gravel as well as hard surface.


James Garfield Gardiner: Now there are a little over two hundred miles of hard-surfaced road-


Major James William Coldwell: Just a minute-


James Garfield Gardiner: -and it is a long
time ago that I left.


Major James William Coldwell: The hon. gentleman
quotes me and then proceeds to talk about hard-surfaced roads. I spoke of all-weather roads. He knows there are thousands of miles of gravel all-weather roads in that province now.


James Garfield Gardiner: That is what I was
going to deal with. I have just completed driving over three-quarters of the gravel roads in Saskatchewan. I scarcely drove on a single

mile that was not built when I left the Saskatchewan government, and the greater part of it was gravelled.


Major James William Coldwell: I am not going to argue about the roads in Saskatchewan except to say that when the hon. gentleman speaks of roads that were built, that is a very different matter from all-weather roads. I have travelled over the roads in Saskatchewan in the last several weeks.


James Horace King: I would ask the hon.
member to confine his remarks to the resolution.


Major James William Coldwell: We have to consider other matters besides the expenditure of millions of dollars in the city of Ottawa. We have to consider the matter of proper roads across this country; and then we have the great problem of housing, about which we should be showing much more concern than we are at the present time. Even in the city of Ottawa, if I may say so, there are some pretty bad spots with respect to housing. There are areas which 'might be described almost as slum areas-


George Russell Boucher: Order.


Major James William Coldwell: -using the term in
the modern sense. My hon. friend says "order". If we are to have a beautiful capital, we must have a healthy capital, and the condition of overcrowding that exists in many parts of this city is a disgrace to the country and to the city of Ottawa.


George Russell Boucher: What has that to do
with this resolution?


Major James William Coldwell: It has everything to
do with it. We want to put first things first.


An hon. MEMBER:: More propaganda.


Major James William Coldwell: It may be propaganda from my hon. friend's point of view, to help him get elected in the city of Ottawa, for him to get up here and make a fine speech about beautifying this city. I am not indulging in that kind of propaganda.


George Russell Boucher: You are desecrating
Ottawa by talking about poor housing. You are staying in the gutter.


Major James William Coldwell: That is exactly where my hon. friend wants many of the people of Ottawa to stay.
I am trying to point out that while I believe we should have a beautiful capital,
I am not in favour of spending millions of dollars on any city in Canada and at the same time leaving housing and other condi-
59S1

Development of National Capital
tions in this country as they are today. I believe the city of Ottawa has some obligation itself in this regard. lit is a disgrace to the citizens and the city of Ottawa that there is no cultural centre in this city. As far as I know this is the only capital in the world in which there is no appropriate national library, no appropriate national theatre. Why, there is not a single theatre in this city in which first-class drama may be seen and heard. There is no building in this city in which a first-class opera company can put on a performance, or a first-class symphony orchestra may be heard; and it is not the responsibility of the federal government, It is the responsibility of the people who live in Ottawa. For a city to be without these amenities and these cultural facilities after eighty years or more as the capital of this country I say is a disgrace to the people who live here.


George Russell Boucher: Do you think they should build a national theatre or a national cultural centre?


Major James William Coldwell: No, I do not say they should build a national theatre.


George Russell Boucher: That is what the hon. member said.


Major James William Coldwell: I said a theatre. I could name cities with populations no larger than that of Ottawa, in countries with populations no larger than that of Canada, where they have a national theatre, a provincial theatre, and a municipal theatre. We have nothing of the kind in this capital, and until we have these things I do not believe we shall have an appropriate capital.


Mr. FULTON:: I thought the hon. member said that houses should be built first.


Major James William Coldwell: So I did.


Edmund Davie Fulton: Then how can they build a theatre and library?


Major James William Coldwell: As my hon. friend knows, this has been the capital of the country for eighty years. Under the free-enterprise system many of the people who live here do not have houses; 'they do not have a theatre or these other things I have mentioned. It is about time these matters were considered as part of the general plan for the beautification of Ottawa and the making of this city a worthy capital of a country which today is in the forefront of the nations of the world.
I place these matters before the house because I think they are things which cannot be laughed off, because they are things which
should be said. I know it is unpopular in Ottawa to say them; it may be unpopular to say them in this house. But let us fact the facts; because they are facts. If we all face them perhaps we can arouse public opinion, and opinion among the members of this house, so that we shall not only consider the development of this very beautiful site but remember also that man does not live by bread alone. We may arouse the citizens of Ottawa themselves so that they will try to do something to remove the blot, as I think it is, upon the capital city of this country.


Mr. J. T. RICHARD (Ottawa East):: Mr. Speaker, I do not believe anyone could speak on this resolution without first paying tribute to the Prime Minister (Mr. Mackenzie King) for having given so much of his time, energy and ability to the formulation of plans, with the assistance of experts, which will make Ottawa and the area surrounding it a national capital worthy of this country.
I am sure all hon. members will agree that any request for money for the implementation of the plans for a national capital area should be approved. But we should understand also that any criticism offered in this regard is brought forward in order to assist, and to express the honest point of view of members from different parts of the country. I believe we all agree on the general plan for the improvement of the city of Ottawa. I do regret, however, as I have said on other occasions, that members of this house-including mysel f, and I was born here and have lived in Ottawa all my life-do not know enough about that general plan or the details concerning the improvement of the capital area. I suggest that at the next session we set up a committee of this house, or perhaps a joint committee of this house and the senate, which could be apprised of the specific details the federal district commission has in mind for the improvement of this area. If hon. members knew a little more about these matters I believe it would be much easier to get approval of the necessary expenditures, and in addition those who are formulating the plans would have the benefit of the viewpoint of those coming from other parts of the country, so that this could be made a truly national plan.
Speaking as a citizen of Ottawa, and representing one of its constituencies, while criticism is sometimes levelled at the city itself I must remind hon. members that at times it is not very pleasant for the people of this city to find that they do not know exactly where they are going or what they are to do. In this connection I would mention the matter of expropriation. Perhaps very few hon. members

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realize that the federal district commission suddenly files a plan in the registry office under which a certain area, which has been a residential area, at once becomes the property of the crown. A good deal of property has been expropriated in this way, and no doubt more will be expropriated; and the people living in these houses want to know where they are to go. All along the Rideau and Ottawa rivers new houses have been expropriated. The people will not receive their money for perhaps five years. In the meantime they have been told that they may remain for perhaps two years, but that then they must find somewhere else to live. They have no place to go. Under the general plan it is true that certain areas have been set aside as residential areas, but they do not have the necessary services; and the city of Ottawa cannot even furnish services for the municipalities which may be annexed in the near future. Much less are we able to provide the water and other necessary services which will be required if all these people are to be moved within the next few years. That is why I should like some assurance that the-e people will not be required to leave their present homes until the federal district commission has provided other areas within the city where houses can be built and where they will have the transportation, water, and other essential services they have enjoyed in the past.
I would remind lion, members that the lot of the Ottawa people is not as easy as they imagine. When people have resided for many years in an area which is close to their work and then they are told that within a few years -we do not know when-they must either build a house or rent one from someone else who will build one, the situation becomes very difficult for them. Perhaps that might answer what is said at times, and I have no doubt honestly, by the leader of the CiC.F., that the municipality might be responsible for certain conditions in housing. We do not know where we are going.
I am not blaming the master plan itself; but I do think that if the federal district commission is going to expropriate property all around Ottawa, I am not blaming them for that, because someone might make money improperly if he knew the exact details-it should tell the owners of that property that 'they will not be moved unless and until the services of transportation, sewage, water and the like have been provided in their area.
There is another matter in connection with expropriation which I should like to mention.
I have had considerable difficulty in explaining to people how hard it is to settle the amounts

they are to receive for their houses. I must confess I am not at all pleased with the methods being followed by the federal district commission in settling the amounts to be paid to residential owners around this city. I must say it is done in an odd fashion. Those who are hired by the federal district commission to set the prices simply bring these people to their offices and say, "Well, you will get so much; if you do not like it you can go to the courts-and it will take five years." That is not the way to deal with these matters. Surely when people are taken from their homes in order to enlarge a capital city they should be given every benefit and the prices should be such as to compensate them for the building of new houses, for the trouble of being displaced.
I wish to bring this matter to the attention of the Prime Minister. I believe if we are to displace people from the capital city, they should be treated as fairly and as well as possible. I may have some further remarks to make when we are considering the estimates.
I should like to add that in addition to the physical development of the capital city we should think of its cultural and spiritual values. I should like the capital city of Canada to be an example of national unity and of Canadian citizenship. Surely this is the place where one should not find those narrow ideas, those narrow differences between factions. Because people who will come here in the future, after so much money has been spent on this beautiful city, and after so much has been spent in the development of the capital area, whether they come from elsewhere in Canada or from other parts of the world, will expect to find at least within this area a true picture of healthy Canadian citizenship.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, I hope in the few remarks I shall make I shall be able to remain strictly nonpartisan, and that I shall speak on a plane befitting the subject matter of the resolution -the building of a capital for a great nation of the future.
In the first place I believe an unfair reflection has been cast upon the city of Ottawa. True, there are defects in Ottawa as a city. People have not got things quite the way they would like to have them; on that we can agree. None of us has. But, all things being considered, I suggest the people of Ottawa have done admirably' well. When one recalls that Ottawa began as Bytown only eighty years ago, and when by' looking at some of the relics of those day's he acquires some idea of

Development of National Capital
wlbat Bytown must have been like, he must conclude that the eity of Ottawa is worthy of the highest praise.
I should like to congratulate the people of this city upon their superb good senise in planting and retaining beautiful trees throughout the city, so that one who walks through the city may wailk through one magnificent park, as it were. The city has not yielded to some of the silly fade which have nowadays become the vogue in some parts, one of which has been to out down trees. On the contrary the people of this city have kept its trees, wherever they could keep them-trees which anyone must admire, even if in some instances the houses are second or third rate. In making these observations I have been no more than fair to the city of Ottawa.
The Prime Minister (Mr. Mackenzie King) is to be congratulated upon his part- in Ottawa's development, and I Should like also to congratulate him upon the speech he made today. It was on a high plane, and, I thought, in all respects admirable. I enjoyed listening to it; I thought it was as a speech of that kind should have been. Indeed I felt several times that if the speech is read by our descendants a hundred, years from today they will view with pleasure and satisfaction his treatment of the matter in this year 1948.
Canada is not a populous country. When we undertake to appraise what has been achieved in this capital city we must remember that Canada has plenty of drawbacks. She has had them, nationally, ever since she started to keep house. She has not really teamed yet how to manage her own house. There is still a tremendous amount of disagreement as to how it Should be done. No wonder she does not yet know exactly how to do it. But we are learning, and we shall learn, if it please the Lord, until some of these days we shall run this glorious country the way we want to see it run, and believe it should be run.
Perhaps we can be expected to do a little more, and do it faster, than we have done it up to .the present time. Let us not forget, however, that since the turn of the century we have been through two terrible wars. During fifty years of the time this has been the capital city we have experienced wars, depressions, crop failures, and the like. In estimating what has been achieved, these facts must not be forgotten.
It. is well to plan our national capital with an eye to the year 2048, as the Prime Minister suggested. It is well to remember, as he stated, that, Canada is to continue free and independent as a member of the British empire. There are some who are looking forward eagerly and almost with watering mouths to a
time when we shall be gobbled up by the United States. The Prime Minister expressed no such anxiety, no such pessimism.
This nation shall continue great and free. We can be proud and thankful to live in Canada. Canada will become populous, powerful, self-sufficient, wealthy, generous, respected. beloved by all nations, and a great and good neighbour. All these characteristics she has shown during the last fifty years. God blessed us with the natural resources to enable us to do these things, and has placed us in a combination of nations, the British commonwealth and empire, which if we know how to use our opportunities will enable us to accomplish great things, using the resources that God gave us as we desire to use them.
I think all of this was hinted, and appropriately so, in the speech of the Prime Minister. Although he did not indicate it specifically, I think I glimpsed the vision that the British commonwealth is not something that is finished. When he spoke of the little land of England as being the spiritual mother of those people called British, for hundreds, if not thousands of years-he did not mention the years, but I do-I think he was simply expressing justifiable faith in the future of those people, in the future of the combination of people known as the British commonwealth, which has continued as a force for general good and which merits therefore the blessings of Almighty God to the extent that it shall prevail over its enemies and become the blessing to all. men in future centuries that it has been during the last two centuries.
All this should be borne in mind when we plan our capital city, the capital which perhaps is to be the national centre of the foremost member of that glorious galaxy of nations, the British empire.
All that is necessaiy is intelligence and good will in co-operating with men of good will in other parts of the empire. All we need, coupled with the resources, rich and varied, of this and other British countries, is the courage to stand up for the things we believe in, and to insist that other peoples shall not "shoulder us around". Then we shall achieve superb and magnificent realities.
It is well that we bear all these things in mind when we plan for the city of Ottawa. I do not advocate too rapid expenditure. It is wise to look far ahead and to spend only as we feel we can afford to spend. We should spend wisely, building soundly and well, so that people looking back on our works two hundred years from now may be glad that we at this particular time in history were here as members of parliament in Ottawa.

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Mr. R. R. KNIGHT (Saskatoon City):: Mr. Speaker, I have to follow the eloquence of the hon. member for Lethbridge (Mr. Black-more), and I am quite diffident about mentioning the subject that I want to bring up at this time, because it throws a discordant touch of colour into the fine picture which has been painted for us by the Prime Minister (Mr. Mackenzie King).
We notice that in the beautification of cities an effort is generally made to let nature have some hand in the business. We attempt to decentralize our cities and the works of man. We first crowd into places and they are developed on the basis of real estate sold at so much per square foot. Later on we sometimes repent our labours, or perhaps our sins, and proceed to change the whole business and let nature come in with some of that healing which she is ever ready to operate to overcome the mistakes of man.
The house may be wondering what I am leading up to. I am referring to certain things that have been done to make this fine city ugly in appearance. Perhaps I shall shock members of this house, particularly those representing Ottawa, when I say that when I close my eyes and think of this city I can see only the great signs that appear here and there in the area contiguous to the city, particularly among the fields and woods where they are so incongruous.
Then when I go out Bank street, I see many of these little juke-box joints. It seems to me that in these days of building material shortages they do not need building materials to put up these places, because they are literally covered with advertisements for various kinds of soft drinks. If they' would advertise with quiet colours, or try to follow some natural scheme, perhaps I would not find such great fault; but for some reason commercialism believes in sensationalism, in the use of glaring and horrible colours. I never could understand why a farmer living among the beauties of nature with a fine orchard at his back door and stream at the front would allow someone to cover his barn with signs advertising chewing tobacco or laxatives. Either article may be estimable and necessary for the adult and baby population of the country, but personally I cannot understand why advertising of it in this way is encouraged.
May I say a word to these gentlemen who so advertise their wares? I drive a car but I avoid buying gasoline which is advertised by this particular method. One of the several reasons why I purchase nothing from a certain great commercial firm in Toronto, not unconnected with the business of mail order, is

that they persist in making the country ugly, particularly the vicinity of Toronto, with great signs advertising their wares.
Perhaps we can do nothing about this thing in the city, but I think any commission or other body having the responsibility for the general beautification of Ottawa should start a campaign to get rid of these things in its vicinity. Having got rid of them they should proceed to beautify according to their plan. The use of glaring and screaming colours by crude and vulgar commercialism should be done away with.
Tourists come here and they judge us largely by what they see. That is fair enough. There is every justification for so doing. But personally I do not care to be judged by the type of thing that one sees in our valleys and along our wooded areas. Incidentally many people from outside our country come here to get away from that sort of thing-the glaring signs in their own cities and juke-box joints which unfortunately are also becoming a part of our national life. My plea would be for a return to plain and decent things, the things of nature which can be used to beautify our cities.


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, the resolution before the house attempts to set out the attitude that this and later parliaments should take with respect to future support of the national capital. This is a resolution which I think should be approached in a non-partisan way. I should hate to think that it would ever be made a partisan issue, because I think every member of this house and every political party wants to do what it is proper the Canadian nation should do for its capital-that much, neither more nor less.
This resolution having to do with the development of the capital of Canada, and having been put in this form in our records, I think we should examine in detail what its passage means and how it will be interpreted later on by the Canadian people and by the city of Ottawa.
I want to commend the Prime Minister (Mr. Mackenzie King) for his interest in this project; but when I say that I want also to say that I would not like to think that any man in Canada has a monopoly of interest in the development of this capital. I think every member desires parliament to do what is appropriate for the development of Ottawa as the national capital.
The resolution consists of a preamble of four clauses, and four clauses in the main

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body of the resolution. The first clause of the preamble recites:
That whereas the requirements of a national capital involve, from time to time, developments of a character beyond the municipal improvements ordinarily required in other cities . . .
I think that proposition is obviously one which parliament can accept and approve.
The second clause of the preamble reads:
And whereas the development of a national capital is at least in part a national responsibility . . .
That, too, I think is obvious to every member of the house and to every Canadian.
The third clause reads:
And whereas the capital of Canada is designated by the British North America Act to be Ottawa . . .
Even the most partisan among us can find no objection to that simple statement of fact.
The last clause of the preamble reads:
And whereas the carrying out of planned improvements requires a clear expression of intention to proceed with necessary developments in a manner which will ensure continuity . . .
That clause I think requires a little more critical examination, so that we may understand what it means and so that the Canadian people will understand what we are doing if and when we pass this resolution. It calls for a clear expression of intention to proceed with necessary developments in a manner which will ensure continuity. I suggest that the only intention which this house can express is the intention of the present house. We may express the hope that those who may follow us in this parliament five, ten, fifteen, twenty or a hundred years from now will have the same view; and I am optimistic enough to believe they will have. But in any event nothing we can say in this house today can commit parliament five or ten or twenty or fifty years from now to doing something it does not want to do.
We can only have faith that those who will succeed us in this parliament will approach this problem just as sensibly as we do. Speaking for myself and those associated with me, we are willing now to express our intention to do what is proper in connection with the development of the national capital. From time to time there will be differences of opinion as to just what should be done, and how much should be done, and how much should be spent. But nothing we may say here now will prevent questions of that kind from arising in the future.
The preamble ends with these words:
-to proceed with necessary developments in a manner which will ensure continuity.
We may hope that the passage of this resolution will ensure some continuity, and I fully expect it will, but there may be differences of opinion as to just what the words "will ensure continuity" mean. If we start out on a reasonable plan now, I am sure that it will be accepted in principle by any parliament which may follow us; but with respect to details, or with respect to the generosity of future parliaments as regards certain aspects of any plan we might approve now, we cannot speak for them.
I come now to the main body of the resolution, the first clause of which reads:
That it is desirable that all developments of the capital should be in accordance with an approved plan . . .
Some question was raised about that, and the Prime Minister indicated that he would give further information when his estimates are under consideration. I suggest, Mr. Speaker, that before this resolution is passed we ought to give a little more consideration to just what those words mean. I ask myself: Where is this approved plan, and what is it? We here now may say that we think such-and-such a plan is a good one, and that we approve the appropriation of a certain amount of money for the purpose of carrying it out; but I suggest that we cannot tie ourselves now to some "approved plan", the details of which we do not know. We can approve the principle, and say that the general attitude of parliament ought to be such-and-such towards this project, but I do not think we should be asked to tie ourselves now to some approved plan the details of which we have not seen, and which in any case in the very nature of things must change from time to time.
For example, I pass by Confederation square every morning. At some time in the past somebody thought that, was a good plan for Ottawa. I wonder whether everybody thinks so today. I wonder whether that is the final plan for that section of the city of Ottawa. It must be clear that we cannot make any plan now which will be good for all time to come, in a nation which in twenty-five or .fifty or a hundred years we hope will be vastly greater than Canada is today, and with a capital which will grow as the nation grows.
The second clause in the main body of the resolution reads:
That a special account in the consolidated revenue fund, to be known as the national capital fund, should be created, to which appropriation may he made annually by parliament over a period of .years.
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That is simply a matter of bookkeeping which we need not take time to debate. It is a clause we can all accept.
The next clause reads:
That it is desirable that the work necessary to this end be under the supervision of the federal district commission, distinct from its ordinary operations ...	*
Some body must be given charge of the administration of this project, and I imagine that the federal district commission is as well fitted for the purpose as any other, if not better. I see no need for any other special body being created for this purpose.
The fourth and last clause of the resolution reads:
That the expenditure of moneys for these purposes should be conditional on the effective co-operation of the city of Ottawa and other municipalities within the national capital district.
The intent of that clause is I think reasonable and desirable, but I question whether it is essential. Are we to be tied up in the development of the national capital because there might be some disputes between the municipalities affected? Surely not. Surely means could be found through which these institutions, these municipalities-which are all interested, as we are, in the wisest plans to follow-could be brought together without tying our hands here as to what we shall do in case there may be dissension between certain of them.
A question has arisen in this debate as to the relative importance of expenditures on a national capital-as to whether we should commit ourselves now to support plans for a national capital, while certain other projects, such as highways, housing, national security measures, and so on, require additional support. Questions such as these are questions which every parliament must face. I would be disappointed if, when this resolution passes, either in its exact form or in some modified form, the Canadian people interpret it to mean that the parliament of Canada is undertaking to enter upon an extravagant plan for the development of this city. I would be disappointed if they take it to mean that we are to take off the city of Ottawa its proper share of the development of the city. I would be disappointed if they take it to mean that we are going to do something here, and leave something else that is more important uncompleted or only partly done.
If this resolution passes I will not put that interpretation on it. If this resolution passes what it will mean is that I, as one member of the parliament of Canada, am saying that

in the development of a national capital we should have some idea where we are going. We should lay plans that will prevent waste in the future. We should try to look ahead and lay plans that those who follow us will be proud of; and that we should help-no more and no less than to the extent that in a national capital the nation itself should contribute; that much, and no more.
I would not like to think that anybody in the city of Ottawa wants to draw from the parliament of Canada more than should be given to the city. On the other hand, I would hate to think that the parliament of Canada wants to lean on the people of the municipality in which the national capital happens to be. We must have some faith in one another, and some faith in the future. If I were to express the wishes of the Canadian people as I learn them from one end of Canada to the other, it is that we expect the parliament of Canada to bear its full share of the development of the national capital. The people -want to see here a capital of which they will be proud. But they do not wont to see us enter upon wildly extravagant plans while there are many other necessary things to do in every part of the countiy.
I would not support this resolution if extravagant expenditure around this city is what the resolution is to be interpreted as meaning; and the Canadian people would not support it. If we proceed with a cautious plan, one that is not extravagant, one that is carefully thought out, it will appeal to the Canadian people, and they will want to support it. But to the extent that we go beyond that, there will be resistance to appropriations from year to year. I should not like to think that any more is read into this resolution than that the parliament of Canada will be fair to the constituency in which the capital finds itself, and will be fair to its own future in having as its capital a capital of which the Canadian people would be proud.
I have just one practical suggestion to make. The resolution refers to an approved plan. I doubt whether hon. members are familiar with the details of even the plans that are now said to be in existence. I would point out that we are putting on the permanent record a resolution which has to do with the development of Canada's capital now and for the long future, and it is only an hour and a half since it was introduced. I suggest that the passage of this resolution would mean more and would be accepted more generally- not that anybody is going -to oppose its passage-if, when the Prime Minister's

Development of National Capital
estimates come up, we could have a full discussion of the details with respect to the present plans that have been spoken of as the master plan. 'Let us hope that whatever plan there is, it is in fact a master plan, and that everything that we can see from this vantage point is considered. But I suggest-that the resolution would mean much more to Canada if its final passage were left until after the discussion takes place on the details when the Prime Minister's estimates are up for discussion.


Mr. G. J. McILRAITH (Ottawa West):: As the member of the Canadian House of Commons for the electoral district in which the parliament buildings are situated, I should like at the very outset to say to hon. members how pleased I am that this resolution is now being dealt with. To me it represents a most important further milestone along the way of developing our national capital, a subject in which I have taken deep interest, not only before I was a member of the House of Commons, but also in the eight years since I was first elected as a member of this house.
I should like to think that the development of the national capital is something of great interest to all Canadian citizens. I should also like to think that as it is developed it will be developed in such a way as to epitomize the legitimate expression of the ambitions of all Canadian citizens.
At the outset perhaps I should say a word about the form of the resolution. I am particularly pleased to notice that it is presented for the consideration of parliament in the form of a resolution rather than as a rigid bill, with a grant of money to be spent over a certain number of years. It seems to me that the present method provides for that important element of control by parliament over the expenditures from year to year. By this method now adopted, parliament can examine into the particular circumstances as they exist from year to year. Parliament can examine the expenditures with relation to other items of public expenditures that may be made or that may be of lesser or more importance as circumstances exist at the time. Perhaps this is an effective answer to the questions raised by the hon. member for Rosetown-Biggar (Mr. Coldwell) when he spoke of certain other matters that require consideration and expenditure of public funds. The present method leaves control in parliament and also provides the opportunity for annual discussion and examination.
One point was made by the hon. member for Carleton (Mr. Boucher) with which I think I ought to deal. With his remarks
I was, in the main, quite in accord, but he referred to the development of certain parts by the provinces or for the provinces. I have no quarrel with that idea, except to say that it is the national capital that we are seeking to develop. It is fortunate that it is located on the edge of a great river forming the interprovincial boundary between two large and important provinces, certainly two of the most populous, which have attained a high degree of development. It is the conception of the capital as representing all the people of Canada, the nation's capital, that I would like to see emphasized, rather than something representing each province separately.
In other words, while I am strongly for provincial rights in their own field, I do not think this is the place to bring them forward and to emphasize divisions with respect to them. After all, our great political problem in Canada is the problem of geography. Surely, in the development of the plan for our national capital, we should refrain from over-emphasizing the difficulties of the problem of geography.
One -other thing is this. I would be sorry to see a certain area -allocated to each province, for the reason that there might develop a situation wherein one province, because of financial difficulties-and provinces occasionally do have financial difficulties-owing to its lack of -ability to spend money as generously as other provinces, would have a poorer development. I do not think we should permit that to happen. If we did permit that sort of thing it would tend to emphasize differences between provinces, and it would give rise to a feeling the opposite of pride on the part of this or that province in . what it had been able to accomplish. I do not think any of -us would want -that to happen.
The northern half of this continent is now a great nation, and our development should be such as to bring the position of that nation to the forefront in the world today. We should not do anything that would tend to divide the nation or make it appear as if it were a collection of little Balkam-like states. So far as the other parts of the remarks made by the hon. member for Carleton are concerned, I am in complete accord.
I was disappointed in the attitude taken by the hon. member for Rosetown-Biggar, the leader of the C.C.F. party. I must say frankly I had hoped that over the years we had developed to the point where hon. members in all parts of the house were interested in the national capital as such, and I can only say to the hon. member-I regret he is not ini his seat at the moment-that I was disappointed when he sought to treat this as a small matter of partisan advantage one way or the other.
5988	COMMONS
Development of National Capital
That is not good enough. It is not good enough to raise questions about the difficulties that provinces are having in the matter of road building, comparing the number of miles of road in Saskatchewan with the number in other provinces.


Mr. GILLIS:: That was interjected by the Minister of Agriculture.


George James McIlraith: No. He interjected
something on that before the Minister of Agriculture interjected. I am sorry that sort of thing should happen.


Clarence Gillis: He was talking about the trans-Canada highway.
AL-. McILRAITH:	I was here, listening
intently to the debate, and I heard it all. I was disappointed that the leader of the hon. gentleman's party should have seen fit to go into such side issues as the matter of highway construction. That is another matter altogether, and I certainly do not wish to discuss it now. Surely, in the development of the nation's capital, we can take a position that will preclude this constant attempt to go into by-paths and to raise questions of partisan advantage, claiming that this or that party has been more interested in certain social welfare matters, such as the development of housing in Ottawa. That is not good enough. It is not relevant to this question, so far as the development of housing is concerned, I do not take second place to the hon. gentleman or any of his party in my interest in it. I do not see why that question cannot be discussed in its proper place. I for one am frank to admit that things in the 'city of Ottawa are not all as they should be. Of course they are not. There are a great many things which I should like to see done to improve conditions for our people; but we can deal with these things each in its proper place, instead of seeking to prejudice a great cause like this in the minds of one segment or another of the population for the purpose of gaining party advantage at the moment. Surely the conception can be a little broader than that, and I hope it will be.
As to the resolution itself, it is also pleasing to me to note that the Prime Minister of Canada has brought it forward. Over the years I have come to know and to appreciate the great part which the Prime Minister has played in advancing this country, as a nation, to the high position which it now holds among the nations. I recognize the great conception he has had for the development of the national capital, and it is for that

reason I now express gratitude that circumstances are such that the present Prime Minister has introduced this resolution.
There are two more points I wish to discuss. Reference has been made from time to time to certain constituencies, or to certain municipal corporations. The whole scheme of the development of the capital involves a great many municipal corporations. The constant reference seems to be to Ottawa-Ottawa- Ottawa. I do not know whether it is less or more than half, but a relatively large part of the development is outside Ottawa altogether. I do not know' whether more than half of it is outside Ottawa in terms of dollars, but certainly much more than half of it is outside the city in terms of area and of developmental work to be done. It is therefore not simply a matter of one municipality.
Different municipalities have their problems as related to this one. They are acute problems, and it is a mistake to minimize them. But they have come forward writh a degree of co-operation that promises well for the future development of the scheme. The question whether this municipality or that should do this thing or that- is not something that can be dealt with here on a general resolution. Rather it is a question of deciding with the working staff such details as supplies, services and so on. In that connection, however, I should like to point out one thing. When this scheme was first being talked about, some of the municipalities seemed to feel that their own rights in local municipal matters were being interfered with. That fear has pretty well disappeared since it has come to be realized that it is not a matter of taking away any municipal rights at all. Rather it is a matter of leaving the municipalities all their rights in local matters, but trying to co-ordinate such matters to fit into the great national scheme, so that they will be part of a general pattern, as opposed to individual local questions not related one to the other.
It is perhaps well to realize, Mr. Speaker, that the status Canada has achieved as a nation in the world today has been won by the sacrifices of her soldiers in two world wrars. I hope the future development of this capital will be such as to please, in particular, those of our soldiers who have returned, and to express the feelings and ambitions, with respect to their country, of those who served their nation in the armed forces in two world wars.


John Bracken: Before the house rises,
can the Prime Minister tell us what will be the order of business this afternoon?

Report of Prices Committee


William Lyon Mackenzie King: If this resolution carries before we rise, the first order after three o'clock will be resuming the debate on the motion of the Minister of National Health and Welfare (Mr. Martin) respecting concurrence in the report of the prices committee. After that, I think, there are only the remaining estimates to be considered.


John Bracken: Then does the Prime Minister wish to have this motion pass now, rather than to have his estimates dealt with first?


William Lyon Mackenzie King: I think it might be well to have it passed now.


Mr. J. H. HARRIS (Danforth):: I should like to say just one word, if I may be permitted to do so. If it is the wish that this resolution should pass now, I have no objection; but I do want you, Mr. Speaker, and the members of this house and the public to know that the Prime Minister (Mr. Mackenzie King)-to whom I extend congratulations on the work he has done-is not alone in this proposition. All of us, from all parts of Canada, are anxious to be associated with this work. It is not to be a monument only to the Prime Minister and his deputies here in Ottawa.
With that one sentence, Mr. Speaker, if it is the desire to deal with this resolution now, I am ready to vote for it.


[Stage Direction]
Motion agreed to.
At one o'clock the house took recess.
The house resumed at three o'clock.

[Stage Direction]
The house resumed from Saturday, June 26, consideration of the motion of Mr. Martin for concurrence in the report of the special committee on prices, appointed February 10, 1948, and presented to the house on Friday, June 25.
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, on Saturday evening at the time of the adjournment I had begun to refer to the various recommendations, and to the circumstances that it was peculiar that the recommendations contained in the report were first brought to the attention of the government members of the committee-some of them, rather-almost one week before they were brought to the attention of the Progressive Conservative members of that committee. I
referred among other things to the statement made by the Prime Minister (Mr. Mackenzie King) in his opposition to the committee's making recommendations; to this he took some objection. I referred to the pages in Hansard, and I shall now read what the Prime Minister said in that regard. On page 749 of Hansard we find this:
Mr. Lockhart: What about recommendations?
Mr. Mackenzie King:	My hon. friend asks
about recommendations. I am glad he mentioned that, because that was the next criticism I was going to refer to. May I say that hon. gentlemen opposite have taken exception to the resolution not specifying that the committee should bring in recommendations. May I say that at this stage the obligation was left out deliberately by the government, and for this reason. If it had been added that the committee were to make recommendations we would now be hearing from hon. gentlemen opposite, and they would have been speaking correctly, that the minute you give to a committee of this kind the business of making recommendations, that minute you are certain to start all kinds of political controversy.
I pause here to ask: what difference did it make whether that power was granted at the time the Prime Minister spoke, of later?
You start issues of policy making. You would start pros and cons between members of the committee as to whether this recommendation should be made or that, and the time of the committee instead of being used for the purpose of getting at the facts would be used for the purpose of trying to bring forward one particular policy or another. I say this, that if the committee, after they have been at work for some time and have the facts before them, feel that they would like to have their powers enlarged and be given the opportunity to bring in recommendations, I for one shall be very happy to further a purpose of the kind.
The recommendations were made, regardless of whether power was granted or not. I again ask the Prime Minister when he speaks, as the press report says he will: why did those recommendations have their origin outside the committee?
I come now to what I was dealing with the other evening. What is the government going to do about these recommendations? It should not wait until next year or next session, but should act in the present session; because the prices situation is accelerating month by month-accelerating at a rate that the Minister of Finance (Mr. Abbott) indicated last November would not be arrived at at any time. I ask the Prime Minister this-for, after all, it is the government which must take the responsibility-why is it that some action has not been taken with respect to prices? Is it because the government of Canada is afraid of what the United States might say about prices in this country? I shall not
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Report oj Prices Committee

quote the exact words in another debate, because to do so is not in accordance with the rules; I refer to what the Minister of Justice (Mr. Ilsley) said on May 26, 1948, as reported at pages 4396 and 4397 of Hansard, wherein he indicated that if Canada were to act, it might be taken in the United States as action that would not contribute to international good relationships.
I cannot understand why Canada should allow the determination of what our price levels should be, or what the action taken by the government should be, to be controlled by what another nation might wish or desire. But it does indicate this, that again we have the same old story of the top bureaucracy of this country-I might call it the gilt top bureaucracy-over and over again following a policy made in Washington, and making it applicable to Canada.
Here is what the Minister of Finance said, speaking in New York in January last, when he was questioned as to what the government was going to do about prices:
It is possible that there might be selective reimposition of price control, but that will depend on what parliament decides and what may happen down here.
Surely parliament should determine in Canada what the needs of Canadians should be, and what should be done in regard to this matter, instead of abdicating in favour of another country the right to determine for Canada what is good for Canadians.
Sometimes I wonder what the government's policy is. On November 17 last the Prime Minister spoke in a radio broadcast, and told of the new world that had arrived. You could just see the trade barriers falling down. You could see 400,000 Canadian cattle marching across the line into the United States. But hardly had he concluded his broadcast when the Minister of Finance went on the air and said, in effect, "Not yet; not yet; not yet!" The Prime Minister with one policy; one of his ministers with another.
In February last the Minister of Finance, apparently believing the difficulties were solved, speaking in the city of Brantford said this:
It is too early yet to start throwing our hats in the air, but it iooks as if the downward price trend this week in the United States might mark the turning point.
Again, Canada depending for a solution of her policies upon what is occurring in the United States. The report continues:
He said the Canadian price trend would follow that of the United States in any longterm movement because the economies of the two countries were so closely linked.

Over and over again the government expressed the hope for, but did not act to achieve, some measure of increase in production in this country to the end that a reasonable price level would thereby be attained.
What is the government's policy on this subject? If I quoted someone other than a supporter of the government, it might be argued that I was giving prejudiced evidence. I shall refer to a speech made the other day by one who is often spoken of as another heir apparent, Mr. Stuart Carson, Premier of Manitoba. What he said represents the criticism of the leader of the opposition and of this party regarding the prices of agricultural products. He attacked the federal government and the Minister of Trade and Commerce (Mr. Howe) for treating the provincial governments like a " lot of robots." Premier Drew has said that on occasions; Premier Duplessis on occasions; and now the Premier of Manitoba, a supporter of this government, says that the Minister of Trade and Commerce and the federal government have endeavoured to treat the provincial governments like a lot of robots.
I quote from a summary of a report of Mr. Garson's speech and bring it to the attention of the Prime Minister. Mr. Garson emphasized that the farmers could no longer be asked to continue as the only large economic unit whose prices are under government control. He declared that the wheat board as now constituted was another instrument of the government which was acting contrary to the farmer's interest in their policy of closing off the markets of the United States to Canadian farmers and offering farm products to Great Britain at low prices and then requiring the farmer to bear the burden of those lower prices.
The Premier of Manitoba took the same view that this party takes, that there can be no objection to assistance being given to Great Britain, provided that it is given by the people as a whole and not placed as a responsibility upon the farmers of this country.
I should like now to refer to a few of these recommendations. There is a vote of 850,000 in the supplementary estimates to cover the cost of a royal commission on prices. A committee of parliament has sat for four months and has made recommendations that somebody else prepared for them. Why the necessity, why the need for a royal commission, except that the government again wants to postpone action on this matter? These delaying tactics can have but one result; they place parliament in contempt of the people of this country.

Report oj Prices Committee
Let us act; let us stay here until something is done. The responsibility rests primarily upon the Prime Minister and the government. I say it rests upon the Prime Minister, because in today's issue of the Financial Post there is an article by Kenneth Wilson in which it is stated that nothing is being done, that the government is not showing any leadership because of the divergent viewpoints among those who would be heirs apparent. The Prime Minister, having only two or three months, or whatever the length of time may be, to lead the government, is not giving to those who support him in this house the leadership in this matter that he is capable of. Recommendation No. 3 reads:
That the government amend the regulations of the appropriate legislation, if that be found necessary, so that immediate specific action can be taken wherever the evidence discloses flagrant cases of profiteering at the consumer's expense.
Why has not the government acted up to now? It has the wartime prices and trade board. I am not going to refer in detail to the regulations of that board, except to say that sections 3 and 8 give the board absolute power. All that has been done about this challenge of profiteering since the committee was set up is to be found in recommendation No. 3, where it says:
The work of investigation and fact-finding

I would almost say fault-finding.
-already undertaken by the committee has resulted in twelve prosecutions of those profiteering in butter, with three convictions already registered.
Then it goes on:
In addition, proceedings have been instituted in five cases of profiteering in the fruit and vegetable industry.
Does that look like a serious endeavour to prosecute exploitation? Does that look as if the government or this board wants to act? The report indicates that there is evidence of profiteering in some cases, but it does not name the wrongdoers. I remember that when the Prime Minister spoke in February he said that if there was one thing that would prevent a rise in the cost of living-I am merely generalizing-it was fear of exposure of profiteering interests. Where is there fear of exposure in saying that there were some eases, somewhere, some place, and then leaving it to each of us to look through 3,000 pages of evidence in order to ascertain where they were.
The next recommendation reads:
That the government consider the removal of import restrictions now in effect on certain fruits and vegetables . . .
I ask the Prime Minister: Did the United States department of state make representations to the government of Canada that the embargo on fruits and vegetables should be removed? That is what the United States press says the government of the United States did recently.
Another recommendation reads:
The government should give consideration to the desirability and practicability of restricting price rises by special taxation of unreasonable profits.
Is that going to frighten anybody unless it is acted upon? If that is the solution, does the government, intend to introduce measures at this session, or does it intend to wait six or eight months longer, while prices pyramid, before taking any action? It must be remembered that the government cannot say that it has not a solution, because one of the policies laid down at the Liberal convention of 1919 was this: Give us a chance and we will show you how to control high prices. Now prices are higher than they ever were during or after the first world war, at a time when there were no such controls as existed during the last war.
There cannot be any dispute about the recommendation in connection with business accounting, but it is a strange thing that it took three long years to find' that out. The next recommendation reads:
That the government give immediate consideration to amending the Companies Act to provide for a more complete disclosure of information about inventory reserves deducted in determining profits.
"Give immediate consideration" does not mean after the convention is over; it means now, in this parliament, before it adjourns.
My friends to my left strongly support this report; they say it is a simple thing to solve the price situation. Keep wages going up, keep farm prices going up, put a ceiling on, and everything is solved. But they did not do it in Saskatchewan, and they had the law on the statute books there.


Mr. MATTHEWS (Kootenay East):: They did not do it in Ontario, either.
Mr. DIEFENBAIvER: Saskatchewan is the experimental ground where you can try out your policies. It is interesting to note that the act was assented to by the lieutenant governor on April 1, 1947, and it ended on April 1, 1948.


An hon. MEMBER:: April fool's day!


John George Diefenbaker: Yes. They never acted on that law, though they speak with such glibness of what could be done in their own experimental station. With all the power
Report oj Prices Committee

to control prices at their command under that act, they let that act dissolve itself into nothingness. They are in favour of this report, although the committee report says that it does not believe in price control in general. The report reads:
The committee does not feel that the interests of Canadian consumers would be safeguarded by a system of over-all price and related controls.
When they support this report, will they support that section, which is the essence of it? How well the recommendations are worded, sir. If you believe in some of these things, you are required to vote for all of them whether you like them or not. You are required to approve the whole report, and thereby allow the government to exculpate itself through a report which says: Well, we have not done it, but if it is done now, all will be well.
I proceed to the next recommendation:
The committee is of the opinion that the government should consider whether the time has not come to remove the special excise taxes on commodities in common use in Canada.
When? Four months ago when the committee was set up? Four days ago when the committee ceased to exist? Why did not my friends on the other side of the house act when the excise act amendment bill was before the house, and when we on this side of the house asked that that very thing be done, and supported the doing of it?


Mr. KNOWLES:: We voted it down in committee.


John George Diefenbaker: Who are "we"?


Stanley Howard Knowles: The committee, including yourself.


John George Diefenbaker: My hon. friend is pluralizing himself again. We voted it down, he says. They apparently disagreed then as to the necessity of reducing the excise tax. That is typical of the attitude of my friends to my left. On the one hand they say: Support the excise tax, which inevitably finds its w'ay into the cost of living. In the next breath, they condemn the government for not doing something in regard to controls.


Stanley Howard Knowles: On a question of
privilege-


John George Diefenbaker: I am making my speech now.


Stanley Howard Knowles: My hon. friend misunderstood me. I was referring to the time when this house was in committee of the whole and by a majority voted down the taxes the government was seeking to impose.


Clarence Gillis: When the hon. member for Lake Centre was absent.


Some hon. MEMBERS:: Oh, oh.


John George Diefenbaker: My hon. friend need not talk about absences. I was not absent.


Clarence Gillis: Wrhen the vote was taken, you were.


An hon. MEMBER:: Conveniently absent.


John George Diefenbaker: That is indicative of the C.C.F. mind, which always ascribes to others that which they do themselves. I was not absent then, and have not been absent when any vote was taken at any time in this house, except when away on business.


Clarence Gillis: The record speaks for itself.


John George Diefenbaker: With my hon.
friend's interruption I agree.
I referred to the statute passed in- Saskatchewan, "An act -to confer certain powers upon the lieu-tenant governor in council", by which the lieutenant governor in council was empowered- to make orders and regulations for-
-controlling and regulating the prices at which goods, wares or merchandise or any class or classes thereof shall be purchased or sold by retail within the province or any part or parts of the province for use in the province;
The C.C.F. placed that act on the statute books of Saskatchewan, and did nothing about it. The record indeed speaks for itself.
I pass to the next recommendation of the prices committee:
That the government give close consideration to the question of revising the present rent controls with a view to removing the causes of individual cases of hardship.
Why should the government give consideration to that question? It is a power which the wartime -prices and trade board already has and exercises through its rental regulations. It is a power which is -being exercised regularly, with appearances of landlords and tenants before judges throughout this country. Was that recommendation just so much verbiage, to lead the people to -believe that something more was to be done? Are we to wait six months before anything is done? Are you going to act upon it in this parliament, or are you going to act again by order in council?
Then after recommending what should be done, the committee finds another loophole, for section II of the report says:
The committee realizes that in the long run the federal government may be faced with constitutional difficulties in regard to its operations in the field of prices.
You see, Mr. Speaker, how it goes. They take a line, and then deviate a little from it.

Report oj Prices Committee
They say what should be done immediately. They say that consideration should be given, but add, in effect: Remember that if we do not act, in the long run. it will be because we cannot act on account of constitutional difficulties. It is interesting to note that the government are starting to abandon the doctrine of emergency, on which they placed so much reliance. Will the Prime Minister say whether the provinces are being consulted? Will he say whether, if prices can be controlled, it requires the assistance of the provinces? If so, why does not the government bring in a measure such as it did on barley and oats, which required correlative legislation by the provinces to make the federal legislation effective? What has the government done about communicating with the provinces? While Manitoba was not very anxious to co-operate on oats and barley because the premier of the province saw through the sham, I am sure that every province would join and give assistance in solving the problem of the high price level which bears down on all our people.
Here is the next recommendation:
That the government, in considering the removal of existing embargoes on the exportation of food products from Canada, give careful study to the supply situation here, and the proper balance to be maintained between the interests of both producers and consumers.
I do not know whether this has anything to do with the 400.000 head of cattle for which entry is promised under the Geneva agreements, or whether it has reference to some qualified promises which have been made lately that the embargo on cattle is to be lifted. While some government supporters say the embargo is to be lifted, the committee says to the government: Watch out; give it further consideration. That is just another example, sir, of that diversity in a disunited cabinet of which we have seen so much evidence during the last three or four months.
The next recommendation is this:
That the government instruct the dominion bureau of statistics to publish periodically an analysis showing the way in which the consumer's dollar is divided among the various elements which enter into the price of basic commodities.
Another good recommendation. Why has it not been done? If it is done, it will be the best answer to my hon. friends to the left who spend their time preaching about how much of the dollar actually consists of profits to those who place their capital in industry.
The record in the United States clearly indicated in a recent survey that the statements made by my hon. friends of the C.C.F. have no justification there, and I say, according to the evidence placed before the committee, that, excepting those nameless corporations who stand condemned in the report, industry as a whole in this country today is receiving but a fair share of the total consumer dollar. What is our recommendation? First, remove the excise tax. One of the reasons why the standard of living of the people in the lower income brackets is going down is that they are caught in a squeeze between taxation, which is taking 23 cents out of every dollar of the total income in the country, and rising prices, from which no relief to speak of was given this year. Second, the time has come for action, before the present session is concluded, to give relief in the matter of income taxes so that our people may be able to spend the largest possible portion of their income rather than have the government spend it for them.


James Horace King: I am sorry to interrupt the hon. member, but he has spoken for more than forty minutes.
Mr. SOLON E. LOW (Peace River): I do not intend to take too much of the time of the house this afternoon, but I do think that I should place on record a few things which are pertinent to this whole question of prices, and particularly place before the house a picture of the situation as it exists in Canada owing to the things governments have been doing.
I believe that the government itself feels that it is now stewing in the hellbroth which it has created for itself as the result of its own policies. Prices are still running wild in this country, in spite of the months of investigation by the committee on prices into the cause of prices rises. As a result of the prices situation a good many Canadians are suffering from lower standards of living. I refer now more particularly to pensioners, and to persons in receipt of small salaries. As I go about amongst people I find a widespread fear of the future, a fear which I believe has been induced by their past experience. A type of clever propaganda lias been playing on this fear and trying to make the people move in a certain direction politically.
Altogether too many people in Canada have come to the conclusion that the government flatly refuses to give them the results that they want in the management of their affairs. There is evident on the government benches, to anyone who takes the trouble to listen and to watch, a callousness and indifference to the wishes of the people, and an attitude that can only be interpreted to mean that the government thinks it is not the will of the people

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that should be used as the foundation for government policy but rather that it should be what a bevy of experts think is good for the people of Canada. That is obvious to anyone who studies the situation at all carefully. This being true, I ask, where is democracy in this country?
I will guarantee, Mr. Speaker, that ninety per cent of the Canadian people want, and have wanted, lower consumer prices for the things that they have had to buy. The people have been completely justified in their belief that this result, lower consumer prices, could have been achieved, in some degree at least, without destroying incentives or without dictatorship methods of any kind; but the government ignores what the people want. Instead they have substituted the recommendations of a horde of intellectuals who think that they know what is good for the people.


Mr. SINCLAIR:: Is that the prices committee?


Mr. LOW:: I did not have them in mind especially, but they can be included, yes. One result of this frustration on the part of the people has been to drive thousands of Canadians into the camp of the socialists, in whose propaganda and irresponsible promises they seem to find some hope for the future. The people are not socialists. I do not believe for one second that they are socialists. Furthermore, they do not really want socialism. I have just returned from Saskatchewan, where I was in conversation with a good many hundreds of people. They do not want socialism.
Mr. TOWNLEY-SMITH: They do not seem to want Social Credit, either.


Solon Earl Low: Social Credit is on the way up, and my hon. friend will find that in his own constituency he needs to look to his guns, to mend his fences.


John Ewen Sinclair: There are a lot of dead ducks over there now.


Solon Earl Low: That is right. They think that what they are going to get is a milk-and-water type of socialism that just sort of dabbles its toes in; but, Mr. Speaker, once they get their eyes opened they will find that it is not a milk-and-water type that they will get. They think that this promises heaven and earth, and all because they have been led to believe that the thing they should seek first, last and all the time is social security.
It appears to me, too, that there is an ominous note in this whole situation across the country. Thousands of frustrated, freedom-loving Canadians have been persuaded that it is in their interest to surrender some of their

freedom in return for this social security. They have been led to believe they cannot have social security without the surrender of some of their freedoms. That is entirely false propaganda. But if those who agree with me that it is false propaganda continue to preach the virtues of private enterprise and at the same time practice the type of government which utterly destroys the possibility of private enterprise delivering the good results which it is capable of delivering, then, Mr. Speaker, it is only common sense to expect the people to turn to socialism or communism with their false hopes of planned economies, their regimentation, their restrictions, and the abnegation of the free agency of the people. People naturally will turn to anything which holds out to them any hope of getting relief from a situation that has rendered them almost hopeless in many areas of the country.
Let us not make the mistake of thinking that the government's policy alone is responsible for high prices. I think the evidence brought out by the committee indicates that there are many businesses in Canada which have disregarded the best interests of the Canadian people, including themselves as businesses or as industries, by taking a profit which is out of all proportion to what they should be taking under the circumstances. This does not apply to all businesses, by any means; let me make that abundantly clear. But it does seem that certain key businessmen -and when I say "key businessmen" I mean those who by their organization and position have been placed in a position where they can control the major portion of any commodity that might be distributed in the country to other outlets-I say it does seem true that certain of these key businessmen must bear some of the responsibility for the unusually high prices that do prevail in Canada, and have prevailed for some time.
We condemn the practices of that type of businessmen, wherever they may be. We think they have brought suffering to a good many people, and we believe they have brought discredit upon the many thousands of decent Canadian businessmen who have tried to play the game all along. Not only that, but they have also served, by their unwarranted actions, to bring discredit upon the system of private enterprise which has given them their own opportunities and their own security in the businesses they carry on. Why these miscreants-I might call them that, Mr. Speaker-have conducted their affairs in such a manner as to play right into the hands of those forces in our land who would destroy the

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right of men to choose their own way of life, and decide whether they will go into business or not, is more than I can possibly understand.
I believe it is the duty of the people of this country to hunt out and hold up, so that all can see, those businesses and industries that are showing callous indifference to the welfare of the nation. They are a menace to the nation; they are a menace to our way of life. But, thank God, the great majority of businessmen and industrialists are not taking advantage, and have not taken advantage of opportunities that might have been theirs to exploit the people in prices and profits.
I should like to refer for a moment to something which my colleague the hon. member for Jasper-Edson (Mr. Kuhl) said the other day. Speaking of unwarranted profit taking, he mentioned a case which is referred to on page 47 of the report, to which I should like to refer for a moment. I quote:
The committee took special notice of the transactions of two Toronto firms involving an importation of California potatoes, which were ordered just before the import restrictions were imposed on September 21, 1947. As a result of this ban on imports, these potatoes represented the only supply of new potatoes in Toronto at that time.
On the four cars the cost was submitted to have been $9,579.69 and the selling price was $46,822.50, leaving a gross profit of $7,242.68. This was a gross profit of 75-6 per cent on cost and 43 per cent on sales.
I do not wish to labour the case. I simply wish to put straight to the house this important admission on the part of the committee. They did take special notice of this case; they admit that the potatoes did come in just before the government's restriction on the importation of potatoes was put on, and they also say that this was the only supply of new potatoes in Toronto at the time. People could not get any more, and therefore there was a rush, as naturally there would be among human beings, to get such potatoes as could be had. and people having money would pay any price to get them. Under the circumstances, it is not a question of condemning people who do that, although I abhor that sort of thing. It was not in their best interests, it was not in the best interests of businessmen generally-


Mr. HARTT:: Why not? Why was it not in t'heir best interests?


Solon Earl Low: Simply because they must know, as the hon. member for Cartier knows, that anyone who takes advantage of a situation such as that, no matter how it is brought about, no matter who is responsible is bringing discredit on businessmen generally. There has to be some sort of responsibility on the
part of businessmen; and, as I have said, there has been, in the main, evidence of that sense of responsibility.
But let us not overlook the fact that the situation itself was created by government policy, as admitted in the report. The report appears to be a grudging type of death-bed repentance. I do not know whether it was dictated to the committee or imposed upon the committee. Some say it was; some say it was prefabricated. I cannot say that, but at any rate it certainly is a grudging type of death-bed repentance and it just does not ring true-that whole report.
The report seems to me to be an innocuous thing, a thing almost of pure expediency, which was designed by the government and perhaps foisted upon the committee to bolster the failing fortunes of a party that has become bankrupt of ideas, and certainly bankrupt in the courage necessary to meet a situation that has become nothing short of a crisis in this country. As a result of that lack of constructive ideas and of courage the people are drifting into a feeling of frustration, in which condition they fall prey to socialists and communists, with all their cunning and all their fanatical energy. The country is seriously endangered thereby. The signs are there, and I challenge the government to warn the people and to take heed themselves before it is too late.
Now a word about taxes and how they affect the whole price situation. I am told that on a number of occasions in the committee, though I was not a member of it, companies coming before the committee to give evidence were asked to make submissions on the taxes they were required to pay to the various governments. I have one such statement supplied by a Canadian company to which I shall refer later.
In the main, one of the greatest reasons for the high cost of living is and has been taxation. That is a matter about which the government can do something. It is a matter about which the government has been warned time and time again, but regarding which it has done nothing. High onerous taxation goes on, and as a result of that high onerous taxation, if anyone will take the trouble to investigate the selling price of a single one of the hundreds of articles in common daily use, he will find that the taxes imposed by the various governments in Canada make up from 80 to 90 per cent of the total price paid by consumers. That seems a very high percentage, but it has been proved to be true on a number of occasions.
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It is true with regard, let us say, to gasoline and oils that are used by farmers and industrialists and people generally in the course of production. I am not referring entirely to gasoline and oil used by pleasure travellers. It has been shown by expert investigators that fully 80 per cent of the total consumer price of a gallon of gasoline goes to the various governments in taxes. It can 'be shown that up to 95 per cent of the total consumer price of a good many articles that Canadians use from day to day, which enter into their overall cost of living, is taken in taxes by the various governments. That makes it obvious that if you are going to do anything worthwhile about the cost of living, the place to start is in the direction of taxation.
Let me refer for a moment to a return which was made to the prices committee on June 21 in relation to this very question of taxation. Here is a letter from Canadian Celanese Company Limited, signed by A. G. Allen, treasurer:
June 21, 1918.
Mr. Fabio Monet, K.C.,
Counsel to the Special Committee on Prices, House of Commons, Ottawa Dear Sir,
In reply to the request made hy Mr. Kuhl, we are pleased to list below the details of taxes charged against income for the year 1947, totalling $2,794,460.95.
And here is the breakdown:
Dominion of Canada income and
excess profits taxes.. $2,167,000.90
Dominion sales and excise taxes	89,447.22
Provincial taxes on income and
_ capital	 397,078.44
Provincial tax on purchases ....	41,771.63
Municipal taxes	 98,770ill
Miscellaneous	 393.55
Of course that represents only taxes paid directly by the company to these various collecting agencies. It does not take into consideration at all the percentage of payments eventually appearing as taxes which the company makes directly to railways and other transportation companies and those giving service in the production and distribution to the consumer of the goods the company produces; a percentage of tax content which often runs to fifty and sixty per cent of the total consumer price of the goods. Every railway carrying this company's goods pays a large amount of taxes to these three taxing authorities, municipal, provincial and dominion, and such taxes are not included at all in this statement. The letter goes on:
As the total sales for 1947 were $17,531,957, we calculate that if we had paid no taxes in this year a reduction in the sales price of our products of 15-9 per cent would have yielded the same net profit which we obtained in 1947.

That is a pertinent statement, and is the best evidence I could possibly give of the pyramiding effect of taxation such as we have in this country. It seems to me, Mr. Speaker, that the cost of living in Canada could be reduced fully twenty per cent within a period of months through a wise and carefully planned reduction in taxation. That fact ought to be driven home with all the force we can muster; and the people should unite in their demand for an immediate beginning in tax reduction.
In the press I have noticed that considerable emphasis has been placed on the representations made by Ontario Liberals to the Prime Minister to drop the 25 per cent excise tax. More than two months ago the Social Credit League of Ontario sent a letter to every member of this parliament demanding the removal of that excise tax, and further asking for an immediate start in the reduction of taxation of all kinds which tends to push up prices and causes the cost of living to get out of control. Again I point out that the hon. member for Red Deer (Mr. Shaw) moved an amendment to the speech from the throne in which he advocated substantial tax reduction as a means of bringing down living costs. Moreover, on May 21 of this year I presented to the house a social credit budget in contrast to the one brought down by the Minister of Finance. In it I emphasized proposals which would lead to tax reduction as a means of price reduction. In that speech, and in those given in support of my budget, proposals by the hon. member for Lethbridge (Mr. Black-more) and the hon. member for Acadia (Mr. Quelch), we showed in detail how the reductions could be made without in any way affecting the services given the people of Canada. We did not suggest particularly at that time the introduction of anything that could not be introduced in this country with safety; and we are not now suggesting that the cure-all for the price situation is the introduction of more money. We realize that we must hold the money stream in control until such time as excess production in this country, which otherwise would be wasted, requires a further supply of money. We say the line has to be held, however, and held scientifically until such time as that condition comes about wherein more purchasing power is needed.
One of the great weaknesses of the report brought in by the committee, as I read it, is its failure to divulge just what has been the effect of taxes upon prices. This matter of taxes has been engaging the attention of thinking men everywhere. Men are beginning now to pay much more attention to it than ever before. I have been interested in follow-

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ing what has -been done by one of the great advocates of an incentive system, supplying incentive by decent management-labour conditions, not only in order to increase the amount of production the people of -the country have to enjoy, but also to help bring down prices. I have in my hand a copy of a book called "Lincoln's Incentive System", by James F. Lincoln, president of a great electrical corporation in the United States. In this book the -writer outlines the details of a system his company has used, and indicates that lie has no labour-management troubles at all. Labour is satisfied; they have never had a strike. Year -after year, with the help of his employees Mr. Lincoln and his management have been able to effect new methods and procedures in manufacture that have resulted in -lower -prices to th-e consumers. But, as he points out, as these new methods have effected savings in costs that otherwise would :be passed on to the consumers, governments have come along and introduced taxation which more than made up for the savings effected by the new procedures and greater efficiency. Prices therefore were not reduced-, but rather went up.
I want to read just one or two short extracts to show what Mr. Lincoln thinks about this matter of taxation and- how it affects prices. First I refer to page 69:
It is safe to say that the present tax laws will he changed to encourage efficiency or we shall disappear as a great industrial nation.
That is the warning of a man who knows something about the effect of taxation upon production and prices. Again, at page 71 he says:
There must be a new approach to this matter of taxation. We must see it in its true relationship. Taxes are the greatest of all reducers of purchasing power. As a matter of fact, at this time taxes are largely the reason for much of the misunderstanding on wages between the industrial worker and his employer. The worker sees his standard of living going down. His only reaction is that his employer is not paying him enough since he cannot live as he did before. He is working as hard but is not enjoying the same kind of living.
Then to conclude this portion, at page 73 Mr. Lincoln says:
Perhaps the reader may feci that I am labouring this point of taxes and its relationship to the standard of living. I am not. The whole question of jobs, standard of living, industrial and human development, depends on our handling of this problem of the individual's relationship to his government. The answer that the American people give to this problem will determine not only the fate of incentive management but also their own. Serfdom and slavery we feel cannot happen here. However, taxation will accomplish the result as completely here as it has in countless cases in all history.
That ought to be a warning, it seems to me, to thinking people everywhere. If taxation is pushing up costs and is ruining the chances of the people to catch up with rising prices, then it seems to me that we ought to be doing something about it.
I should like to say a word or two in conclusion about incentive. If the cost of living is to be brought down to a reasonable level there must be high production and plenty of competition. Social C red iters believe in these two things, and in their effectiveness in stabilizing any economy. It stands to reason that if we are to have high production and plenty of competition, then there must be incentive to produce. Anything that will kill or destroy incentive has the effect of removing from the use of the people production which could be brought into being.
There are some in our country who advocate that the only way to deal with the present situation is through government ownership of the means of production and distribution. But the thing which always interests me about the claims of these people is that they never tell us what they will use for incentive. That is the dangerous part of the matter. You cannot get people to make an effort unless there is incentive, unless they think there is some personal reason why they should make an effort. And that reason is always associated with themselves and their own individual betterment.
Again I say, I should like to hear, just for once, what these people who advocate government ownership have to offer by way of incentive. We feel that there must be incentive, and one of the best ways to get incentive in production is to make government policies such that a larger percentage of the production of a man's own labour remains in his own hands for his own use or his own distribution. Where do profits stand in this incentive scheme of things? Let me make clear that we as Social Crediters have never made the claim that the sole aim and objective of the production effort should be profits. We recognize, however, that profits have their place in the scheme of incentive production. They do provide an incentive. But any time that we begin to make profits the sole aim and end of production, instead of the satisfactory use and distribution of the goods we produce, we begin to get ourselves into serious trouble.
However, Social Crediters do say that profits are an incentive and that, as such, in any free and responsible enterprise economy, profits must remain. We have no objection whatever to reasonable profits being used as an incentive to all-out production.
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Mr. WRIGHT:: How do you determine a reasonable profit?


Solon Earl Low: The people, if they are in a position of having sufficient purchasing power to buy the goods in existence, will soon indicate what they consider reasonable profit. They wall soon tell industry and management what prices they will pay for goods.


Percy Ellis Wright: That is to say, industry is entitled to all that the traffic will bear?


Solon Earl Low: No; industry is not entitled to all the traffic will bear, especially when government dabbles in restrictions which throw our economy out of gear. It is entitled to all the people think it should have.


Percy Ellis Wright: That is all the traffic will bear.


Solon Earl Low: It is what the people with purchasing power in their hands will tell you.


Percy Ellis Wright: All the traffic will bear.


Solon Earl Low: No. The way you interpret "all the traffic will bear" is another thing. The exaggerated and stupid nonsense I have heard this last while about "what the traffic will bear", and the tremendously exaggerated statements which have been made about the terrible depredations of profiteers tends to undermine the confidence of the people in the free way of life.


Percy Ellis Wright: What about the report concerning the optical people?


Solon Earl Low: I should like to make one further reference to Mr. Lincoln. I shall quote briefly from page 39 of his book, where he says:
The attitude of our own government has been largely the regimentation of its people in all matters in which it took action. It has also more recently by taxation, which is steeply punitive to effort and ability, not only removed the incentive to develop but made the penalty so great that no one would dare develop to his limit.
That is an admission that one of the grievous problems we have, not only in the United States but in Canada, is that people who operate business enterprise are afraid to go all-out in their production effort for fear of heavy penalties as a result of government policies of taxation. They are afraid to develop. They are afraid to expand as they should, to give us the goods which Canadian people want.
The committee's report is, in my judgment, most disappointing in that it indicates that the government have not yet begun to realize what is required if we in Canada are to enjoy an all-out productive effort. And certainly

because of their failure to realize what is necessary in the wray of incentive, then surely they have not begun really to show the extent to which Canadian people can produce if the ball and chain is taken off their feet and the manacles off their hands, so that they can launch out and swim for themselves without fear of penalty.
The most effective way now to meet living costs is to get production. We must have higher production. But that requires incentive; it requires lower taxation and, above all, it seems to me that it requires action. I submit, Mr. Speaker, that the people of this country are demanding action from the government, not deferred promises and excuses.


Mr. RODNEY YOUNG (Vancouver Centre):: Mr. Speaker, I am interested, naturally, in the subject which has been under debate in the house these many hours; more interested than I would be probably in any other subject. I am a new member, having been here for only about a week. I have listened to hon. members. I have been awed by their oratory and impressed by their ability in debate.
When I listened to the hon. member for Lake Centre (Mr. Diefenbaker), heard his mellifluous phrases, observed the sounding periods, the delicate motions of his hands, the shaking of his grey and curly head, I found myself believing that the house was not debating prices, but philosophy.
At the present time we, the representatives of the people, are engaged in examining a crucial problem, one which affects the bread and butter of those among our people who are least able to have their standards reduced. I come from a constituency in which the majority of the people, just as the majority of people across Canada, work for wages. When prices rise, if wages do not rise, they are robbed of the fruits of their toil.
At the present time on Vancouver island, a few miles from my constituency, the provincial health authorities have been examining the conditions among six thousand school children. That is in one of the richest agricultural districts in the country. Those school children were found to be suffering from malnutrition.
Our people are not starving to death, but they are suffering from a lack which, in a country such as ours, calls for immediate action on the part of the elected representatives of the people. I have listened to this oratory on the part of my hon. friends to the right, and it seems to me that those hon. members, like the elder Cato, end all their speeches with the same statement, "Carthage

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must be destroyed"; with them it is, "The government must be destroyed". Some other hon. members on this side of the house have the same habit. I would say to those hon. members that possibly I feel much as they do. I like the members of the government party individually quite well, but I detest them collectively. At the present time I am not interested in defeating the government or in using prices, the most important thing to the people of Canada, as a club with which to beat the government over the head. I say that if ever there were a time when party should be laid aside and the interests of the people considered to be first and foremost, that time is when there is a discussion on the findings of the committee on prices. I have looked over the recommendations of the committee, and I have tried to see them as people who have never entered this house or who never expect to enter this house will see those recommendations when they are published. Will those people find in this document some hope for the future? Will they find that their wages will not have to be stretched as they have been stretched to the point where they have to do without the things that they have learned to consider necessary, the things needed to maintain health? Will they find that the appetites of growing children which are so much greater than those of adults will not have to be cramped, because government members of parliament at last have decided that they will do something to cure the critical conditions of the wage worker?
I turn to the first recommendation. What does it mean? The people who will read this do not speak the officialese in which this and the succeeding recommendations are written. They do not use what the British call gob-bledy-gook; all they use is plain English. They will want to know what this particular recommendation means. It means that this house is asked to say it is in favour of more investigation. That is the first recommendation, or rather the first proposal. Pardon me, Mr. Speaker; these are proposals, not recommendations. The first proposal recommends or proposes more investigation. We are all in favour of more investigations. Investigation is a very fine thing, but it does not bring down the prices of bread and butter, and that is what the people are interested in.
The second proposal is that more funds be provided for the commissioner who is investigating combines. That is also a splendid thing; but when I return to Vancouver Centre, my friends will say to me, "Well, Rod Young, you have been to the House of Commons; what did you fellows down there do about prices?" I shall have to say to them, "We approved or we recommended or we proposed more funds 5849-3811
for the commissioner of combines investigation."
Section 3 states that it is difficult to apply formal action against profiteers, but we will consider doing something about it. Section 4 simply contradicts section 3. It states that the scarcities have been exploited by certain handlers and that if they are not punished-* presumably section 3 is not going to work-the program of import restrictions, which we know as the Abbott austerity policy, must be relaxed.
Section 5 is a good section, because it suggests taxes on unreasonable profits. As I said at the commencement of my remarks, I am unversed in parliamentary procedure and in officialese. What are unreasonable profits? According to the evidence given before the committee, which I have read, a businessman is in business to make profits. He is in business to buy cheaply and sell dearly. His prices are determined largely by supply and demand. He is never told that a certain profit is unreasonable while another profit is reasonable. There has never been such a definition. Now comes this proposal which is also gobbledy-gook.
Section 6 calls for a better accounting system, so that it will be easier for committees such as this to investigate conditions such as this, but it provides absolutely nothing for the man who must consider how far his wages must be stretched to meet rising prices and a reduction in his standard of living which comes as a consequence.
Section 7 provides another method for making investigations easier. I am hurrying because I do not want to delay the house.
Section 8 states that some controls are bad but that others are not bad. That leaves us exactly where we were before.
Section 9 refers to the government removing the special excise taxes, especially those that affect the housewife's kitchen. We hope; we expect; we recommend; the government may take into consideration, and so forth, but nothing is loft after all the verbiage is taken out, except the vague idea that there is a possible effort to deceive the public.
Section 10 says, We are opposed to the removal of rent controls, except some; some rent controls, but not all rent controls. What rent controls? How many rent controls? Where are they to be applied? Hon. members have imagination, as has been shown by the oratory, and they will have to use it when they peruse this item.
Section 11 makes some attempt to pass the buck of price controls in the future to the provinces.
Section 12 refers to a possible meat shortage. It is recommended that the government should
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Rodney Young: Do I hear some laughter?- is to inscribe across the Speaker's chair that there are few subjects which require more than twenty minutes of conversation on the part of anyone to cover. I think if the orators in this house had such an inscription facing them it would be much better for them and the country would gain greatly .thereby.


An hon. MEMBER:: The C.C.F. have no orators.


Rodney Young: It is suggested that the C.C.F. have no orators. Let me assure you, Mr. Speaker, and hon. members, that the C.C.F. orators have been speaking to such empty seats as I see around me for twenty, thirty, and forty years and, therefore, as orators they are not unnecessarily verbose. Certainly they cannot be compared with the orators that I see around me on the benches of the other parties.


John Ewen Sinclair: You have not heard your colleague, the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: Are you inviting me to make a speech?


John Ewen Sinclair: Any place, any time.


Rodney Young: I have promised to be brief, and I conclude on this note. Let me say this to hon. members. For once, take a humanitarian view of the situation and consider the
	-
people you represent. I would remind them that, while they may represent people who are in excellent circumstances economically, who receive salaries sufficient to take in the high prices of today, by far the majority of those whom they represent are the fathers and mothers of future Canadians, of the boys and girls who will make this country great and whose standard of living is suffering because of the high prices today. We have our duty to perform, and we should not be content, despite the weather, to go home until we have finished our job.


Mr. H. W. HERRIDGE (Kootenay West):: Mr. Speaker, when this debate commenced it was not my intention to speak, for I understood that two or three speakers were to present the views of the various parties and the debate would then conclude; but since it has continued at some length, and in view of some of the remarks which have been made, I have a few words to say.
When the appointment of the committee was being debated early in the session I expressed the opinion that such a committee was unnecessary, because the government had in the wartime prices and trade board and in the Combines Investigation Act all the machinery required to do the work the committee was being asked to do. I still hold that view. But now that the committee has sat, and I know its members have worked hard, although in the first instance it was not supposed to make recommendations, I am pleased to note that some recommendations have been brought before the house by the committee. That is something concrete at least for this house to discuss and to accept or reject.
I am not going to deal with the recommendations in detail. It is sufficient to say that, while they do not bring forward the ideas which many of us in this house have advocated in regard to over-all price control and subsidies, the recommendations, if given effect, will be of some benefit to the Canadian people. The very fact that these recommendations have been brought before the house by the committee is an indication that the government has its ear to the ground and is listening to some extent to the opinions of the Canadian people as expressed through many organizations, and as emphatically expressed during the recent by-elections. That is more than I can say for the Progressive Conservative party, which apparently never has its ear to the ground.
The recommendation concerning the taxation of unreasonable profits is a step in the right direction. The recommendation for

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more flexible rental control regulations is also a step in the right direction. While I am a supporter of rental controls, I do think, because of the inflexible nature of rent controls, many home owners are today suffering an injustice. Therefore, while the report is not all I could wish it to be, I intend to support it, because I believe it holds some germ of good which may bring forth fruit satisfactory to the Canadian people if the government takes immediate action-and that is the important point.
I wish to refer to the remark made by the hon. member for Kamloops (Mr. Fulton) that the C.C.F. was not the only party which had the welfare of the Canadian people at heart. He suggested that other parties had the people's welfare just as much at heart. In reply I would say that the C.C.F., in advocating price controls and subsidies, at least recognizes and attempts to reflect in this house the opinions of the Canadian people; for, as indicated by a recent Gallup poll, over seventy-four per cent of the Canadian people expressed a desire for the reimposition of price controls and certain subsidies on essential commodities. All the trade unions in Canada-all of them-have expressed a desire for the same thing. So have the co-operative organizations; so have women's organizations in large numbers. The Canadian Legion also, at its last annual convention, unanimously supported the resolution urging a rolling back of prices to the 1946 level, which would mean a restoration of price control.
Therefore I think the hon. member for Kamloops, in ignoring the wishes of the labour unions in his riding and of the co-operatives in his riding and of the women's organizations in his riding and of the branches of the Canadian Legion in his riding, all of whom have demanded the reimposition of price controls and subsidies on certain essential commodities, is the member who is living in a world of unreality, which I suggest, Mr. Speaker, will be dissolved in the next general election.
I say, too, that the party to which he belongs is living in a world of unreality. At this stage in the development of our social order, when people are looking forward to reforms and doing away with the iniquities of the past I say, and I say it in all kindliness because I believe they are sincere and fair in expressing their views, it is the party to which the hon. member for Kamloops belongs which is living in a world of unreality when it ignores the will of the people expressed so unanimously in favour of price controls and subsidies.
Similarly, when his party will also continue to oppose the imposition of the excess profits tax, will urge higher interest rates in this
country, and will defend the interests of the'1 grain exchange as against the interests of the Canadian wheat grower, it lives in a world of unreality. I admit the difficulties in regard to-price control in peacetime because of constitutional jurisdictions; but at least this report, with all its deficiencies, has attempted to make an approach to solving the problem, an approach which I think should be acceptable to all democratic interests concerned. It is not a negative report. It is a positive report, having in view the welfare of the Canadian people.
We are living in a changing world. I am one of those who believe that we are living in a world in which either we must have a measure of regulation and planning under capitalism, or we shall have chaos, and I am glad to note that this committee, and the government to the extent that they support the recommendations of the committee, recognize that either we must have some regulation of capitalism and some control of its worst features, or we shall have chaos. The report with all its limitations recognizes to some extent that fact. For the hon. member for Kamloops to talk of loss of freedom should this freely elected parliament act in the interests of the people in this direction is absurd in the extreme.


Edmund Davie Fulton: I never said any such thing. I am sure the hon. member does not want to leave a wrong impression.


Herbert Wilfred Herridge: I thought the hon. member definitely implied in his speech that the C.C.F. would work toward a loss of freedom.


Edmund Davie Fulton: What I did say was that the policy of over-all control advocated by the C.C.F. would result in a loss of freedom.


Herbert Wilfred Herridge: Quite correct. That is the very point. I say that a policy of over-all control effected through action by a freely elected parliament will never imperil the freedoms of the Canadian people. I mean to say that regulations which spring from a freely elected parliament of men and women, who have to return to the people for endorsation of their actions, can never result in a loss of freedom. Some measure of control, if given effect, will result from these limited recommendations. These limited recommendations are made in response to the demands of the Canadian people and a large number of organizations in the country. Therefore I repeat again, to consider action such as that as a loss of freedom is definitely absurd. Consequently, Mr. Speaker, I say I will support the committee's recommendations and hope that even this limited approach to the problem will result in some measure of immediate relief for the Canadian people.
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Mr.  J. M. MACD ON NELL@Muskoka-On'tario: Mr. Speaker, like some others here present, I was uncertain whether I should apeak on this; but, as the Irishman said to two people who were fighting, "Is this a private light or can anyone join in?" It seems to me that this has gone to the stage where one can feel free to join, and I should like to say a word or two. I see that my hon. friend, the Minister of National Health and Welfare (Mr. Martin) is looking at me with a pained expression.


Mr. MARTIN:: No; joyful.
Mr. MiACDONNELL (Muskoka-Ontario): I will assure him that I shall be as reasonably brief as the circumstances warrant. First of all, I should like to say a word or two about the rather odd occurrence of last week which I do not think contributed to the dignity of this house or to the dignity of some of the people in it. A week ago tonight, I think it was, we had this press report, this government by press release, if one may call it that. It prompted me to ask the Minister of Finance (Mr. Abbo'tt) a question, and it prompted him the following day to make this answer, which I think he must have given with some pain. He said as reported at page 5627 of Hansard:
It is most unusual for a minister of finance or any other minister either to confirm or to deny rumours of this kind. But in view of the widespread publicity which has been given to this rumour and the statement of my hon. friend I have no alternative but to say that the rumour is without foundation.
That was a nice position to put the Minister of Finance in, was it not? He had to say in this house last Tuesday that this rumour, which we now find out is perfectly true down to the last "i" and the crossing of the "t", was without foundation. That seems to me one of the extraneous and quite unnecessary circumstances which result from this way of doing business.
I also want to associate myself fully with what was said by the hon. member for Lake Centre (Mr. Diefenbaker), who said to the government that if things are to be done before the next parliament assembles the time to do them is now, and not after parliament prorogues. We in this part of the house still believe in the old-fashioned idea that parliament is the proper place in which to do the business of the country, not after parliament has prorogued when the government can do as it likes.
We remember the radio legislation of last November. It was said that it was not legislation. We were told that there was no tax. The only thing that happened was that they withheld your goods so that you could not

get them until you paid the tax which was not a tax. One fears inevitably that if people find it easy to put on a tax without parliament, they will find it even easier to take off the tax and do all the other things; because, after all, putting on a tax is the most serious thing that governments do. The government having done it by radio, we hardly know Where they may stop. Therefore we are naturally suspicious of this report, which is not a report of the committee at all, but is a kind of indirect way of announcing government policy.
I suggest also that the way in which this has been done will really make serious people wonder whether it is worthwhile sitting on committees again at all if they are to be treated in this manner. I suggest for a comparison the labour committee which met two years ago. Let us remember that this prices committee has melt scores of times. People have done enormous amounts of work. The labour committee met two years ago. As I recall it, that committee was allowed to work out its own recommendation. I would also refer to the banking and commerce committee, of which I am a member. True, ithe matters that oame before that committee are largely uncontroversial; but we did meet; we did discuss things; we did have chances to express views, and our views carried weight.
I wonder also whether the Minister of Finance, when he saw this press report, remembered what he had said in this house on May 18 last. I quote his words, which appear at page 4056 of Hansard:
Neither this government nor this parliament has either the political mandate or the constitutional power to maintain indefinitely in peacetime a strait-jacket of controls over prices, production and distribution. Our whole economy has been organized to operate on a price basis by private incentives and private initiatives, not by centralized direction.
I wonder also whether he might have remembered what the present Minister of Justice (Mr. Ilsley), then Minister of Finance, said in this house in April, 1946. I quote his words:
It is utterly impossible to maintain indefinitely real price controls. To begin with, we have got to get out of this field constitutionally some time. We have not the power to stay in this field indefinitely, and there must be a certain measure of decontrol.
I want to say that, as to the tenor of the report, the hon. member for Winnipeg South Centre (Mr. May,bank) spoke at considerable length. The first twenty-five or thirty minutes of that time consisted in 'an attempt to arraign the actions of the hon. member for Eglinton (Mr. Fleming), who is well capable of looking after himself, and the last few minutes consisted of some general remarks aibout the

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report. It seemed to me a kind of apology. He seemed to be saying that the report was a little dab of this and a little dab of that and did not really amount to anything. It reminded me of the story of the lady who had an unauthorized baby and said, "It was just a tiny little one." It seemed to me that he was doing nothing-


Paul Joseph James Martin: But it was a baby.


Mr. MACDONNELL (Muskoka-Ontario):: He seemed to be doing nothing except saying, "We would have a little control here and a little control there, a little subsidy here and a little subsidy there. I thought I detected the fine hand of the Prime Minister (Mr. Mackenzie King) there. I remembered the advice that he gave some little time ago to my leader when he said', at page 3939 of Hansard:
I give my hon. friend a word of counsel. It is always wise to try to anticipate all possibilities before they arise.
I would have thought that this report was in the Prime Minister's best style, ear to the ground, ready to move any way, making the best of all worlds, facing both ways, the little brother of the rich and the big brother of the poor. If there is one thing that the Prime Minister has succeeded in doing it is to create the impression somehow or another that he has been championing the poor against the rich. How he has done it I do not know. It is one of t'he things for which we all give him credit, at any rate for his dexterity.
But, now, in spite of these ambiguities, do not let us be uncertain about what happened. This is a move on the part of the government, or, at any rate, an attempt to create the appearance of a great move to the left. They have climbed into bed with the C.C.F. I do not know what kind of marriage it is, a marriage of convenience or perhaps even a companionate marriage. What will come of this unholy alliance I do not know; but it is interesting, at any rate, to consider its progress to date. It appears that at the witching hour, between midnight and one o'clock on Friday morning, the C.C.F. accepted the proposal. They signed up the marriage contract, but by Saturday apparently the bonds of wedlock were chafing. It might almost appear to be A. P. Herbert's "deadlock", because on Saturday we find that the C.C.F. were backing away from this; and what they will eventually do I do not know, whether they will say that half a loaf is better than no bread, but at any rate the marriage does not seem to be progressing very happily so far. I imagine we can take it that, on
balance, the C.C.F. will take what is given on account.
I want to take a very few minutes on this question of prices. It is so easy to allow our hearts to run away with our heads, and to refuse to think about this at all. It is easy to say that a lot of people want it and that, therefore, we must have it. I know a lot of people want it; but the question is whether the people who have been closest to it, tried to study it and know the most about it, think it will work. We would all like it. I would love to think we could have price control, and get everything down to the price where I could buy it and it would not do any harm. Of course I would like it, and I suggest that a great many of the seventy-four per cent, or whatever the figure was, of the people were really saying, "We want the prices down". Of course they want them down.
I want to look in a detached way if I can at the causes of high prices. There is no mystery about it. Some of them are the faults of the government and some are not.
I -hall try not to pretend that I think the government is at fault where I do not believe it is.
First of all, there are the gifts to Britain, which every man in this house approved. We gave hundreds of millions away because we thought our honour and interest demanded it, but we gave this money away and got nothing in return. That meant less goods for us, and in the meantime purchasing power was created. That is a cause.
Then, of course, the second cause is the enormous increase in the money supply, which has multiplied three times since 1939. Vast amounts of it went into goods that were destroyed during the war. We have three times as much money and nothing like three times as much goods. I will not take time to give the figures, but we have vastly less than three times as much goods and, I suspect, less than twice as much. And do not forget that the money is being freely spent.
Then we have the inflationary policy of the government, of which I have spoken in the house. I do not propose to take any more time in discussing that now. I wish, however, to mention particularly a matter that I have brought up before, and that is the colossal mistake made in the exaggerated, accelerated and, indeed, almost fantastic depreciation policy which was followed by the government, whereby in the last several years we have increased our productive capacity at a rate seven times as fast as they have been doing in the United States.
I come to another thing which is tremendously important and which I think we are
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inclined to overlook, and that is the desire for leisure. We all want leisure. I find to my amazement that city offices are closed on Saturday to a considerable extent. More and more leisure may be a good thing, though it would not do for me, because I am afraid I should get into mischief, as I have no doubt that some of my friends would, with too much leisure. Nevertheless we seem to have gone all-out for leisure. I am not saying whether it is a good thing or a bad thing; but it costs money; and if we want as much money or more, as we do, for doing much less work than before, then, as I say, it costs money and raises prices. The only people who have not so far been affected by that are the farmers, and in that connection I would say that we in the cities have been getting from the farmers, for a long time, too much for too little. We have been getting too much for too little for too long.
1 he farmers have not been getting proper prices and, now that their prices are more in line, we think it is an outrage. I believe this is a matter of tremendous importance. I have for long felt that if the farmers suddenly decided some fine day not to work any harder than we in the cities work, we would all starve. In this connection I have an interesting letter and I believe it will appeal to hon. members generally, regardless of party. It is from an intelligent farmer-


Mr. BRYCE:: They all are.
'Mr. MACDONNELL (Muskoka-Ontario):
I would go a long way with my hon. friend in that observation. One of the reasons the farmers work and do not hold back is the fact that they are working for themselves. They are capitalists. I have here a pamphlet called "The Scene", written by a man named Atkins, an intelligent man, because he is in my constituency and I have an idea that he will vote for me, though I believe he is a Liberal with a small "1", a tiny, microscopic "1". I should like to read a part of what he says; I suggest that it goes to the very root of the whole matter, and all hon. members, particularly those representing farmers, might well listen. I quote:
There will be no milk, no eggs, no pork, no grain, no vegetables, no mutton or lamb, and only half as much beef as formerly, for sale'from Shingwauk farm in the 1948-49 crop year- but Shingwauk farm will be on the 40-hour week Although there will be no profit, there will be less loss; and we are now privileged to glow with that false sense of social virtue which possesses those who reduce their hours of work.
Further on, he says, and I suggest that this is a matter for all of us to think about carefully:
All the groups which banded together to get more for less-

That is what we have all done; do not let us forget that. All we city people are getting as much or probably more for less. We are getting as much money as we got before for less work. But to continue the quotation:
All the groups which banded together to get more for less have placed an unbearable burden of long hours and unprofitable work upon most of the farm people. The load placed upon Canadian farmers, whose average age is far above their physical prime, cannot long continue to be borne by the present producers of the food that Canada needs for domestic consumption and for exchange for the products of Canada's food customers. Before long the problems of food supply will be the most important political issues domestically and internationally.
I believe everyone within the sound of my voice will agree with that.


Mr. IRAINE:: Will the hon. member say whether there is any way he knows of by which profits can be made unless somebody gets more for less?


James MacKerras Macdonnell: Yes. I would answer that by saying that under a free system you do not get more for less but you get more when you produce more, and a great deal more. I do not think profits mean getting more for less; they mean getting more for more of what is produced.


An hon. MEMBER:: What did Canada Packers get?


James MacKerras Macdonnell: I am not offering any comments on leisure, whether it is good or bad, but I am repeating that it costs money and this finds its way into the cost of living. We need not pretend that it does not. I have outlined the farmers' position and, I repeat, they have been getting too little for too long.
The next reason I should like to mention is taxation, and reference has already been made to that. I will not do more than refer to it casually. We all know the enormous amounts of taxation that we pay, and the hon. member for Peace River (Mr. Low) spoke very well on that point this afternoon.
There is another thing I would mention. It is rather delicate to mention it, but I will do so just the same. We do not work as hard as we used to, even when we do work. That,
I believe, is true of a great many people. From the huge amounts of money created during the war we have got the idea that money and value do not depend directly upon work, that you can escape work and still get money in some way. That this feeling prevails is true, I believe, and I am not going to discriminate as between this one and the other. It is not confined to any section of the community. A

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young man goes into an office, a vigorous young man, and he hears, "Don't work too hard".
The next point I would touch upon is profiteering. I expect there is profiteering, though not nearly as much as some people believe; that is, people who are too fond of witch hunting. I believe that if the most extravagant critic of the capitalistic system in this house, provided that he were a reasonable man-and there are such men in this house- were to total up all the profits he considered excessive and to divide them over the cost of living he would find that it was but a fleabite, something infinitesimal. I believe that with all my heart.
Then, of course, there is the thing that has been mentioned here, reduction of supply, particularly of food, because of controls. I do not need to tell the farmers about that. They know all about it.
I am not suggesting that this can all be put upon the government. Quite a lot of it can, and the government should act. My hon. friend the member for Eglinton has pointed out how they should act. But a great deal of it does not depend upon them; it depends upon ourselves.
Let me reiterate for a moment what in my opinion the government can do. It can do, months late, what we on this side of the house- I believe, all on this side of the house-told them last December and January that they should do, when we pointed out to them that they ought not have put on these taxes. In their hearts they did not like them, but they got involved and they just put on the taxes. Then the hon. member for Eglinton pointed out again what we said at the time of the budget, that some relief should be given to people in the low-income group.
But I do not want to leave it there entirely; I want to come back to remedies which are in our own hands, because I do not think we want to leave it all to the government. We can do a great deal ourselves with a measure of self-discipline. Consumers can do a great deal by themselves. I do not want to be personal, but in my own family wre do not buy nearly as much high-priced meat as we used to. Some hon. members may say I am not a very good advertisement for the result; but, believe it or not, I have put on a pound or two.
There is another thing we people in the cities can do; I do not apply this to farm people at all. We can work harder; and if we work harder we shall have more goods and prices will come down. There is no mystery about prices.
But these remedies I have given, which we may apply ourselves, are awfully unattractive. No one wants to believe that a thing is his own fault, or that there is anything he can do about it. He wants to have some outside mechanism come in and do it all for him; and that is why controls are so popular. People think it can be all done by controls; and my hon. friend to the left, who spoke so well, pleaded that we should take a humanitarian view. I do not think it is taking a humanitarian view to refuse to think, or to suggest to people remedies you know will never work. I believe that is a cruel thing. I think it is cruel to suggest to the people remedies which will turn out to be no remedies at all.
Controls are terribly attractive. In the first place, they relieve us from doing anything ourselves. In the second place, and this is important, they make us feel that we are going to punish somebody. We feel that someone else is being naughty, and we are going to punish him. That is why people stumble into this sort of thing. Have they ever had this view from anyone who has had experience in controls and their exercise? I Shall, however, come to that later.
Of course we are all tired to death of hearing the record of controls during the war. On the whole it is a good record, though we must remember that part of it was quite illusory, because the low prices were supported by subsidies amounting to hundreds of millions of dollars. So we were paying out of one pocket what we saved for the other. Nevertheless I must admit that, in wartime, controls worked pretty well, and the government did a pretty good job. But can anyone point to any democratic country where, except under war emergency or its equivalent, that "comprehensive system of controls" advocated the other day iby the 'hon. member for Cariboo (Mr. Irvine) has ever worked in peacetime? In England they have an emergency now far greater than in wartime; but even there the controls are creaking and crumbling; and the desperate difficulty they are in, in my opinion and in the opinion of the people much wiser than I, is at least partly due to the unwise application of controls. The newspaper I often quote, The Economist, is very wise, I think, in not putting all the blame on labour. If I remember rightly, the other day it said one of the difficulties in England was that capital and labour are both doing themselves pretty well, by which it meant that neither was stretching itself as much as it might.
My next point is this. I can understand people asking for controls; but I cannot understand people asking for controls and at
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the same time saying they will not have wage controls. To me that just does not click; it does not make sense. I do not understand how any reasonable man can say that; yet it is my understanding that this is just what many people who are advocating controls do say.
Now we come along to this wonderful phrase, "rolling back prices," which has a kind otf biblical sound, like rolling back the soroll of the heavens, like Joshua making the sun stand still, though it was only for an hour. We have the demand to roll back prices. It sounds grand. "Roll the old chariot along"; I think there is an old song to that effect. Let us have a look at this rolling back of prices. Let us hear the word of a man who knows something about it, a man who had) the job and did it well, Mr. K. W. Taylor. At page 87 of the proceedings of the prices committee he was asked, "How about rolling back butter prices to the level of 1946? In your opinion what would be the result?" And his reply was: "Complete chaos." Those were the words of Mr. Taylor, who was head of the prices board and who now is one of the assistant deputy ministers of finance. So there is the opinion of a man who has been working on this very thing. He has seen both sides. He is a sensible man. He knows more about it than any of the rest of us, and that is what he says. I think it is reasonable to ask the opinion of men of that kind.
I go further and say I do not think it is possible to adduce evidence of a single country which has had experience in the administration of these controls to show that we should have a comprehensive system of controls reimposed, which is what is being asked. I repeat that they 'have never worked in a democratic country in peacetime. It is a matter of common knowledge that when they were taken off officially in the United States, actually they were off already. The thing had1 become a joke; people just would not accept it, and partly at any rate they took off controls because they were practically off already. For us to suggest now that we are going to retrace our steps and impose over-all controls is just not reasonable. "Hypocrisy" is a nasty word and I shall not use it, but I just say that is a bit of the most utter unrealism I could possibly think of.
But do not take my view; do not even take the view of anyone who shares my opinions. Let us come to a witness who, I think, will be accepted by hon. gentlemen to the left. This instance has been mentioned already by the hon. member for Lake Centre; therefore I can pass over it quickly. Let us come to the

government of Saskatchewan and the instance we were given this afternoon of the fact that they had an act to enable them to control prices, which act they did not use. It was on the statute books for a year. That is where it should be; because after all, it is a purely provincial matter; but the act was allowed to lapse. Why did they not use it out there? The reason is simple. That is a province of farmers, people who are interested in getting good prices for their food products. But it was food prices that caused much of the trouble in Vancouver Centre, in Oshawa and elsewhere. So there you have a case of making the best of both worlds. We had the C.C.F. profiting-and I am not going to be too critical of them-from stressing inflated food prices in the industrial constituencies, and at the same time refraining from price control in Saskatchewan itself, for the obvious reason I have given. So I say it is a travesty to have a political party demanding in Ottawa, where they have no power, what they will not do in Saskatchewan, where they have the power.
I say that controls are not the answer, that controls will make confusion worse confounded. If I believed controls would do the job I would try to bring myself to accept them, even believing as I do that they would grievously hamper our freedom. But I am saved that, because I am perfectly satisfied that they will not work.
What is the answer, then? Well, I have really covered most of the things I wanted to say. The answer is to remove these absurd austerity taxes which never should have been imposed; which, as we have been reminded, we actually defeated in committee at one stage, though the defeat did not stick. Halt the various inflationary measures. These are the things government can do; but, as I said before, I am not going to put it all on the government, though there is a great deal the government should do now, without waiting for it to be done as a Christmas present after the convention in August, which I am very much afraid will be the case.
On the other hand, there should be harder work and more self-discipline on the part of people individually. If it would not sound like introducing sentiment at the end of a speech which certainly has not had much sentiment in it, I would say this. There was running through my mind this morning a jingle I remember seeing once in the army, where, as a matter of fact, many of us learned to work together in a way we have sometimes forgotten since. I am not sure that the idea expressed in this jingle has not a great deal

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to do with it. I thought it was by Kipling, but today I find it is not. I want to close with these words, because they indicate the kind of co-operation and working together which is necessary, along with all the things the government can do, instead of these precious controls which will not work:
It ain't the individual, nor the army as a whole;
But the everlastin' teamwork of every [DOT]bloomin' soul.
I suggest that is what we want, rather than witch hunts, together with the measures the government can take.


William Irvine: Before the hon. gentleman takes his seat, I should like to ask him one question. I asked a minute ago if there was any possibility of making profit unless one got more for less. The hon. member replied that he believed profit could be made by making more for more. I do not wish to interrupt him in his remarks, because I have no desire to put him off his train of thought; but I ask him this question now: If more for less does not balance, and if more for more balances, how can you make a profit?


James MacKerras Macdonnell: The hon. member for Vancouver Centre spoke about abstruse calculations and abstruse statements. I am not sure I quite followed the way in which the hon. member for Cariboo has asked his question. However I shall try to answer it. I think it is perfectly clear; but in the first place I have to go back and say this, that I think the hon. member for Cariboo has a feeling that profit, in itself, is a bad thing. I would recommend to him a little book written by Mr. A. D. Lindsay, a man far to the left in politics, called "Christianity and Economics" in which he points out that the idea, that profit somehow is immoral, is bunk. He asks this: Why should a man be criticized for seeking an uncertain profit, when at the same time the man is not criticized who seeks quite properly to increase his certain wages? He asks why one man should be criticized and the other applauded.
I now come back to the question. My point is this, that to have anything approaching a free system the person who makes money does so only because he manufactures the goods that the public wishes to buy at prices which they can pay; and that he can make a profit only if he has a large operation; because the hon. member, having been in the prices committee will know much better than I do the very large and inescapable overhead which permits anyone to operate a business.
That is what I mean by saying that he can only get more for more, and not more for less.


Mr. F. S. ZAPLITNY (Dauphin):: Mr. Speaker, this will probably be the last opportunity we shall have this session to speak of this all-important question of prices. I wish to take a few minutes to try to trace clearly what happened in the house, so far as prices are concerned, and the legislation dealing with prices in the past few sessions.
In order not to go through the welter of words we have heard recently, particularly from hon. members to my right, including the hon. member who has just spoken-


James MacKerras Macdonnell: Those are harsh words.


Frederick Samuel Zaplitny: -I wish to refer, first of all, to the two hon. members who mentioned Saskatchewan, and who seemed to try to make quite a bit of the fact that in that province there was certain legislation passed, authorizing the government to impose certain controls, but which legislation was not used.
I believe they will understand, if they will think for one moment, that in a country like ours, or indeed in any country, it is not possible for one province in the whole economy to control prices within that province. I need hardly explain to hon. members that there are no customs duties from province to province, and no boundary lines so far as trade is concerned. Trade freely crosses provincial boundaries. You cannot control the prices of one province in the country. The hon. member knows that as well as I do.
I wish to refer to page 689 of Votes and Proceedings, for Friday, June 25, in which the committee says:
The committee is therefore forced to the conclusion that the solution of the problem of the adequate protection of the Canadian consumer will require the co-operation of the provincial governments with the federal government bytaking the measures required in meeting their responsibilities.
What does that mean? It means that if any doubt arises as to whether the federal government alone has the constitutional power to continue to impose price controls-


Mr. LESAGE:: The hon. member says he does not understand the clause. May I ask him if he ever read the Canadian constitution?


Frederick Samuel Zaplitny: What clause?


Joseph Arthur Lesage: The clause he mentions. He says he does not understand one of the resolutions about the rights of the provinces.
Mr. ZAiPLITNY: I did not say that at all.
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Joseph Arthur Lesage: Did he ever read the constitution?


Frederick Samuel Zaplitny: I have read the constitution. The hon. member was not listening to what I said. I have quoted the recommendation of the committee. If the hon. member will refer to page 687 of the committee's report he will find in paragraph 11 the part I have read, and that it is exactly what I quoted.
Let me continue to say that the reason for that recommendation is that if doubt should arise as to whether the federal government has the power constitutionally to impose or to continue price controls by itself, it is asking the co-operation of the various provincial governments in carrying out that objective.
The province of Saskatchewan, being aware of that situation, showed its willingness to co-operate by placing on its statute books enabling legislation making it possible for that province to co-operate with the federal government, if the government were to continue its policy of price controls. That legislation remained there for a year, as the hon. member has said, giving other provincial governments the opportunity to pass similar legislation to show their willingness to co-operate with the federal government in carrying out the further system of price control, should the constitutional issue be raised.
But what did the other provinces do? In spite of the cynicism expressed by some hon. members to my right about Saskatchewan, why did they not tell us what the other provinces did? Did Ontario pass similar legislation? Did Quebec pass similar legislation? Did any other province pass it? I should like to tell the house what Premier Garson had to say on January 24, when he spoke to the Liberal association in AA7innipeg. His contribution to this end was in these words:
In a free country, to impose wartime controls tage of the special conditions existing, made unprecedented profits.
You can take whatever meaning you wish out of that. That was his total contribution to the question of price controls.
I wish to turn now to the remarks of the hon. member for Muskoka-Ontario (Mr. Mac-donnell) in connection with farming. I am glad to hear that he has had some kind things to say about the farmers. As one who represents a rural constituency, I am always happy to hear anyone say something in defence of the farmers, because I know they have often been the greatest victims of profiteering in the past. But I would remind the hon. member that he is the one who, on two occasions in the house, has proposed a solution of our

inflationary problems in terms of higher interest rates. I wish to inform him, in case he does not know it, that if there ever were a curse upon the heads of farmers in western Canada particularly, it has been high interest rates. Very few members will thank him for that.


James MacKerras Macdonnell: AA'ouild the hon. member permit a question? The hon. member knows that I have not advocated high interest rates; but that I made the statement, which I repeat, that artificially low interest rates produce artificially high prices. And I ask him this question: AVould a farmer prefer to pay one half of one per cent a year on a loan of $1,000, which would cost him $5, or would he prefer to pay $5 a week in extra living costs, due to an inflationary policy?


Frederick Samuel Zaplitny: Of course that is beside the point.


Some hon. MEMBERS:: Oh, oh.


Frederick Samuel Zaplitny: AY ell, hon. members may laugh if they wish. But if any of them can interpret what the hon. member has just said, then I should like to hear it. It does not answer the statement I have made.
I have said that the 'hon. member for Muskoka-Ontario .proposed in the house on two occasions that higher interest rates would be a solution, of the problem of inflation. He has not denied that; he has only qualified it by giving his reasons for making that proposal. Nevertheless the proposal was made. I do not know if it was made on behalf of the party for which he is the financial critic, but I do know he made the proposal.
I wish to inform him that the farmers of Canada have suffered more from high interest-rates, and particularly during the years of depression, than from any other single factor in our economy. If he is to come to the defence of the farmers, then he had better revise his opinions about interest rates.
The hon. member went on to say that to talk about profiteering was ridiculous. He intimated -that there might be a little profiteering, but that it was a mere fleabite-I think that was his expression.


James MacKerras Macdonnell: I said I would be prepared to take your opinion-


Frederick Samuel Zaplitny: He may take not only my opinion-


James MacKerras Macdonnell: -after investigating the facts.


Frederick Samuel Zaplitny: -but I will back it up. He described the profiteering as a fleabite.

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I wish to quote from a labour report published not long ago, in which it is said that Canadian corporations made a net profit of $61 out of every man, woman and child in the country during 1946, as compared with $31 per capita for 1938. That is quite a substantial fleabite. Further on, it says that the increase in gross profits in this country was $3,059 million in that same year. During the same period the real wages of the workers and farmers and the salaried people of Canada dropped by eight per cent. If that is a fleabite, I should like to know what would have happened if-


Donald Methuen Fleming: Who wrote that?


Frederick Samuel Zaplitny: That was a labour report to be found in the Labour Gazette of recent date. I am sorry that I have not the exact date.


Mr. MERRITT:: An official or private report?


Frederick Samuel Zaplitny: I believe it comes from the Labour Gazette.


Maurice Hartt: If it comes from the Labour Gazette, they made a terrible mistake.


Frederick Samuel Zaplitny: There have been worse mistakes made by the government.


Maurice Hartt: That is all right, but Canada is still prosperous.


Frederick Samuel Zaplitny: Coming back to this question of profiteering-


Donald Methuen Fleming: Wild the hon. member be good enough to give us that reference when he has it?


Frederick Samuel Zaplitny: I shall be glad to give the reference. Coming back to the report of the prices committee on profiteering, we find on page 686 the following words:
In its investigations the committee found that, in certain instances, opportunists, taking advantage of the special conditions existing, made unprecedented profits.
LTnprecedented profits in these years must be high profits, because profits have been high for a considerable period of time. The report goes on to say:
There is no doubt that the high prices tnat produced these profits did raise the cost of living at that time.
In many cases those profits are still going up and the cost of living is still going up, so to say that profiteering does not exist or that it exists only to the extent of a fleabite, is, I think, understating the case to the nth degree.
Listening to the hon. member for Lake Centre (Mr. Diefenbaker), I must confess that I was unable to decide just where he stood
on the question of price control. He was castigating the government, and effectively, for their lack of action, but what that action was to be was hard to understand. I think there is good reason why he did not state clearly what the government should do. The official stand of the Progressive Conservative party on inflation and prices is exactly that of the {Liberal government which is in power.


Donald Methuen Fleming: Nonsense.


Frederick Samuel Zaplitny: The hon. member for Eglinton says "nonsense", and he is an authority on that subject. On October 9, 1946, the following item appeared in the Winnipeg Tribune, reporting a speech by the leader of the opposition (Mr. Bracken). The hon. gentleman is now in the house, and he may correct me if what I say is wrong. This item reads:
. . . Mr. Miller's election will have no effect whatever on government controls because his views, stated on every platform, are in entire accord with the government's stated plan.
The hon. member said that the election of a Conservative candidate would not alter in any way the government's price control policy. Then later, in the October 18, 1946, issue of the Portage la Prairie Graphic-


John Bracken: If the hon. member is going to quote my words, he should not put on them an interpretation that they do not bear. His first statement was correct, but his interpretation of that statement was wrong.
Mr. ZAPLITNY': I shall now read the words of the candidate himself, which might be a more accurate interpretation of the opinion of the leader of the opposition. This is what the candidate himself had to say, as quoted in the paper I have just mentioned:
Mr. Miller emphasized there was no difference between the Liberals and Progressive Conservatives on price control and inflation.


Donald Methuen Fleming: Will the hon. member state why it was that this report had the concurring support of the C.C.F. members of the prices committee as well as of the government members, but was voted against by the Progressive Conservative members of the committee?


Frederick Samuel Zaplitny: Probably the reason is that the report suggested a cut in taxation.


Donald Methuen Fleming: No. Give us an answer.


Frederick Samuel Zaplitny: You asked for it and you must be satisfied. The point I want to emphasize is that, while the hon. member for Lake Centre was most sharp-tongued in his castigation of the government; while he was shooting darts across to his left about the stand taken by this party, he did not propose anything
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that would be a solution of the present cost of living. We have yet to hear from the official opposition in this house what they would propose in the place of this report or in place of what the CC.F. proposes in order to solve the high cost of living.


Donald Methuen Fleming: Read our amendment.


Frederick Samuel Zaplitny: I suggest to the hon. member that he make his own speech.


Donald Methuen Fleming: Was the hon. member in the house on Saturday?


Frederick Samuel Zaplitny: I have heard a lot of speeches by the hon. member for Eglinton, and if he can make another one explaining all those he has made he will not need to ask all these questions. I said a moment ago that one reason why the Progressive Conservatives may have opposed the adoption of this report is that it suggests a cut in taxation. They groaned when I said that, as though to indicate that I was being unfair. What happened in this house just a month or so ago? When this group moved an amendment to the budget asking that the excise tax be abolished, that the exemptions on income tax be raised, the Progressive Conservative party joined the government in voting it down. That was one time when they were in the same boat.


Donald Methuen Fleming: Surely the hon. member is not going to make that statement in the house when he knows it is not correct. He knows that amendment also contained a proposal that all investment in Canada be socialized. He did not state that.


Frederick Samuel Zaplitny: The amendment to which the hon. member refers did not contain the word "socialization" in any way. It is too late now for a death-bed repentance. The hon. member voted against a reduction in taxation and he cannot talk himself out of it. I would point out to him that he does not have to take my opinion on this. He should remember that when the by-election in Portage la Prairie took place it was won by the Progressive Conservative party under false pretences. They stated that their stand on price control was exactly the same as that of the government, and then a few weeks afterwards they got on the radio and stated that they were opposing price control.


John George Diefenbaker: Whom do .you mean by "they"?


Frederick Samuel Zaplitny: The Progressive Conservative party. We certainly heard plenty about it this afternoon. Hon. members know what happened later on when the public finally caught on to the stand taken by the Progressive Conservative party. Recent by-elec-

tions came along and they were not able to put over the double role they had been playing. They found that they were not able to live up to it. They could not in one breath be for price control and in the next breath be against it. In one breath they are for a reduction of taxation in this house and then they vote against a reduction of taxation.


Donald Methuen Fleming: That is untrue and the hon. member knows it.


Frederick Samuel Zaplitny: If the hon. member will look at the record he will see that he was one of those who voted against a reduction in taxation.


Donald Methuen Fleming: On a question of privilege-


Some hon. MEMBERS:: Order.


The ACTING SPEAKER (Mr. Golding):: Hon. members should not continually interrupt the speaker. They should permit him to make his speech, as is his right and privilege.


Donald Methuen Fleming: On a question of privilege, the hon. member has made a statement that I voted against a reduction of taxation. That is utterly untrue; it is just as untrue as it possibly can be.


Frederick Samuel Zaplitny: The hon. member can say what he likes, but if he looks at the record he will find his name among those who voted against our amendment.


Donald Methuen Fleming: Your amendment dealt with matters outside of taxation.


Frederick Samuel Zaplitny: It had the reduction of taxation in it, and the hon. member voted against it. I am not talking politics. I was referring to the record and making certain statements which are absolutely correct, but which perhaps hurt the conscience, if nothing else, of hon. members to my right.
In 1946 the hon. member for Qu'Appelle (Mrs. Strum) moved the following amendment in this house:
This house is of the opinion that the government's policies of permitting recent unjustifiable increases in the prices of farm machinery and of steel have resulted in imposing on food producers and workers of Canada an unfair share of the burden of maintaining the government's price stabilization policies.
That is clear-cut enough. But what did our so-called champions to my right, who shed crocodile tears for agriculture, do? Every member of the Progressive Conservative party voted against that amendment. Let them deny it. I do not hear a single voice. Try to wiggle your way out of that. You cannot do so.
In this group during the past three months we have consistently-

Report oj Prices Committee


Donald Methuen Fleming: Talked nonsense.


Frederick Samuel Zaplitny: 
John Bracken: should be generally condemned when, as a matter of fact, only certain small sections of business have been proved to be guilty of so-called profiteering, if I may use the word, which would stand a lot of definition. One other observation with respect to these comments. One section of the report deals with matters which I understand were never before the committee at all.
We have this statement in the findings, if I may summarize it. It says that the significant causes of the rise in prices are four: first, the rise in external prices, the rise in prices outside this country; second, increases in the cost of producing certain goods; third, the expansion of purchasing power, and fourth, certain supplementary factors, which I presume include so-called profiteering. I shall touch briefly on these findings in a minute or two.
Nearly half of the so-called conclusions published in the report under fourteen different headings are criticisms of government policy in Which many sections of this house have taken part and are in substantial agreement, and in which I am sure many of those sitting to your right, Mr. Speaker, are in agreement as well. One-quarter of these findings are vague and, to-some extent, meaningless. They have been gone over by others. Several speakers have taken them one after the other and discussed them. I therefore do not propose to do that.
The third group of conclusions was referred to by the hon. member for Vancouver-Burrard (Mr. Merritt) as being the ash-can- group of conclusion-recommendations which leave loopholes and possible delays for the government to follow or not to follow in dealing with this important matter.
With respect to the report itself, my first observation is that it is a most inadequate document, presuming to deal with what is perhaps the major economic question facing this country today. The committee was appointed to find the causes of these rising prices, and yet not the slightest attempt was made to examine the effect of the government's policies on these rising prices. We tried to have that as a requirement of the committee. By your ruling, Mr. Speaker, that was not allowed. In dealing with this problem, the effect of government policies during recent months and years was practically left out of consideration by the committee; government policies relating to taxation, to expenditures, to trade, to currency and credit were practically not considered at all. The objectives of the committee, and I think many of us think the objectives of the government, seem

to be to find some whipping-boy, some scapegoat on whom they can lay the blame for these unfortunate conditions in our economy.
Before I sit down I propose to show that the major blame for this price condition rests on government policies chiefly. The effort has seemed to be to leave the impression that somebody else was to blame for this condition. When we have a situation of this kind, such effects as these have some causes. Providence did not give us this price situation. In their individual or in their collective capacities, man gave it to us-perhaps nations helped. As I said, wherever there is such an effect there is a cause.
What is the cause of rising prices?. It is the situation where the Supply of goods is out of relationship to the supply of credit or currency. One can say that the remedy is to increase the supply of goods or to reduce credit or currency. I suggest that under these conditions our hands are tied. If we start out to try to reduce the credit or currency available here, what will happen to our national income? What will happen to our wage level? What will happen to our capacity to pay our debts? Nothing but harm. Therefore it leaves us with the other alternative of finding a way to increase production. I propose to deal with these matters in a little more detail later on.
But what I want to say now is this. This high price situation did not come about by accident; it had causes. What are these causes? That is what the people of Canada want to know, and how the condition can be remedied, nothing else. It is natural that those who are in positions of responsibility should try to leave the impression that others are to blame. But what we have to try to do is to find out what are the real causes and what are the best remedies that we can follow from now on.
In the report, four or five things are mentioned as being the chief contributing causes to this condition. One of them is foreign prices. No doubt the rise in prices elsewhere has been a factor; but I suggest., with all respect, that it has not been a major factor in the rise of prices in Canada. Another suggestion is that certain companies have sold their goods for what somebody was willing to pay; that the prices they received were considerably more than what they had paid and that profits were made. No doubt that has been true. Whether that is to be regarded as profiteering is a matter for examination.
I want to ask the house, is the man who today has some cattle on his farm to be regarded as a profiteer if he holds them off for a few weeks, in view of the fact that the

Report oj Prices Committee
government of Canada is reported as likely to remove the embargo on cattle going to the United States? Is the man who grew oats and barley a year or two ago, and, on learning that the government was likely to remove the price ceiling on these commodities, to be regarded as a profiteer if he held his oats and barley until the government made its move and the price went up 50 per cent? Is he to be regarded as a profiteer who, under conditions where dominion policies increased the supply of currency and credit far beyond the supply of goods, thus ensuring a rise in prices, takes advantage of that situation? I am not answering that question; I am just raising it. If every such man is to be regarded as a profiteer I ask, who in Canada is innocent?
No doubt, profits have been made. Profits could not help but be made under conditions of inflation, where prices were sure to rise. The government had the alternative of trying to see that commodities equalled the amount of currency and credit or of bringing in and maintaining, if it could, an over-all policy of control.
The government has stated its position and we have stated ours. There is the constitutional aspect. There is also an economic aspect. Practically everyone today thinks that, under these conditions, that over-all kind of control policy could not be carried out, and would not produce results if it were, without wage controls. And if we have price controls and wage controls we must tell every worker where he has to work and how much he can get for what he does, as well as what will happen if he does not do what he is told. It is generally recognized now that such an over-all system would lead to communism, the one thing that nearly everyone in Canada is afraid of.
Certain evidence is brought forward to leave the impression that great profits were made. No one denies that profits were made. Everyone who had any physical goods found that their value went up, just as if prices were to go down they would lose. Prices went up and many made profits, and if prices went down they would lose. But certain evidence was brought forward, and I will give one item as an illustration. It is said that cocoa beans increased in price 283 per cent. I have not checked it, but I have no doubt that is the fact. But what is the bearing of that on the cost of living? I am told only that 1-6 ounces of this commodity is used by the average family in Canada each week, so that even if that statement represents a fact, which I do not question, it has little bearing on the practical question of how to control prices
that are 50 per cent higher than they were before the war; wholesale prices double what they were before the war.
The question of butter has been raised. Does anybody here question that, so far as butter is concerned, its costs have risen rapidly under recent conditions? If anyone doubts that suggestion, then I think he should look at the situation today. We have a price ceiling on butter and I suggest that we ask ourselves this question. With that price ceiling, is anybody in Canada at this time of the year, when production is high, going to buy butter at a fixed price and pay the storage and then be subject to a fixed price later on? That has been the common practice in normal times, because butter is produced in the summertime in larger quantities than in the winter. It looks as though now, under existing circumstances, there will be less butter next winter than there was last.
That, I suggest, will be a most unfortunate situation in view of the controversy between butter producers and those who would bring oleomargarine into the country. If we run into a further difficult situation in regard to butter next winter, part of the blame will lie on those who have put butter in the position it occupies today.
Two or three other things were said by the committee, one of which was that increases in cost of production were a cause of rising prices. Certainly they were; but what we want to know is, what contributed to the increased cost of production? We know some things that did so contribute; but what we do not know, and what the committee has not examined, is the result of government policies on the increasing costs of production. That, the committee has not reported upon, and that, the committee should have reported upon.
The report suggested that another cause of rising prices is increased purchasing power. That, too, is correct, but what contributed to the increased purchasing power? Some factors that contributed to it were laudable, things that we all want. Some other factors may not have been so laudable. What part had government policy in increasing purchasing power, and to what extent can it be justified? That, the committee did not answer; that, the committee should have answered.
Then the impression is left that the work of the committee, the examinations that took place under it, have struck terror into the hearts of businessmen, and that, because of that, good has been done and will continue to be done. That self-praise, in the face of the facts, is a poor recommendation for the committee.
Report of Prices Committee

What has been happening since the committee has been at work? The cost of living has gone up. and I venture the prediction that it has not stopped going up. Today, it is at 153-3, higher than we have ever before known it, higher than it was after the first war, during which, as someone said this afternoon, we did not have the controls we had in this second war, and certainly did not have the experience of a previous war, as we had in the last war.
What I wish to do today is to examine the effect of government policy on rising prices and to assess the degree of that effect; because frankly, in my judgment, government policy has had more to do with rising prices than all other factors put together, and yet it has not been examined by this committee.
On February 2 last I warned the government that Canada was facing the greatest economic problems the country had ever before been called upon to face. I predicted then that, because of the government's refusal to take effective action, the cost of living would increase beyond levels reached in the disastrous inflation of the nineteen-twenties. Events hnve now justified these warnings.
Prices in Canada now stand at by far the highest level in our history. The general cost of living index stands at 153-3, the clothing index at 173-6 and the food index at 191-6, nearly double pre-war, and still rising. And even these official indices, which are based on a subsistence standard of living and in many respects are not fair, do not reflect the actual burden borne by the average Canadian family.
The true position is more nearly reflected in the wholesale price index which, when computed on the same basis as the cost of living index, now stands, not at 153 but at 220. On this basis the average price of all commodities is well over twice the pre-war figure.
People are facing a situation in which it is becoming increasingly difficult to provide for themselves the necessities of life. I mentioned the wholesale price index, because we commonly quote the other figure. One is 153 and the other is 220. For this rise in prices the blame lies largely at the door of the government.
The government cannot excuse itself by saying that we are suffering from the aftermath of war. Of course the war created problems; but the people of Canada pay, in their heavy taxes, the expensive price of government in order to have these problems faced and overcome. Yet at almost every stage the policies of the government have heightened inflation and increased the burdens of the people.

The sole action taken by the government has been to appoint a committee of parliament to inquire into the cause of the rise in prices. This was sheer evasion and subterfuge. Everyone in Canada who had studied the matter knew why prices were rising. We had too little consumer goods. Why? Because the government encouraged reckless capital goods purchases in the United States; because they needlessly imposed embargoes on foods and goods from sterling area countries; and because they maintained at a high level a most regressive system of indirect taxes, such as the excise tax and the sales tax. Our dollar is worth only sixty cents, or perhaps only fifty cents, because the government doubled the money supply in comparison with the goods the nation produced, and because so much government expenditure was made on borrowed money, money borrowed by the government from the banks and not wholly from the public.
These are among the real causes of our inflation. The government alone is responsible for them and their ill consequences upon the people; and it has done its discreditable best to conceal what it did. Vagueness and confusion exist all through this country. There has not been the frank analysis of this situation that there should have been.
Let us look at the government's taxation system. What is the position? Before the war we spent $500 million a year. In the middle of the war we spent six times that, or around $3,000 million a year. What has happened since the war? Even in the present budget we are spending $2,700 million. The government increased our taxes by 500 per cent; then they reduced them by ten per cent. That is not the worst of it; there are two features which are particularly bad, not only the heavy burden but the proportion the government takes of all we make. Before the war this government took from the people of Canada ten per cent of all that everybody made. That is what the cost of government took from the pockets of the people. Now they are taking over twenty per cent of all everyone makes. If this keeps on in this country we shall foe in the position of trying to bring prosperity by each taking in the other's washing; when what we need is more instead of fewer people at productive work.
Canadian taxation is characterized by two features: 'taxation which bears unequally upon the poor, and taxation which taxes people when they do not know it. I refer to such indirect taxes as the excise and sales taxes. I am not suggesting that they could all be taken off. But those hidden taxes take out of the pockets of -the people of Canada $1,000

Report oj Pnces Committee
million that they do not know about. These taxes fall directly upon production', unlike other taxes which are imposed after the money is made. They increase the cost of living. They force down living standards. They hamper enterprise and restrict income and employment. It is true that last December, following criticism by myself and others, the government removed the sales tax on certain articles of food; but that is only a single step forward on a very long road. The sales tax remains on many materials and much equipment going inito the production of food and on all other consumer goods, as well as upon the instruments of their production.
The burden of these taxes has been great for many years, but last November the government added a special excise tax of 25 per cent to all the other indirect taxes. This additional tax applies to a long list of miscellaneous articles, such as automobiles, refrigerators, brushes, mirrors, cosmetics, combs, cameras and film, radios, toasters, food choppers, electric kettles, irons, vacuum cleaners and so on. Most of these and many more are rightfully regarded by the average Canadian family as part of the necessary equipment for living; yet the government imposed this special tax which increased costs, increased prices and further stimulated inflation.
I shall touch upon some half dozen other government policies and try to show how they have made this price situation worse. The second factor in creating inflation iwas the process of decontrol. The way these things were done almost looked as though their very purpose was to produce inflation. Of course that was not the intention, but we can see now what the consequences have been.
The' first step, away back in 1943, was the removal of subsidies on the production of certain essential goods. As the subsidies were removed, the marginal producers of essential goods, caught as they were between rising costs on the one hand and price controls on the other, were forced out of production, or compelled to concentrate on the most expensive lines.
The second major move along the line of decontrol was when the government, after t>wo or more years of subsidy removal, in 1945 began to remove price controls. All too often they began at the wrong end. By removing price controls from non-essential, capital and luxury goods first of all, they directed the nation's productive capacity into those lines, to the detriment and reduction of essential production. So by the end of the program the government had achieved the
maximum possible reduction of goods which are the essentials of life; and now have the effrontery to ask a committee of parliament to find out why the cost of living has gone up.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


John Bracken: Mr. Speaker, when the house rose at six o'clock I was dealing with the report of the committee with reference to the rise in the cost of living and prices generally. I had touched briefly upon the history of this matter from the time when the resolution providing for the setting up of the committee was passed, and I had dealt briefly with some of the findings of the committee. At that moment I was engaged in a discussion of certain of the government's policies, and their effect upon rising prices. And in this last respect I had dealt with two of those policies, namely taxation, and the manner in which the government had taken off certain of the controls.
I was about to deal with a third question of government policy, namely the expansion of credit. Apparently the government felt that inflation was not moving rapidly enough, so they helped in worsening the situation by increasing the bank-note issue to the extent of $25,000,000. Then they allowed credit expansion to proceed almost unchecked. Bank loans and investments increased by 8777 million over a short period. The net increase in capital stock issue was 8236 million in the same period, and corporate bonded debt increased by 881,000,000. The net result has been that the government's policies have given us less than half as much increase in production as they have given in expanded credit and currency. That is one of the chief causes of rising prices; and for it the government is wholly responsible.
Then, as if this were not enough, the government undertook a fourth measure, the most inflationary measure possible for any government to take, the heavy cash subsidization of new capital investment. Between November 10, 1944, and March 31, 1947, the government, through the Department of Reconstruction and Supply, extended special facilities to industrial investment through the allowance of double depreciation against income tax. This resulted in new investments totalling SI,200 million, against which tax abatements are estimated to have amounted to $220 million in 1947. This is the equivalent
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of a cash subsidy of $220 million in rebates in taxation to encourage commercial investment. It thereby took from those who would use certain of these commodities, lumber, cement and other things, goods to the value of $1,200 million. It thus lessened the amount of these goods available for other purposes, thereby permitting or encouraging increases in cost.
This subsidizing of commercial construction and investment, in a time of acute shortage of consumer goods, greatly intensified the general inflation. This increased the cost of housing immediately; it increased the price of commodities beyond the reach of the average individual, and these increases extended all through the entire range of goods and services in current use. The view of the Progressive Conservative party is that, although capital investment is most desirable and quite essential to our long-term welfare, the government was paying subsidies to this extent out of public funds at a time when it would cause great hardship to the people at large.
We now come to the fifth of the government's policies, their trade policy. After having imposed unparalleled pressure on the limited supply of goods available, supplies which were limited largely as a result of government policy, they proposed to shut off a wide range of these supplies for the purpose of saving dollars. But many imports required not a single United States dollar in connection with their purchase from sterling area countries. Some of these embargoes were totally unnecessary, but they are the reason why such articles as tomatoes-I give that as one example- have been sold in Ottawa for as high as eighty-four cents a pound.
But the government, apparently not being satisfied with the mischief they had already wrought, undertook yet another measure, the reimposition, on January 1 last, of a long schedule of customs duties against the remaining imports which they permitted the citizens of Canada to obtain in the sterling area. As a result, prices once more marched upward toward infinity. I wish to make it quite clear that all these restraints on our trade with the British commonwealth had nothing to do with the dollar crisis, but they had much to do with aggravating the living crisis of Canadians.
In the face of these numerous actions by the government, all of which have increased inflationary pressures, the remarkable fact concerning prices is that they are not twice as high as they are, that the wholesale price index does not stand twice as high as it is-at 440 instead of 220. That the situation is not worse is a tribute to the patriotism, good sense and selfrestraint of all sections of our economy-of business people, of labour, and, above all, of

the average Canadian. Had it not been for this, the ill results of these government policies would have been much greater than they are.
In distressing and perplexing times such as these, it is the tendency of all of us to seek a panacea-some one, simple solution of all our troubles. Many have been led to believe that in the price control such a panacea was to be found. Our experience in the war, under the dictatorial powers given the government over prices and wages, laid the basis of that idea. For this false conception, as applied in peacetime, the government is alone to blame; because all during the war it constantly led the people to believe that price controls were, in fact, such a panacea; that price controls were the simple answer to the problem of how to fight a world war without any inconvenience at home. As usual, this kind of government propaganda misled if it did not deceive the people.
The government, by such politically conceived propaganda-I use that term in no ulterior sense, because it was their privilege to sell the idea of price control in wartime; my criticism is that it was overdone and the impression left with everybody in Canada that the same kind of thing could be carried on in peacetime, with equally good results, and when it was not carried on and prices did go up as they have gone up, then came the public reaction and the people said, "You did it before; you said you would do it again; you have not done it; therefore we will spank you"-created the illusion which for a while concealed the true nature and effect of the government's wartime policy. Now that illusion has been cruelly shattered. Not even the socialists and communists are sufficiently naive to believe that price control without wage control can ever counteract the effect of the multitude of inflationary measures which have been put to work by the government.
A little before six o'clock the hon. member for Dauphin (Mr. Zaplitny) mentioned two things. He referred to something I was reported as having said about the attitude of the hon. member for Portage la Prairie (Mr. Miller) toward price control. I think what was said was that his views with respect to the price controls were not different from those of the government. I think he said that and I may have repeated what he said. What the hon. member for Dauphin also said was that price controls were only a palliative, that they were not a permanent long-term remedy for this situation. With that we all agree.
What, then, is the situation now? A frustrated public now asks, what are we to do? The first thing we must do is to put an end

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to this business of skidding from crisis to crisis, snatching first at one expedient and then at another. Palliatives will not and cannot remove the causes of the present inflation. We must find ways to prevent the present so-called crisis from becoming a permanent condition of our economic life. We must find ways to prevent the minister's austerity program from becoming the permanent pattern for the life of Canada. Only positive remedial action will do that.
We must, first of all, set out to get rid of much of the welter of indirect taxes which are everywhere increasing the cost of production, and the cost of living, as well as restricting income and employment. The first to go must be the long list of 25 per cent excise taxes which were imposed by radio broadcast on November 18 last. The next to go must be the sales tax, in so far at least as that item enters into the cost of living. There must be reductions in the income taxes paid by people who do not make enough on which to live.
Perhaps I might be permitted to intrude another thought here. I sometimes wonder how we get in a state of mind that under postwar conditions like this we can all expect to have higher incomes, higher wages, help rebuild other nations and provide more generously for social security; how we expect to do all that and at the same time pay $2,700 million in taxes and still not have higher prices, is hard to understand. There has been something wrong with our thinking somewhere. We cannot rehabilitate Europe; we cannot add to our own well-being; we cannot pay higher taxes without either increasing production or doing with less. That is basic in our approach to this problem.
If we are to help over there, it is not bookkeeping; it is not dollars; it is not a manipulation of our currency-it is goods that will help. If we are to send them more than we have sent in the past we shall have to produce more than we have produced in the past or do with less ourselves. But there seems to be an inclination to produce less, and there is not much inclination to do with less.
Next, we must consider seriously the removal of many of the embargoes, quotas and tariffs which are shutting off our imports from the United Kingdom and other parts of the sterling area. We have been sending goods over there; they are unable to pay for them all, and in some respects we have been making it difficult or impossible for them to pay for them by shutting out more than we did during the war the goods that they could send in here. These restrictions have been
creating artificial scarcities and forcing up consumer prices here in Canada.
It is time that everyone in Canada realized that if these artificial restrictions could be removed we could get ourselves in due course into a much more fortunate position in the world as far as helping forward both ourselves and our less fortunate brethren in Europe are concerned.
Finally, we must overtake the government's inflation of our currency by greater productions. As a distinguished United States scholar and statesman, Bernard M. Baruch, said recently, "Production, production, production -that is the law and the prophets." We here in Canada also must realize the importance of production. To that end the government must get off the taxpayer's back by lessening taxes; business must set out to produce more without an increase in profit; labour must increase its productivity without an increase in wages; and. finally, farmers must plan to produce more without increased income. In addition, all of us, including the government, must learn that wars once fought have to be paid for, and that they can be paid for, destroyed nations rehabilitated, and high standards of living maintained, only if, by the partnership of us all, we produce more of the essential goods needed for the human family to live on.
If the government fails in its task, as it is doing, and if the rest of us prove to be unwilling to make these comparatively minor sacrifices we shall deserve our fate, another depression. But the government must give the lead. It must get off the backs of the people, instead of putting heavier burdens upon them.
If, then, we have the courage, the vision and the tenacity to face our problems, and then to work with a will to carry them out, we shall find that our price troubles will commence to disappear. But they will vanish only when we do two things: first, when we all learn that production is the only thing that will save us and that production means work by us all and, second, when the government refrains from its customary practice and puts economically sound instead of political expedient policies into effect. As I have tried to point out, the government has gone the wrong way about some of these matters. A reversal of its taxation and production plans is long overdue.
With many of the sections of this report we are in agreement; but, as a means of meeting the problem of rising prices, we consider that it is evasive, incomplete and less than frank with the Canadian people. We are not opposed, as I said, to many of the so-called recommendations or conclusions in this
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report. What we are opposed to is what has been left out of the report, namely, a consideration of the effect upon prices of the government's own inflationary policies. We are opposed to what the government has left out of the report more than we are to what it contains.
Some of our suggestions were outlined in our amendment, and I have tried to make a fuller statement upon them in my remarks tonight. Because of the inadequacy of the report for the purpose intended, we shall vote against it.


Clarence Gillis: Mr. Speaker, I had not intended taking part in this debate; but, after listening to some of the statements recently made, it is necessary, even at the risk of keeping the house here for a day or so longer, that the house and the country should have a clear understanding of the basis of the present debate.
The question before us is, in my opinion, the one that is uppermost in the minds of the Canadian people, namely, why there has been such a shrinkage since 1945 in their purchasing power or real wages. While the reason may be clear to many of us in this house, I am fairly sure that it is not clear to some of the speakers this afternoon and this evening, whose remarks may tend to confuse some people in this country.
What is the issue? The issue is that the government and the official opposition, by the removal of the controls which protected the consuming public of Canada during the war period, initiated a movement which in effect has robbed the people of from 30 to 40 per cent of their real income since 1945. Has that actually happened? The answer is yes, and the proof of the fact that there is something wrong with our price structure is that the government of Canada and the House of Commons saw fit to appoint a special committee which has spent several months in taking evidence to determine what is wrong in our economy. The report of that committee is now before us.
The first fact to be established is that there is something wrong with our economy. The committee's report is proof positive of that. But before going into the subject matter of the report, just to set the record straight I understood the hon. member for Lake Centre (Mr. Diefenbaker) to state this afternoon that the C.C.F. group in this house had supported amendments to the 25 per cent excise tax.
I stated that he was not present when this group forced the vote on the abolition of the 25 per cent excise tax. To be fair to the hon.

member, on the assumption that he wants to be fair to us, I wish to say that the hon. member for Lake Centre was present in the house.


John George Diefenbaker: On a question of privilege, Mr. Speaker, I thank my hon. friend and assure him that there was a little misunderstanding on both sides.


John Ewen Sinclair: Damon and Pythias.


Clarence Gillis: 
Maurice Hartt: Not to a duel.


Clarence Gillis: I should like to hear one of them tell us what they would do if they were sitting over on that side of the house. While they have said the government has done this and that which have created hardships for the Canadian people they have not told us what they would do. They have no proposal. The fact of the matter is that they would have to do exactly what the government is doing, in order to maintain our economy as it is, because they believe in the system of free enterprise.
They talked about the C.C.F. They said the C.C.F. were visionary; they were this and that, I was surprised that the hon. member for Lake Centre had something to say about Saskatchewan.


Mr. MITCHELL:: Brunswick?	What	about	New


John Ewen Sinclair: Brunswick?	What	about	New


Clarence Gillis: New	Brunswick did		exactly
what I expected.			
Mr. CASSELMAN, What about Ontario?
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Clarence Gillis: I do not want to waste the time of the house in talking about New Brunswick.


John Ewen Sinclair: We would like to hear about it.


Clarence Gillis: They did what I expected them to do; the poor, the uneducated, on relief, kept that way deliberately, subservient to the machine in power. That is the answer. They will wake up some time. We are not anxious about New Brunswick.


James Horace King: Order.


John Ewen Sinclair: No wonder you lost if that is the language Which you used there.


Clarence Gillis: We did not lose a thing. We increased our popular vote by about 200 per cent. We are sneaking up on you, my hon. friend.


John Ewen Sinclair: You had better get back to your text.


Clarence Gillis: I had referred to the hon. member for Lake Centre. I have a lot of regard for him. I like to hear him talk. He gestures nicely. If I was ever tried for any criminal offence I think I would send all the way to Saskatchewan and bring him down if I was guilty. Of course, if I was being prosecuted and I was innocent I would get the Minister of Justice. I know the hon. member for Lake Centre would free me if I was guilty.


John Ewen Sinclair: Go on.


Clarence Gillis: As I was saying, I was surprised this afternoon to hear him make a case against Saskatchewan. In his dramatic way he said that in the province of Saskatchewan where they had the power they passed an act and allowed it to remain dormant for a year; they never put it into operation. The hon. member gave that answer in the house. I sat here a couple of months ago and I listened to the hon. member for Lake Centre make a speech. Of course it served its purpose at that time. He said the Saskatchewan provincial government had passed a price control act, but they knew they had no authority or no power to enforce it.


John George Diefenbaker: Mr. Speaker, on a question of privilege, no such statement was made that they had no authority or power.


John Ewen Sinclair: You had better get the gesture.


Clarence Gillis: They had no power and they had no authority; it was a national matter; it was a matter that came within the purview of the federal government, and the Saskatchewan

government were only kidding the people when they said they could enforce price control.


John George Diefenbaker: That is what I said.


Clarence Gillis: The bon. member was right.


John George Diefenbaker: That they were only kidding the people.


Clarence Gillis: He was right at that time. They had no power to enforce that act. They tried to do something, though. They are pioneers.


John George Diefenbaker: When did they bring it into effect?


Clarence Gillis: They at least have the courage of their convictions. They passed the act. Then they went to the legal fraternity across the country 'and inquired into the validity of the act and the possibility of putting it into operation. The legal fraternity told them that they could not work it that way, that they could not fix prices in Saskatchewan.


John George Diefenbaker: Will the hon. member allow a question? Would he name one of the legal fraternity across the country who was consulted, because Mr. Douglas said just the opposite, that they would not bring it in?


John Ewen Sinclair: And blame the federal government.


John George Diefenbaker: Who was consulted?


Clarence Gillis: I do not want to give away state secrets in the house. It might embarrass my hon. friend if I were to name names, and therefore I am not going to do so. I know he would be the last one to expect me to do that. It would not be ethical professionally. What I am attempting to do, Mr. Speaker, is to show the house that rather than argue from their heart the necessity of getting something done with regard to the problems which are before the house, most of them are engaging in weasel words for the purpose of fooling the people in the country from whom they may be seeking votes. We in this group are not doing that.


Maurice Hartt: Tell us about the Tories.


Clarence Gillis: If you will examine the record back to the inception of this party, you will find that the formula and the principles for which we stand today in this house are the principles that we stood for back in 1932 when the manifesto was first written.


An hon. MEMBER:: No.


Clarence Gillis: I like the hon. member for Kamloops. He is a young fellow with learning, but like the baby you are bringing up and trying to lead in the ways of life, he ha3

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to be spanked once in a while so that he may understand what you mean. The hon. member spoke in this debate and he read into the record what I regarded as a pipe-dream of his, because I believe the boy has too much intelligence to believe what he said.


Edmund Davie Fulton: I thought that about you at one time.


Clarence Gillis: I did not hear what he said.


An hon. MEMBER:: Oh, yes, you did.


Clarence Gillis: I shall have to read it in Hansard tomorrow. What did he say?


An hon. MEMBER:: Shout it out.


Clarence Gillis: Did the hon. member for Kamloops say something?


Edmund Davie Fulton: Yes, I said I thought that about you at one time.


Clarence Gillis: There is nothing so funny about that. At that time you were able to think; apparently you have lost that ability. The thing that scares me about this party, and I mean it-


An hon. MEMBER:: Which party?


Clarence Gillis: The Tory party. They see a communist behind every bush. But let them not forget the lesson of George Drew. He, too, saw one behind every bush, with the result that today he is looking around for a seat. The people have smartened up to that kind of thing. My hon. friend says that the C.C.F. advocate the regimentation of labour.


An hon. MEMBER:: You did that the other night.


Clarence Gillis: Just a minute, my legalistic friend. Let me explain that to you. That matter has been put on the record of the house time and again. We are not afraid to say what we mean, but we refuse to allow you to put your interpretation on what we say.


Mr. TIMMINS:: You answered the minister.
Mr. GILLIS.; Yes. I have answered the minister a dozen times, and there is no misunderstanding between the minister and me on it. I have said this in the house a good many times for the benefit of my hon. and young friend the member for Kamloops, that organized labour in this country have no objection to wage controls if they are part of an over-all control system. The only thing they object to is the fixing of wages at substandard levels. That has been said in this house time and time again. For example, we would not allow you to fix in the hosiery business a wage rate of seventeen and a half cents an hour, as you have done under free 5849-382
enterprise. We would not allow you to draw zones, as you do in certain sections of the country., where there is a basic rate of twenty-five cents an hour or twenty-six cents an hour.
We would not allow you to freeze wages at those levels.


An hon. MEMBER:: Where are these
places?


Clarence Gillis: In parts of Quebec and in parts of Ontario'.


John George Diefenbaker: Where in Ontario and Quebec?


Clarence Gillis: Oh, definitely that is so, I do not want to start arguing with you-


Maurice Hartt: Not twenty-five cents, but zones exist in Quebec.


Clarence Gillis: Take the hon. member who brought the girls over here from Europe, the hon. member for Beauce. That was put on the record. The trouble with most of you members is that you do not read Hansard.


Mr. LENNARD:: Where in Ontario do those conditions exist?


Clarence Gillis: I would refer you to the hon. member for Ontario who has just come in.
He is a union organizer and he will give it to you section by section.


Mr. CHARLTON:: You give it to us now; you are making the speech.


Clarence Gillis: Of course I am. I am making the speech.


James Horace King: I would ask hon. members not to interrupt the hon. .member who has the floor.


Clarence Gillis: I refuse to become schoolteacher to a lot of members who do not read something for themselves.


Maurice Hartt: Do not be so modest.


Clarence Gillis: I mean in the Conservative party.


Maurice Hartt: Now you can go on.


Clarence Gillis: As I was pointing out to the hon. member for Kamloops, that is the position we have always taken in the matter of controls, and he speaks of "directed labour".
I said to the Minister of Labour (Mr. Mitchell) on his estimates, just as I said it in ' 1940, 1941 and 1942, since I have given considerable thought to the subject, it is much better for the employment services of the country to have a placement service whereby the unemployed in any given section of the country may be able to go in and check with

Report of Prices Committee
the placement officers in connection with unemployment insurance as to where jobs may be available in the country.


Edmund Davie Fulton: Will you not admit that that is different from directed labour in the sense in which that term is generally accepted?


Clarence Gillis: That is exactly what I said the other night, but you interpreted that to mean directed labour.


An hon. MEMBER:: That is not what you said the other night.


Clarence Gillis: I am saying now what I said then, but you quote a couple of sentences out of their context when they serve your purpose.


Edmund Davie Fulton: Quote the whole thing.


Clarence Gillis: I have Hansard on my desk, but one is not allowed to quote from a debate in the same session. I also said that employers needing certain types of workers should put their requirements before those officers. Do hon. members know there are hundreds of young men today running from one part of the country to the other looking for work? There is work available for them in some sections, but they cannot find it. They do not know how to get it. Many young fellows have visited me in Ottawa in the last month, and I could dig up information as to where they might go and obtain employment.


Edmund Davie Fulton: There is no objection to that.


Clarence Gillis: You objected to it this afternoon and tried to imply that, as far as the C.C.F. are concerned, they were advocating directed labour and all that kind of nonsense.
With regard to the report itself, when the proposal was made to set up a committee the C.C.F. took the position that it should not be set up, that it was the responsibility of parliament to do something about price levels. Our view was that this was our job in the House of Commons, and we voted against the setting up of a committee. Nevertheless we bowed to the will of the majority, and when the House of Commons decided that a committee would be set up we appointed members to serve on it. Those members took their place in the committee and discussed the question during the deliberations of the committee. The report of the committee was brought into the house and our assumption is that it is merely another report. We believe the report will be tabled in the House of Commons and relegated to the archives. I hope it will not be, but that has been the history of past reports.

We have tried to amend the report, asking the house to refer it back to the committee. We have sought to have the committee revived for the purpose of amending the report by doing certain specific things immediately, such as the reimposition of the excess profits tax and some measure of controls and the establishing of subsidies. Our proposal was ruled out of order. We are in a position now where we are faced with a vote on this report, and I will say this about it. I have read the report and, if it means what it says, there is a certain amount of meat in it. If the tabling of the report means that the government will take this report and do something about the fourteen recommendations made by the committee, all of which are good if they are acted upon-though we are still suspicious that they will not be acted upon-and if the Minister of Finance (Mr. Abbott) and the other ministers charged with the responsibility for government policy intend to do these three things, as far as this group is concerned we will vote for the report. There is something in it; it is a step in the right direction. We are assuming that the government will do something about it, and on those grounds we are quite prepared to support the recommendations of the committee.
I want to conclude by making an appeal to the official opposition. I do not know whether they mean what they say; but this afternoon, for example, the hon. member for Muskoka-Ontario (Mr. Macdonnell)-another man for whom I have a great deal of respect, and of whom I knew something a good many years ago, when he did not know anything about me, back when he was with the Eastern Trust Company-made a statement in reply to a question by the hon. member for Cariboo (Mr. Irvine). He said that profits were legitimate, that there was nothing wrong with them; and he quoted a book he hadi read, the author of which I know. The hon. member said if it is fair for labour to ask for certain increased wage rates, which is profit, then it is as reasonable for capital to have a profit on its investment.
The two points are entirely separate and distinct. Invested capital has no right to earn profit. Wages is something that accrues from the sweat and labour of a human being who stands for eight or ten hours a day wrestling with the soil or with the tools of production. That person requires at least sufficient to maintain a home and provide for a family. At no time in the history of this world has that labourer, who wrings a living either from the soil or from the machinery of production, been overpaid. He has never been in the position

Report oj Prices Committee
where he could maintain his family in decency and comfort, let alone save something. To compare him with the man who has a million or two million dollars to invest, and who can sit back in comfort in a luxurious home and draw from investments the equivalent of the wages paid that labourer, is simply not a fair comparison. That is unearned increment.


James MacKerras Macdonnell: Does my hon. friend realize that all I was doing was quoting to the best of my recollection-and I think I was accurate-from this book what one might call a philosophical comparison of profit and wages? I might add, though I did not say so this afternoon, that the author is now a labour peer. I imagine he is an out-and-out socialist.


Clarence Gillis: That is quite all right; very likely he has revised his views. I could name you fellows who wrote books on communism ten years ago, and who today are Conservatives. No doubt the person who wrote that book honestly believed he was making a fair comparison; but tonight I am talking about the answer my hon. friend gave to the question asked by the hon. member for Cariboo. There is nothing philosophical about it; this business of wages versus profits is a straight material question.
In conclusion, Mr. Speaker, let me tell the government that if they were prepared to do three things I am sure all the members of this group would be prepared to go out and fight with them, and help them to get the public to understand. First, I think they *have to re-establish the excess profits tax. The profits of practically every corporation in Canada today indicate that they have more than they are entitled to. Then, if you took the money you extracted by means of the excess profits tax-and mind you, no one would go on relief because you took it; no one would be hurt as a result-you could apply it to subsidies on essential commodities such as foodstuffs, on which ninety per cent of the income of the workers is spent today, with prices at present levels. Then you should revise the policy announced by the government, and re-establish the machinery of the wartime prices and trade board. You could call it what you like. You need not call it the wartime prices and trade board; you might call it a stabilization organization, or anything else. Do these three things and, in my opinion, within the next six or eight months-it will not happen overnight-the government will be able to get this country on some kind of even keel.
You will have opposition from over here among the Tory party; make no mistake 5849-3821
about that. There will be plenty of opposition from them, because in my opinion-and I do not mean any disrespect to hon. members, because I think they are all pretty good fellows-they are managed from the outside by those who want a continuation of the machine that exploits the people of this country. That machine is gone, and the government should recognize it. We will support this report, and we expect the government to do something about it. Then, when you get in hot water with the Tories and big business on the outside, I think we shall be able to explain to the Canadian people the necessity for the action you have taken, whether or not it means anything to us politically.


James MacKerras Macdonnell: On a question of privilege, Mr. Speaker, I consider it perfectly fair for the hon. member for Cape Breton South (Mr. Gillis) to express any criticism he wishes of those in this party, of our mentality or anything of that kind; but I think he should stop short of accusing us of virtual dishonesty, as he has accused us. I would regard it as dishonest to be in this house representing a constituency, and to be managed by anyone. I should think he would be man enough to withdraw a charge of dishonesty.


Clarence Gillis: When I made the remarks I did-


Mr. GREEN:: You went too far.


Clarence Gillis: No. I said there was no disrespect meant to any hon. members in this house. What I meant was that the machine of free enterprise-


George Russell Boucher: You did not mean a word of what you said.


Clarence Gillis: This morning, when you were trying to talk about the capital of Ottawa, I thought it would get through a lot quicker if you sat down and kept your mouth shut. This is what I meant. Hon. members in this house who represent the system of free enterprise know they are the advocates in this house of every corporation, every trust company and every bank in this country which also believe in that system. So you have no alternative, if you believe in it, but to go through with that philosophy; just as we believe in another philosophy and bring the dictates of our convention into this house and try to put them across. That is what I meant.


Edmund Davie Fulton: On a question of privilege, Mr. Speaker, in the course of his remarks the hon. member for Cape Breton South (Mr. Gillis) accused me of distorting a statement he miade on an earlier occasion. Since he has made
Report oj Prices Committee

that accusation, I .think I should have the .privilege of reading his words, so that the house -may see whether or not I distorted them. I refer to pages 6S21 and 5822 of Hansard, where the hon. member was talking about the unemployment service offices during the war.


Clarence Gillis: On a point of order-


Edmund Davie Fulton: I do not think there can be a point of order on a question of privilege.


James Horace King: I understand that the hon. member wishes to raise a point of order.


Edmund Davie Fulton: My understanding is that a point of order cannot be raised during a question of privilege.


Clarence Gillis: I am raising a .point of order.


James Horace King: Order. I would ask the hon. member for C'ape Breton South to wait until the hon. member for Kamloops has completed his question of privilege.


Clarence Gillis: With all due respect, if the hon. member is permitted to quote from this debate, according to the rules of the house, then I reserve the right to read what he does not read in connection with that statement. He is not in order to quote from that debate.


Edmund Davie Fulton: I shall be very happy to have the hon. member do so. My question of privilege, which is not part of the debate at the present time, is that the hon. member has said that on a previous occasion I distorted his words. I said I thought I should have the right to read those words, so that the house may have an opportunity to judge whether I am correct or not.
As I say, the words are found at pages 5821 and 5822 of Hansard. The words to which I refer are at a point where the hon. member, having described the useful functions of the employment service in wartime, said:
The office performed a useful function, because employers were obligated to register their requirements, and selective service had the right to direct employees to employment. This condition no longer obtains. I think it is a function in the unemployment set-up which at some time in the future will have to be restored.
Then the Minister of Labour asked the hon. member this question:
Do I understand the hon. member correctly, that he believes there will have to be a restoration of direction of labour?
And the hon. member replied:
Absolutely. If that is not done, the minister cannot stand in the house and tell me or1 other hon. members that he has a placement branch in his unemployment insurance set-up. He has no such thing.
If the hon. member wishes, I would be perfectly willing to quote the rest of the

passage. But I say that on that direct answer to a direct question which the Minister of Labour asked 'him if he understood correctly, the hon. member said, "Absolutely"-


James Horace King: Order.


Edmund Davie Fulton: There was no distortion in my remark.


James Horace King: The hon. member cannot debate the point.


Clarence Gillis: I should like to say this, that so far as I am concerned what he read is exactly what I said tonight; and I stand by it.


James Horace King: When the minister speaks he will close the debate.


Paul Joseph James Martin: Mr. Speaker, it is only appropriate that, as chairman of this committee, I should conclude the debate and try to meet as many as possible of the points which seem to me to be of special significance and which have been raised by those who have participated in the debate thus far.
I am sure the house would think I was only doing my duty if I were to pay tribute to all the members of the prices committee, regardless of party, for the great industry and diligence they have manifested since they were assigned the task given them in the middle of February last. Every member of the committee is deserving of the thanks of the House of Commons and of the people of Canada for the work they have tried to do in connection with this extremely difficult problem. And in paying tribute to them, I think it is only fair to include those agencies, such as press and radio, which have made known to the public the character and nature of the evidence being adduced by the committee through the interrogation carried out by two counsel who, as the hon. member for Cariboo (Mr. Irvine) said, have rendered distinguished service to the committee.
In assessing the merits of the committee, I think it is important to bear in mind why it was set up. It was set up primarily for the purpose of enabling members of the House of Commons to examine government officers, trade witnesses, and others, in order to see what light could be obtained in regard to this very difficult problem. It was basically a fact-finding committee and anyone who suggests, as did the leader of the opposition (Mr. Bracken), that while this committee sat there was a rise in prices, and that the committee failed to do its job because it did not check inflationary tendencies, certainly is attributing to a parliamentary com-

Report of Prices Committee
mittee a power which any reasonable man in good judgment knows lies outside the scope and reach of a parliamentary committee. No one for a moment attempted to use this committee as a means of reducing the cost of living.


An hon. MEMBER:: Why?


Paul Joseph James Martin: The committee was used as a basis for determining what were the facts and to suggest remedial measures. Hon. gentlemen and others in the country said that there were profiteers in the country, that there were people who were hoarding, that there were people who were making profits away beyond any reasonable level; and it was because of the temper of the public mind and of parliament at that time that this committee was set up to try objectively to ascertain exactly what the situation was and what suggested steps the house and the government could take.
Having said that, I believe the fact is that the committee has had, as the hon. member for Cariboo said, a salutary effect. Among those witnesses called before the committee was Mrs. Marshall, head of the Canadian association of consumers. Speaking for thousands of women throughout this country, what was the nature of her evidence? She said that she looked upon this committee and, indeed, so did the members of her organization, as a fact-finding body that could, independent of that purpose, have a salutary effect. Indeed she said that at the time, when we were examining the cost of bread, it did have a salutary effect; for, while we were examining the question of the rise in bread prices, the evidence with regard to the ten-cent loaf of bread did have the effect of encouraging throughout the country a wider interest in and a greater amount of purchases of the lower-priced bread than of the higher-priced. This, together with the evidence of Doctor Pett of the Departmental of National Health and Welfare, as to the equivalent or better value from a nutritional standpoint of the ten-cent bread-again using the language of Mrs. Marshall-has had a salutary effect.
While the committee was still sitting, we had one gentlemen who has a series of stores in the city of Montreal announce to the committee that, because of its request, and because of the disclosure of his profit and loss figures, he proposed to reduce the cost of bread.
Then there was the evidence of the gentleman who said that if the committee were not sitting he would raise the price of bread; and there was another witness, during the later stages of the sittings of the committee who said, with regard to textile goods, that if the
committee were not sitting he would raise the prices of some of the articles manufactured by his company.
And so one could go on to indicate that there were salutary effects which emanated from the kind of information disclosed and the realization that corporations and others would be brought before the committee to give an account of the price situation as it applied to their particular business. But it is not fair to suggest, as did the leader of the opposition, that this report brands industry as a whole. I call the attention of the leader of the opposition to conclusion 14 of the report, in which the committee says:
Since the war, industry in Canada has been making commendable efforts to relieve these shortages.
Where industry had done its job, we were not hesitant to say it had done its job. There is no judgment on industry as a whole which would justify the leader of the opposition, or anyone else, in saying that this committee conceived of industry in its entirety as acting contrary to the public interest.
We appToached our task, and it was a difficult one, as men who, regardless of political affiliations, were anxious to know the facts of the case, in the knowledge that the possession of such information would be of great value. The house will recall that the committee did not delay in beginning its sittings because, no sooner had the house passed the resolution authorizing its establishment, than within a few hours the committee held its first session. I said to the committee at our first meeting:
The character of this committee will be determined by the members of this committee, and I am sure that they will not permit it to be used as a smoke-screen. They will not permit it to be a means of delaying action. In saying that the facts must be exposed, we should bear in mind that we are not a white-washing committee; nor, on the other hand, should this committee be used to "smear" anyone. This is a fact-finding committee. Our findings will, we trust, have a salutary effect, but no one who has acted fairly in setting prices need fear this investigation. But we should act without fear or favour, and I know that we will.
I know every hon. member of this committee will agree that, after allowance is made for the odd exception here and there, exceptions to which we all in some way or another contributed, that was the underlying principle by which, for the most part and generally speaking, every member of the committee sought to meet the assignment that had been given.
I can only say that perhaps the best judges of the work of the committee are the members of the committee themselves. While the hon. member for Cariboo does not think we have gone far enough in the conclusions, he said in
Report of Prices Committee

this house the other night-I compare his words with those of some others in his group-that this committee was a good committee; that it did the job assigned to it and, in so far as the conclusions met in part his point of view, he could not help but give it his support. I am mot using any part of the tributes or estimates made by any hon. -member on this side of the house; I am taking the comments of the hon. member for Cariboo, who, I think everyone on the committee will agree, was an extremely diligent member.
What did the committee basically conclude? The committee -had a whole series of witnesses before it. We had the evidence of the chairman of the wartime prices and trade 'board, of the governor of the Bank of Canada, of the head of the bureau of statistics, of the commissioner of the Combines Investigation Act; we had a series of other officials of the government, and I could not help but think, as those gentlemen were giving their evidence, of the plea made toy the hon. member for Muskoka-Ontario (Mr. Macdonnell) in this house a year ago when he asked the government to set up a committee to investigate and interrogate officers of the -public service on -this and related questions. This government and this house gave the very thing the hon. gentleman asked for, and it is as a -result, in part, of what officers of the crown testified, that we are reporting to this House of Commons.
After the evidence was taken, we met and drew up our report and tried to arrive at what we thought would be the kind of commentary we should make about the problem generally and what we as a committee thought might be done to alleviate the severity of the problem.
I think the hon. member for Eglinton (Mr. Fleming) has taken a most unusual position in this debate. All through its deliberations he said that the committee was futile, that it was a waste of time, although I must say that he attended regularly and made valuable contributions toward some of its results. But I do not think I overstate the case when I say that he and his colleagues repeatedly took the position that the whole thing was a waste of time.
Yet when we came to the point in the final hours of the last meetings of the committee to try to see what we could recommend to our colleagues in this House of Commons and to the government of this country, what did we find? We found that not only was the hon. gentleman the only member of his party present when the conclusions were discussed and decided upon-


Donald Methuen Fleming: That was just at the last of the proceedings, remember.


Paul Joseph James Martin: I shall come to that in a moment. We found that the hon. member was the only member of his party present, and he voted in a wholesale way against every recommendation made, many of which he himself has espoused in this debate and many of which he himself urged in this house last February when the resolution to set up the committee was being discussed.
That cannot be said of all hon. members of the committee. The hon. member for Cariboo was the only member of his party who was present during the discussion of the report and its conclusions. The report was read carefully, various members taking part in the reading, and afterwards there was much discussion about it. When we came to the conclusions, the hon. member for Cariboo joined with other members of the committee on the government side and voted in favour of the conclusions and of the report. The hon. member for Jasper-Edson (Mr. Kuhl) and the hon. member for Eglinton voted against the report and its conclusions.
I propose tonight to analyse these conclusions in order to see what the opposition to them means and how that opposition may be interpreted, so that the party to which my hon. friend belongs can be placed in a proper light in the judgment of the people of this country. I must now come to the speech of the leader of the opposition. He said that some of the conclusions were good, but he implied that he proposes to vote against the report.
I do not want to do injustice to the speech of the leader of the opposition. When he speaks he speaks for a political party, and I think it is only fair that I should pay particular attention to what he says, even at the expense of overlooking what the hon. member for Eglinton said in his speech. First of all, the leader of the opposition referred to some of the conclusions as an ash-can group of conclusions. I wonder what conclusions he refers to as -ash-can? The public of this country will want to know from the hon. gentleman who has criticized the government for its price policy what conclusions he regards as being so unimportant as to term them ash-can conclusions.
What disturbs my hon. friends immediately opposite are not the conclusions themselves, but that they were brought in by the members on the government side of the committee and not toy the members of their own party on the committee. There was nothing that surprised the hon. member for Eglinton -more than to learn that the government members had set out conclusions which it wanted the committee to consider.

Report oj Prices Committee


Donald Methuen Fleming: They were all out of order.


Paul Joseph James Martin: My hon. friend says they were all out of order.


Donald Methuen Fleming: Of course they were.


Paul Joseph James Martin: If that is the only basis upon which he opposes them and if he wants to put them in order so that he can vote on them, that is a consideration which I would certainly want to entertain.
The leader of the opposition calls this a most inadequate document. In what respect is it inadequate? Are the conclusions inadequate? Are they correct? Do they offer suggestions that might help to alleviate the situation? The only contribution the leader of the opposition has made is that he has found some economic theory which he thinks will give some alleviation with regard to the present, rise in prices. What is that theory? He suggests that budgeting for a surplus is an anti-inflationary policy. He suggests that the purchasing power of the nation, without any relation to the availability of goods and services, is something which, if expanded without any thought of external conditions, will have the effect of causing a drop in prices. My hon. friend the leader of the opposition ignores completely the findings made by the committee based upon evidence given to it 'by those who, by training and knowledge, are in a special position to point the way; he pays no attention to them at all.


John Bracken: Mr. Speaker, I did not say that the expansion of credit would reduce prices. I said exactly the opposite.


Paul Joseph James Martin: What. I said was that my hon. friend said that if you simply expanded the purchasing power of the nation without any relation to the availability of goods and services prices would go down.


John Bracken: I did not say anything of the kind. I said exactly the opposite.


Paul Joseph James Martin: My hon. friend said so many opposite things it is hard to know exactly what he did say.
Then he spoke of the cost of living rising in this country. No one denies that. But he has failed to recognize that it is due basically and significantly, as I am sure on reflection he will now agree, to the rise of external prices, the increase in the costs of production, the expansion of purchasing power in relation to goods and services available, and to a number of other supplementary factors-


John Bracken: Including government
policies.


Paul Joseph James Martin: -whose effect is only to a certain extent appreciable. He repeats his statement about taxes and so on. He is again saying, in a way that perhaps he does not realize, that if you expand the purchasing power of the nation without any regard to the availability of goods and services, you will cause a reduction in the level of prices.


John Bracken: I said exactly the
opposite.


Paul Joseph James Martin: I am not talking now about the general price level. My hon. friend knows perfectly well that the relationship between a high tax level and purchasing power is such as not to require further comment from me.


An hon. MEMBER:: You have made that as clear as mud.


Paul Joseph James Martin: I cannot furnish the hon. gentleman with understanding. The whole argument of the leader of the opposition tonight was based upon the supposed fact that we were perhaps the only country in the world with no trading relationships with other countries. He forgets that the national income of Canada is to the extent of thirty-five per cent dependent upon our ability to sell goods to other countries. He neglected to make any reference to our economic interdependence with other countries. He might have compared us with countries with an economy comparable to our own, such as the United States, for example. He might have given to this house the cost of living in the United States as compared with Canada; but, since he has not done so, I will give him figures which I believe are revealing, because the United States economy and our own lend themselves to a comparison.
The total cost of living index from April 1 to May 1 in Canada was 152-5 and in the United States 169-3. Let us analyse those figures in terms of those factors which contribute to the cost of living.
The index for foods in Canada stood at 189-0, and in the United States, 207-9; rentals in Canada, 120-4, and in the United States, 116-3; fuel and light in Canada, 122-0; and in the United States, 130-7; clothing in Canada, 173-3, and in the United States, 196-4; home furnishings in Canada, 161-9, and in the United States, 194-7; miscellaneous in Canada, 122-9, and in the United States, 147-8. Let me repeat that the total cost of living index in Canada for the period mentioned is 152-5 and, in the United States, 169-3.


Mr. HOMUTH:: Now compare the taxation in the two countries.
Report of Prices Committee


Paul Joseph James Martin: Assuming that the taxes in Canada were higher, and that is not the case-


Karl Kenneth Homuth: It is the case.


Paul Joseph James Martin: -on the basis of the argument of the leader of the opposition, our cost of living figures are low. Surely that, put alongside the main part of his argument tonight, reveals its inadequacy and how little it contributes to a solution of this problem.
My hon. friend likewise forgot that the Minister of Finance (Mr. Abbott) did take certain steps to reduce taxation. He took the sales tax off electricity used for domestic purposes; the duty was taken off tea and coffee, and recently the sales tax was removed from canned foods.


Karl Kenneth Homuth: What a tremendous concession to give to the people of this country!


Paul Joseph James Martin: He forgot to mention that.


John Bracken: I stated that in my remarks.


Paul Joseph James Martin: Then I did not get it. If the hon. member did state it I am emphasizing it once more. What my hon. friend did not do, however, was to mention something that he continually forgets, for I have noted some of the speeches he has made in advocating social security measures. In one breath he will say that we must cut taxes, and in the next he outlines a program of promises that is exceeded by no other politician in this country. He has neglected to indicate that one of the reasons for the high tax level in this country is the social services that are being given to our people. He forgets to mention the sums of money spent on old age pensions. He forgets to mention the amount of money spent, and properly so, in connection with the veterans charter. He forgets to mention the $267 million that we are spending on family allowances this year alone, bringing assistance each month to three and a half million children, representing one and a half million families. He forgets to mention that the government is bringing in a program of national health that will cost this country in one year a sum of money greater than what has been spent on health by the federal government in the past twenty-seven years.


Donald Methuen Fleming: Shame on this government which has been in power all that time.


Paul Joseph James Martin: That surely puts in proper perspective the argument offered by the leader of the opposition tonight. But assuming that he was right; does he still believe that the conclusions put forward by the committee are conclusions which, while their generality is admitted, should not be supported?
[Mr. Homuth.J


Karl Kenneth Homuth: The committee's conclusions-


Mr. DEPUTY SPEAKER:: Order. If hon. members desire to put questions and the minister is agreeable to answering them, they may be put, but other interruptions are out of order.


Karl Kenneth Homuth: The minister should not be allowed to get away with assertions which are not in accordance with the facts. He said the conclusions put forward by the committee-


William Ross Macdonald: Order.


Paul Joseph James Martin: Two hon. gentlemen spoke from the C.C.F. group this afternoon, and one of them gave me the impression that he was not going to share the view which had been given to the house by the hon. member for Cariboo (Mr. Irvine), by the hon. member for Cape Breton South (Mr. Gillis) and others. Because he is not in the house tonight, I want to quote a statement which appears in Saturday's Windsor Star, attributed to the hon. member for Moose Jaw (Mr. Thatcher), to indicate how I think the hon. member for Vancouver Centre (Mr. Young) should unhesitatingly vote on this resolution. I refer to the hon. member for Moose Jaw, who is not in his seat. He had to be out of town tonight, and on that account could not, as a member of the committee, give his view with regard to the committee's deliberations, and I read to the house a statement of the hon. member for Moose Jaw, as follows:
W. Ross Thatcher, C.C.F., Moose Jaw, Saskatchewan, found himself in a position yesterday in which he felt it necessary to make a statement with regard to the prices committee report.
A member of the Martin committee on prices, Mr. Thatcher was one of many who thought the committee report would be a device to whitewash the government. For the past four days he had been preparing a minority report against what he thought would be the findings and recommendations. Then he found out he wouldn't have an opportunity to present his minority report in the Commons, so he re-wrote it as a speech.
When the prices committee was going over the final draft of the report tabled yesterday in the house by the chairman, Hon. Paul Martin, Mr. Thatcher remained in his own office to put the finishing touches on the speech he intended to deliver in the Commons today.
Then word came to him of the 14 recommendations. His C.C.F. colleague on the committee, William Irvine, Cariboo, B.C., told him he had voted for the report.
"So would I if I had been there", Mr. Thatcher told the Star. It's a good report, and immediately I telephoned Paul Martin to tell him so. Moreover, I pitched my speech manuscript into the wastepaper basket.

Report of Prices Committee
That was a frank statement from a member of the committee who had sat throughout its deliberations and who had made a contribution to the committee's work. Looking at the hon. member for Eglinton (Mr. Fleming) and the hon. member for Yancouver-Burrard (Mr. Merritt), who sat on that committee for four months, and who know of the evidence, I ask them to reconsider their position in the light of these conclusions. What are these conclusions? The first one recommends something which the hon. member for Eglinton recommended in this house last February. He said we should not have a parliamentary committee; what we should have is a commission of inquiry established, and let it do the job. Here we come along and recommend in conclusion 1:
That the government consider the immediate appointment of a commission under the Public Inquiries Act.
Did the hon. member for Eglinton support that conclusion in the committee? No. As the only member of his party present, he voted against the conclusion.
Take the second conclusion: the committee felt that while the combines investigation commission is doing a great job, his work could be accelerated and extended. Does the hon. member for Eglinton, does the leader of the opposition, sitting in this house, not agree with that conclusion? Does he think the combines commissioner should carry on just in the efficient way in which he is doing now and not have his work extended?
With regard to conclusion 3:
That the government amend the regulations of the appropriate legislation, if that be found necessary, so that immediate specific action can be taken where the evidence discloses flagrant cases of profiteering at the consumer's expense.
Does the leader of the opposition think that should not be done? In these cases where we know of unreasonable and excessive profit having an effect on price reduction, does he think we should do nothing about it? If my hon. friend refuses to vote for that conclusion there is no interpretation that we can place upon his act other than that he is against this recommendation.


Donald Methuen Fleming: Why did you not prosecute before now?


Paul Joseph James Martin: Take conclusion No. 5:
The government should give consideration to the desirability and practicability of restricting price rises by special taxation of unreasonable profits.
Do my hon. friends want the country to know they are opposed to that kind of resolution? Are they going to sit in their places 5849-383
and say that where we have evidence of unreasonable profits in relation to prices nothing should be done about it?


John George Diefenbaker: Why has no action been taken?


Paul Joseph James Martin: I ask him what 'he is going to do about it.


John George Diefenbaker: Why have you not done something?


Paul Joseph James Martin: I will deal with that in a moment. I was referring to the leader of the opposition and not to the man who aspires to be leader of the opposition. I ask the leader of the opposition, does he say that the government should not give consideration to t-he desirability and the practicability of restricting price rises by special taxation of unreasonable profits?


Edmund Davie Fulton: What does it mean?


Paul Joseph James Martin: With regard to conclusion 6, does he say that the federal government should not encourage a uniform system of business accounting, something recommended by the Canadian chamber of commerce? Does he recommend that we should not try to adopt measures that will give the public a better picture -of what the profit and loss statement of companies is?
With regard to conclusion 7, does he say that nothing should be attempted with regard to the disclosure of inventory reserves?


Karl Kenneth Homuth: They are all futile.


Paul Joseph James Martin: Under the present tax structure, inventory reserves are properly dealt with by income tax, but the purposes of this conclusion is to give the public a better opportunity of knowing a company's true position. The hon. member for Eglinton will recall that in the committee we discovered inventory reserves of over $9,000,000 of one company, a fact that had never been known before to the public. Does the leader of the opposition say that the people of this country should not be given these facts? If he votes against conclusion 7, that is the interpretation which the country will take with regard to his vote.


Donald Methuen Fleming: A crazy interpretation.


Paul Joseph James Martin: My hon. friend says it is a crazy interpretation. That is the kind of contribution he 'has made throughout this debate.
The leader of the opposition has been arguing that the government should remove certain excise taxes. He has gone up and down the length and breadth of this country,
Report oj Prices Committee

failing to mention why the Minister of Finance imposed these taxes. The committee has considered this measure.


Karl Kenneth Homuth: And so has Louis
Breithaupt of Waterloo North.


Paul Joseph James Martin: Here is what the committee says:
The committee is of the opinion that the government should consider whether the time has not come to remove the special excise taxes on commodities in common use in Canada.
The committee says that the government should consider this conclusion. In the face of what he has said in this house and tonight and earlier in the country, is the leader of the opposition going to sit mute with regard to conclusion 9?
With regard to conclusion 10, is my hon. friend going to say that the government should not give close consideration to the question of rent controls? Is my hon. friend going to say that if certain modifications in this control can be made to meet individual hardship it should not be studied and considered? Let me repeat again that, by refusing to vote, the leader of the opposition and all the gang behind him will be-


Karl Kenneth Homuth: Mr. Speaker, on a point of order. The Prime Minister would not use a term such as that. We will not vote for it now.


Paul Joseph James Martin: I will not use the word "gang"; I will use the words "small group".
In his speech the leader of the opposition quite properly dealt with the question of production. He said the basic answer to the problem which faced the committee and which faces the house in this resolution is the question of trying to stimulate production. What does the committee's report say about that? This is what it says:
The committee wishes to emphasize the fact that increased production at home and abroad .s the only permanent solution to the problem of high prices. The present shortage of commodities is world wide, forcing world prices to high levels, which in turn are forcing Canadian prices upward.
Since the war, industry in Canada has been making commendable efforts to relieve these shortages. The great amount of goods that Canada is contributing to the total world supply will aid substantially in relieving the present pressure on world prices, and in turn, will ease inflationary pressures in Canada.
Surely the hon. gentleman believes that, and, if he does, his responsibility is to give support to his belief.
_ The last thing I have to say, Mr. Speaker, is this. Hon. gentlemen opposite had an opportunity in the committee of disagreeing with these resolutions. They had an oppor-

tunity of amending these resolutions. They had an opportunity of offering alternative resolutions. All they did was to oppose the resolutions, proposing nothing in return. One hon. member said, "I haven't got time to deal with these resolutions; I am going to bed". That is exactly what happened.


Charles Cecil Ingersoll Merritt: Mr. Speaker


Paul Joseph James Martin: I did not name the hon. gentleman, but he identifies himself.


Charles Cecil Ingersoll Merritt: Mr. Speaker, I was the member of the committee who went to bed at one o'clock. The minister would not wish to leave the impression with the house, which he knows is not so, that I said I had not time to deal with it.


Paul Joseph James Martin: Perhaps the hon. gentleman did not go to bed after all. This committee, Mr. Speaker, has seriously met the task which was assigned to it. It has made a serious study of the problem, and I commend its terms and purposes to this house.


Some hon. MEMBERS:: On division.
Motion (Mr. Martin) agreed to on division.

The house in committee of supply, Mr. Golding in the chair.


William Henry Golding: The item before the committee is 298, national revenue.


Hon. J. J. McCANN (Minister of National Revenue):: The item, Mr. Chairman, is 297, taxation division, general administration. When we were last discussing questions under item 297, a number of inquiries were made to which I promised a reply. During the discussion of farmers' returns, some hon. members asked about the number of inspection officials in the prairie -provinces. This information, which is now available, indicates that there are eighty assessors operating in Alberta, seventy-nine in Saskatchewan and fifty in Manitoba. The number of assessors of all kinds operating in Alberta, Saskatchewan and Manitoba is: Alberta, 266; Saskatchewan, 213; Manitoba, 201. The total number of assessors employed by the department throughout Canada is 2,200.
A second question had- to do with returns filed by farmers. In connection with -returns by farmers, information was asked as to the number of returns filed in the three prairie provinces as well as the amount of taxes assessed farmers in those provinces. As of June 16, 1948, the number of farmers who filed returns was: Manitoba, 26,278; Saskatchewan, 49,490;

Supply-National Revenue
Alberta. 42,075. The total number of farmers who filed returns throughout Canada was 190,858.
The latest tabulation of tax assessment is for the year 1946 and is as follows: Manitoba, taxable 6,780, tax paid $1,265,000; Saskatchewan, taxable 13,890, tax paid, $3,299,000; Alberta, taxable 10,731, tax paid $2,570,000. For the whole of Canada, 40,387 farmers were taxable and paid a gross amount of $9,843,000.
In connection witth another inquiry with reference to the opening of safety boxes for the purpose of investigation, I wish to inform the house that the department is without authority to examine a taxpayer's safety deposit box without a search warrant or a court order, and as a matter of practice the department also asks the taxpayer or his representative to be present at the time the safety deposit 'box is opened.


John George Diefenbaker: Were any opened without search warrants? That is the question.


James Joseph McCann: The answer is no.


John George Diefenbaker: That is not the information I have.


James Joseph McCann: The hon. member for Lake Centre also asked a question with reference to the limit of $400 which the dependent could earn without affecting the exemption of the taxpayer. On March 18, 1942, this limit was established under authority of section 75, subsection 2, of the Income War Tax Act, and all officers were advised accordingly. That is the section which gives the minister power to fix the amount.
The next question was by the hon. member for Muskoka-Ontario, and had to do with assessments. I indicated that it was the hope of the department that eighteen months would see us on a current basis of assessment. This conclusion was based upon the fact that we now have on hand approximately 1,500,000 unassessed returns which were filed prior to April 30, 1947, as well as an estimated number of 3,800,000 returns for the last fiscal year, referred to as current. On the basis of maintaining the present rate of assessment of 350,000 returns a month, it is expected that at the end of eighteen months some 6,300,000 returns will have been assessed, which would place the department upon a current basis.
Another question was in connection with the dismissal of a certain number of employees of the Saskatoon office. The question was as to how many taxpayers' returns were involved in the case. Of some fifty returns investigated in this connection, approximately twelve were found to be implicated.
5849-383J


Mr. HLYNKA:: When the minister's estimates were under consideration last Saturday I asked him in regard to the years 1941, 1942, 1943 and .1944, as applied to farmers in connection with income tax. From 1930 to 1939 the farmers of western Canada were selling their products at below the cost of production. The government did not advise the farmers that they would be expected to file returns for 1941, 1942, 1943 and 1944; and for that reason the farmers did not keep their books and accounts. Now that they are being asked to file these returns, they are not in a position to know what their expenditures were. In view of these facts, would the minister give favourable consideration to waiving the income tax for those years in connection with farmers who obviously are not in any position to pay the taxes which have been levied upon them under this net worth system which has been applied by the government?
As I said last Saturday, I believe the minister would do a good stroke of business if he did not require these farmers to file net worth returns for those years. I pointed out also that it was unfair, after the government had allowed this matter to slide for so long, to come along a few years later and ask the farmers to produce their books and accounts and, if they failed to do so, to apply this unjust net worth system. I feel that the minister, the department and the government are making a mistake and are really treating the farmers unjustly in adopting this method of collecting taxes for the years I have mentioned. Will the minister give consideration to my request?


James Joseph McCann: We have no authority to take such action as the hon gentleman has suggested, nor has the minister any discretion in the matter. If there are cases where undue hardship would result, action could be taken by the governor in council.


Clarence Gillis: I should like to ask the minister another question in reference to the refundable portion of the tax. He has already stated that the total refundable portion will be paid next year. Has the department given any consideration to cases of taxpayers who are indebted to the government for income tax, perhaps as far back as 1945? They still have coming the refundable portion of their tax, which is more than sufficient to meet their indebtedness. The department is holding that refundable portion at two per cent interest. When that portion is repaid, according to the minister, it is applied to the indebtedness of the taxpayer, but interest at eight per cent is charged on arrears of taxes.
Supply-National Revenue

Has the minister considered, first, making the refundable portion payable at once where there are extenuating circumstances, for example where a person may have to go into hospital for a major operation? Could that be done? In the second place, could the minister not apply the refundable portion of the taxes to the arrears now? You have had it all the time; and could it not be applied to the arrears, so that interest would not accumulate and eat up most of the portion which otherwise would be refunded?
Mr. MoCANN: Again that is a question of authority, and there is no authority for it.


Clarence Gillis: By regulation?


James Joseph McCann: No, there is no regulation.


Clarence Gillis: Could you not make one?


James Joseph McCann: It is set out in the statute. The refundable portion of the 1943 tax is payable in 1949. The refundable portion was collected for only half the year 1944. Ordinarily that would be payable in 1950, but in order to save work and expense it has been announced that the refundable portion of the 1943 tax and the refundable portion for the half year 1944 will be payable together in March, 1949. There are two exceptions: people who are sixty-five years of age, who have an income of less than $5,000 a year, and to wind up an estate. These are two separate items. We have the amount owing, the amount of tax unpaid, and the interest charged. The other item has to do with the refundable portion. We will keep our obligation to the taxpayer and see that he gets his money back on the date we promise; and, as far as 1944 is concerned, he will get it back a year earlier than was previously expected.


Clarence Gillis: The minister did not answer my first question. I asked if the refundable portion of the tax could not be made available where there were extenuating circumstances. I mentioned the case where a major operation might be necessary, where it is delayed because the money is not available.


James Joseph McCann: I am afraid if that were done the hospitals would be full in a very short time.


Clarence Gillis: That would indicate that the people are sick.


James Joseph McCann: We have had all kinds of requests of this kind on compassionate grounds. Some are very appealing, and in some cases if it were possible I feel that I should like to do something. But it would upset the operation of the plans we have made. This refunding of 1,400,000 cheques is an

enormous problem. We are still looking for fifty thousand of those people. We have used every means, but have been unable to locate them. We have used credit associations, who are accustomed to this business; we sent out postcards and advertised in the newspapers, just to have them tell us where they live, that there was money waiting for them. Fifty thousand people have not claimed their money; and from 1943 to 1948 over four hundred thousand had changed either their name or address or both. I can go this much farther, however, and say that my hon. friend's representations will be brought before the government. If the regulations are changed we shall certainly administer them.


Percy Ellis Wright: I should like to ask the minister the reason for one regulation, as it affects a farmer who, because of age, has retired and leased his land. The man who operates the farm is allowed to average his income over three years, while the farmer who has retired is not allowed to do that, despite the fact that his income is just as variable as that of the operator of the farm. The retired man is dependent upon that income. I understand that he is not allowed to average it over the period allowed to the operator. What is the reasoning behind that?


James Joseph McCann: The reason is simple. He is a retired farmer, one who has given up that occupation. He is living on income.


Percy Ellis Wright: But his income is just as uncertain as that of the operator of the farm. His income is dependent upon production and prices, and it should be given the same treatment by way of averaging. It is income derived from the farm and is just as variable. In one year he may receive a good income, in the year of a good crop and a good price; but in the next year, with no crop, he has no income. His position is just as serious as that of the operator, in those circumstances.


James Joseph McCann: Hon. members should keep in mind that our department is entirely administrative. The question the hon. member has just brought up might well have been discussed in the debate on the budget or in the debate on the Income Tax Act. As it is in the statute, we administer it. There is no discretion given.


Percy Ellis Wright: Would the minister bring the matter to the attention of the proper government department, because it is working a hardship in western Canada where men who are retired depend upon the incomes from their farms? Because of our variations in weather and crop conditions, this works a hardship upon such men in some instances.

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Mr. CRUICKSHANK:: I am not concerned about this year's income in the Fraser valley. We have none. I should like to know from the minister what steps are being taken by the government to write off or to delay collections for arrears which, in the opinion of the department, may be due from farmers in the Fraser valley. They have no income this year, and apparently they will have no revenue coming from the government. What steps are being taken, either to write off or to delay the collections of arrears which may be due?


James Joseph McCann: We did make the concession-I will not claim it is very much-of extending the time for making returns. But no consideration has yet been given to the matter of writing off the taxes of the residents of that region.


George Alexander Cruickshank: May I ask the
minister whether, prior to dissolution, or whatever you call it, in a day or two, his department will give consideration to writing those taxes off, without interest? If not, why not?


James Joseph McCann: The department of itself has no power to do so. I shall bring the hon. member's representations to the attention of the government.


George Alexander Cruickshank: Thank you. I presume along with it will be the minister's recommendation that it be granted?


Mr. CASTLEDEN:: Have any members of the inspection staff used in Saskatchewan last year been replaced?
(Mr. McCANN: As the hon. member knows, in connection with the Saskatoon incident some of them in Saskatchewan were discharged. Those people have been replaced, and we are continually adding to our staff when we get qualified people.


George Hugh Castleden: What about the Regina office? Has there been a replacement there?


James Joseph McCann: The same applies to Regina. There have been no dismissals there, but we are continually adding to our staff at that point. Men are being promoted to that type of work as they are required.


George Hugh Castleden: Could the minister give the committee any figure as to the cost of collecting this income tax? He gave the figures for the various provinces. One figure of $21,000,000 was given. What is the cost of collecting that $9,843,000?


William Henry Golding: I should think that question might more properly be asked under item 269. We are now on item 297.


George Hugh Castleden: The minister did give figures with respect to the cost of collecting farm income tax in three provinces. I should like to have the corresponding cost of collection. If the question is answered on this item it need not be asked on the next one.


James Joseph McCann: We do not segregate the cost of collection from people in different occupations. I can give the general cost of collecting a dollar. But that is an average figure. Statistics are not kept of how much it costs to collect farmers' taxes, or doctors' taxes or lawyers' taxes.


George Hugh Castleden: But you have the average?


James Joseph McCann: The cost of collection in the prairie provinces is 1-87 per cent of the amount collected.
Mr. MAQDONN'ELL (Muskoka-Ontario): I should like to adk a general question with regard to organization. May I say in advance that I do not speak critically; I am just asking for information. I believe the minister said there were 18,000 employed by his department.
Mr. McCAiNN: Yes; in customs and excise there are about 6,000, and in the other branch, 12,000.
Mr. MAQDONN'ELL (Muskoka-Ontario): The problem of organizing 18,000 people is a formidable one. I once had something to do iwith organizing five or six hundred, and I thought that was heavy enough. It seems to me that, with an organization as big as that, it is humanly impossible to be sure of having a continuous scrutiny which will bring efficiency, unless somehow or another you are able to get minds from outside to survey it. In business we were able to compare things with people from the United States, and we received many useful suggestions from different practices followed there.
Is there any way, through correspondence with other schemes in the United States or the United Kingdom, or wherever you like, whereby the department is able to get fresh minds looking in from the outside? I do not care if you have supermen; they will not jump out of their skins in critical judgment of what they themselves are doing. Another man from outside could criticize.


James Joseph McCann: The matter referred to is continually under review. We made comparisons with the United States and Great Britain. In connection with tax agreements, we 'hear from Australia, New Zealand, the United Kingdom and from the United States, and get information from high-ranking offi-
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cials. The whole thing has been the matter of discussion between top-ranking officials in the departments in those places, and myself.


James MacKerras Macdonnell: Is that a matter of making tax conventions or of discussing principles of organization within your department?
Mr. MeCANN: Both. We compare notes and we do keep very much in touch with the system and organization in the United States. For instance, from the 12th to the 15th of next month there is to be a convention in Toronto, consisting of persons employed in the revenue branch of the United States administration, and in our own. At this conference matters of this kind will be discussed. Each year, representatives from each district in Canada come to Ottawa in the fall of the year for a conference which lasts about a week. They have with them the directors of district offices. And those directors bring with them members of their staff. These conferences mean that about 150 people would be called together to discuss administration and other matters.


James MacKerras Macdonnell: Have you any officer or group of officers in your department whose business it is to try to detach themselves as far as they can from the work of the department, so that they can render critical judgment on what is being done? It seems to me that when you have 18,000 people at work there ought to be constant supervision of that kind.
Mr. MeCANN: Members of the inspection branch of the head office visit all these different offices. The term "inspection branch" does not mean the inspecting of returns; it means the inspecting of district offices.


James MacKerras Macdonnell: I am afraid of the word "expert"; because sometimes they are not as expert as they pretend to be; but are there people in other ranks of business, leading accountants and so on, to whom you go for assistance?
Mr. MeCANN: We use all the other departments. For instance, we use treasury on equipment, and other departments are used in connection with efficient office management, the introduction of new types of business machines and that sort of thing. Anything that will lead to the efficiency of the offices, to complete inspection of the offices, to better dispatch of business, is looked into and carried out.


George Alexander Cruickshank: Has the department the authority to waive or delay the collection of past due income tax from a farmer who may have been affected by what the Prime 
Minister called a national calamity? It has been brought to my attention that certain farmers in my riding have been billed and threatened with court if they do not pay their income taxes within fifteen days, and yet at the present moment their farms are under eight feet of water. If there is no discretionary power in the department I think every hon. member would agree that such powers should be given to the department to waive any such nonsense as penalties and the threat of court proceedings when farmers' homes are under water, even supposing they do owe taxes, and personally I dispute it. If the department has not that authority I think it should be given under the 317,240,000 order in council that has been passed.
Mr. MeCANN: We have authority to delay collection, although there are certain penalties in the way of interest, but we have no authority to waive income tax. The problem referred to by the hon. member is being given serious consideration, and I think he can take it for granted that people who have suffered great loss will be dealt with on the most humane basis.


Donald Methuen Fleming: Last year, on the minister's estimates I asked about salary scales that were created when the taxation division had absorbed a number of accountants who had been in the employ of the wartime prices and trade board at salaries higher than those obtaining in the taxation division of the Department of National Revenue. The minister indicated at that time that steps were being taken to adjust upward the salary scales in the taxation division, so that there would not be this discrepancy between new and old employees. I was informed at that time that members of the staff who were senior by some years to those brought in from the wartime prices and trade board were actually receiving lower salaries.


James Joseph McCann: There has been a revision and readjustment of salaries, and the whole reviewed by the civil service commission.


Donald Methuen Fleming: My information is that in the Toronto office there is a substantial number of accountants who were formerly with the wartime prices and trade board.
Mr. MeCANN: Our salary scale was perhaps not up to what they had been getting during the war, and if they accepted employment with us they had to do so at the levels we were authorized to pay.


Donald Methuen Fleming: That is not my information, which I believe is correct. I am told that when they were taken into the division, of course not as permanent personnel, they

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were paid the salaries which they had received when employed by the wartime prices and trade board, and which were much higher than those being paid in the taxation division. The result was that men who were senior were actually receiving smaller salaries.
!Mr. McCANN: I think almost every one of those cases has been looked into and satisfactorily adjusted.


Donald Methuen Fleming: The minister says "almost every one"; when will the remainder be adjusted?


James Joseph McCann: I will say all, without any qualification.


[Stage Direction]
Item agreed to.
Taxation division-
803. District offices-further amount required, $4,540,372.
Frank Exton Lennard: This vote, along with the regular estimate, is nearly double the vote of last year.


James Joseph McCann: The ordinary estimates are based upon figures which were submitted last September.


Frank Exton Lennard: The regular item shows an increase of 87,000,000.


James Joseph McCann: That is my point. The regular estimates were made up in September, and we had to take into account what the establishment was at that time and what we contemplated it would be. Since that time, there has been a great expansion of work, with many more returns for 1947 being sent in than was anticipated. An extra number of people are employed in our district offices, and new offices have been opened up in North Sydney, Cape Breton island, and in the city of Sherbrooke. All these factors cause us to ask for the additional amount indicated in the supplementary estimates. The great part of our expenditure is for office administration and salaries.


[Stage Direction]
Item agreed to.
General-
National film board, including the motion picture bureau-
301. General administration, $181,443.
James MacKerras Macdonnell: Will the minister say something in a general way about the administration of the film board and cover perhaps the substantial items of expenditure?


James Joseph McCann: The estimates for the national film board come under three headings: general administration; technical services administration; production, distribution of
films, and the production of other visual material. The total amount asked for this year is 81,905,910. The national film board is a government agency which was formed back in 1939, prior to the war, for the purpose of co-ordinating the services for the production of films which were required by the various departments of government. That is what we call sponsored work. That is in addition to the appropriation which is asked for here for the national film board itself. For instance, National Health and Welfare, Trade and Commerce, National Defence or any other department, makes a contract with the national film board for the production of a film and pays for it out of moneys appropriated for that department. The national film board, in addition, is active in the production and distribution, not only of films but of what is called visual material. Just as a record may be kept in a book of great events, it has been found advisable that certain events should be recorded in what are known as documentary films. That, of course, requires the employment of many technical people. These films, once they are produced, are distributed. The purpose of making and distributing these films is to record great events which may take place in this country, and which should be put on record so that they can be used in the audio-visual sphere at some later date.


James MacKerras Macdonnell: Can the minister give an illustration of one such film that has been made, and state where it has been sent?


James Joseph McCann: Any great national event like the visit of the king and queen to this country, or some great sporting event, such as the world's figure skating championship by Barbara Ann Scott. We have also made a complete record of the atomic energy project, which may be of great use at some future date. Events like that are made into documentary films, which are kept in libraries if they are in the category of the atomic energy film, but if they are to be distributed throughout the country they are distributed through the film council.


James MacKerras Macdonnell: What about distribution in general for schools and so on?


James Joseph McCann: The distribution is nationwide, and it is done by stocking film libraries in various parts of the country with films which can be used by various organizations in the different communities. Normally an audience of approximately 250,000 persons is reached in the rural circuits with about 3,000 showings. In addition, certain films made are
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sold for distribution here in Canada and other countries, and that brings in a certain amount of revenue. One of the purposes of the film itself is to interpret one part of Canada to another, to let the people of Nova Scotia, for example, through a film know what goes on in the prairie provinces and British Columbia, and vice versa. The films are used for education and for entertainment. They are also used in foreign countries, such as the United States, Latin America, Australia, New Zealand and European countries to show the people there just what kind of country this Canada of ours is. When one gets to the genesis of film production in this country, it started first as the motion-picture bureau in the Department of Trade and Commerce. The objective was by means of films to show to other peoples of the world what we produce in Canada and what we have for sale. That work is still being carried on. We feel that the national film board is a very useful agency of the government.


Mr. ROSS (St. Paul's):: There is a revenue from some of the commercial films, is there not?


James Joseph McCann: Yes, some revenue, but not very great. It amounts to about $120,000 this year.


Frank Exton Lennard: I wish to draw to the minister's attention one point which I have no doubt has been brought to his attention before, and that is that the district offices or centres which lend out these machines should exercise more care, because I know of certain societies, which one might say are not acting in the best interests of Canada, borrowing these machines. I admit that the films were of a high order and they did no damage; but, after the film was shown for about half an hour, a two-hour meeting of a subversive nature was carried on. That is one thing I think the department should guard against.
I mention it, because I know it actually happened, and if I hear of its happening again I will communicate with the minister and give him the details. I shall not wait for parliament to meet to do it.


James Joseph McCann: That is a hard matter to control. This is what actually happens. In a community, probably they have a community get-together or an evening. The showing of a film is only part of that program.


Frank Exton Lennard: I know, but it should not be an inducement to encourage people to gather together to sow sedition and subversive material in the country, and that is being done.
I will admit that it may be a hard matter for

the department to control, but I think I could clean up a bit in the Hamilton district.


James Joseph McCann: I quite agree with the hon. member that these films, which are made at government expense out of the taxpayers' money, should not be used either for subversive purposes or for political purposes by any party; and, so long as I am connected with the film bureau, I shall try to see that that policy is carried out.


Douglas Gooderham Ross: I think they are used, as the minister says, for commercial purposes so far as Canada is concerned. I have only one or two things to say. First of all, I have used these films and I have found them excellent. There is one thing about which I have received complaints, and we ought to be pretty careful about it. I have had a good many letters from photographers complaining of the competition in still photographs with the regular professional photographers. They are getting competition from the national film board, and they do not think this is right. I do not know how it can be settled or what can be done about it. Certainly I have had a good many letters about it. We want to encourage individuals in this country who are in that business. We do not want competition from the government to take away their livelihood. It is unfair competition. Perhaps the minister can say a word or two about it. Probably he himself has had letters from these private photographers and can tell us something about it.


James Joseph McCann: What are called stills, the ordinary photographs, are sold at commercial rates, at rates which are agreed upon by the trade, and by the way, it is not a combine.


Douglas Gooderham Ross: These lads are in this business to make a livelihood. They are good photographers. They cannot get their supplies as cheaply as the government can. As a general rule, they have to pay more for them. If they are complaining, as they are, there must be some reason for it. I do not think the minister has given a complete answer to the question. Perhaps he will look into the matter a little more fully.


James Joseph McCann: This is a matter which has been pretty well settled, because within the past month representatives of the film board have met with these people and there has been an agreement. The rates that are being charged by the film board are comparable with those that are being charged by the trade.


Mr. MacNICOL:: I want to express a word of appreciation to the film board for the assistance they have given me on several occasions to present pictures about the natural

Supply-National Revenue
resources of the country. I wish particularly to refer to the office near the corner of Bank and Sparks streets. I believe the branch is presided over by Miss Greenwood. I am happy to say that she has always been very helpful in sending operators and machines to the House of Commons, either to the railway committee room or to some other committee room, to assist in presenting some feature about our natural resources. I am glad to say that I find the board very co-operative.


Herbert Wilfred Herridge: I just wanted to say a word or two to express the appreciation of the people I represent with regard to the work of the national film board in my constituency. I have received letters from women's institutes, farmers' institutes, trade unions, business organizations and all types of organizations wihch appreciate very much the services that the national film board is rendering in the district. I am quite sure that if even some of the city members, who possibly would not realize it to the same extent, could visit some of the smaller isolated points that exist in quite large numbers in the constituency I represent, see the eagerness with which the periodical visit of the representative of the film board is looked forward to, and experience the satisfaction that these people get from the services of the film board, some of them would be more enthusiastic in their support.
Before I take my seat I wish to make a suggestion to the board in regard to production, one that would be of particular use to children and, in many cases, to adults as well. I find an appalling lack of understanding of departments of government, what the various departments of government do, their functions, how they are administered and how they carry on. I would suggest that it would be a good thing for the national film board to produce a series that would bring before the younger people particularly, and the public in general, in the usually graphic manner, the function and operation of government departments. I am a firm believer that the more the people understand of democratic government and its functions, and see that it is functioning as it is intended to function on their behalf, the better citizens we shall develop and the better appreciation of our Canadian democracy will be engendered.


James Joseph McCann: The hon. gentleman's suggestion will be taken note of, and probably within the next year we shall do something in that regard.


[Stage Direction]
Item agreed to.
General-
National film board, including the motion picture bureau-
SOI). Distribution of films, $772,000.
James MacKerras Macdonnell: There is a reduction of $120,000 in distribution. Does that indicate change of policy, or is there some incidental reason for it?


James Joseph McCann: Yes, it does indicate a change of policy to this effect. In an attempt to get a general reduction of government expenditures, the appropriation this year is not as much as it has been in former years. It reached a peak during the war years. That was because films were used as war propaganda to a great extent; but the government felt that in peacetime the national film board should discharge the function for which it was originally founded by cutting down some of that wartime expenditure. I may say that, in addition to this expenditure of $1,905,910, we shall have another $500,000 or $600,000 for different departments. That makes a total of approximately $2,500,000. That is sufficient work for the facilities which we have and for the people whom we employ, and we believe that it is a fair amount to be expended by this particular arm of government.


John Ritchie MacNicol: Will the department have equipment for television as well?


James Joseph McCann: No; television would more properly come under broadcasting.


[Stage Direction]
Item agreed to.
General-
306.	Government office economies control division-administration, $10,678.
Douglas Gooderham Ross: We ought to have a word from the minister on this item. I think we could take this item and item 805 together.


William Ross Macdonald: The hon. member for St. Paul's has suggested that items 805 and 306 should be taken together.


Howard Charles Green: No; they have nothing to do with each other.


James Joseph McCann: Item 306 is an entirely different division which comes under my jurisdiction. The expenditure here is very small. It is called, "Government office economies control division-administration, $10,678."


James MacKerras Macdonnell: What economies has it made?


James Joseph McCann: This government office economies control division was established in 1942 to examine and review all requests in public service for printing, stationery, office equipment and furniture before purchases are made. In general the terms and regulations embodied in P.C. 4428 and amendments
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thereto are applied. Administration is centred in the director, whose duty it is to determine the necessity for the articles requisitioned, as also the quantity involved.
While records are maintained showing the number of requisitions dealt with and the estimated saving in each instance as a result of revision, any attempt to show by figures the economies effected in monetary value would not give the full amount, as no indication could be given recurrent savings.
In addition, to screening requisitions received each day, a careful review has been made of over 12,000 printed forms in use in the departments of the public service, and through substitution, lower grade quality of papers, standard size cut of forms, considerable initial and recurrent savings have been effected.
All free mailing lists in the departments of government have been curtailed to a minimum. Standardization of qualities Of paper in public printing and re-use of envelopes many times over have been effected, as well as reduction in qualities of binding of periodicals, publications, et cetera.
Careful review is made of all requisitions for publications, journals and other printed periodicals required for use of departments and approval confined to periodicals and scientific journals of use only to departments and libraries of government.
Periodic inspection is made of all government stores at Ottawa to ensure that stock is properly shelved and kept in clean and good condition. Inspection is also made of duplicating sections of departments of government and examination made of qualities of papers used on duplicating machines; furtherance of single space and narrow margin on copy and elimination of waste of paper and inks, et cetera, maintained.
Considerable study has been given by the director to the advisability of having dormant records microfilmed, so as to save the purchase of filing cabinets and space entailed in the filing and storage of dormant and semidormant files, and all departments have been advised accordingly. Several departments have adopted this process, and from information and records gathered it is believed that many other departments iwill follow.


James MacKerras Macdonnell: First of all, with regard to the vexed question of the outrageous waste of paper on divorce bills, could this office on economies do anything about that? As I say, it involves an outrageous waste of paper and is incidentally an awful nuisance to all of us. I do not wish to advocate any extra expenditure; but I

w'onder whether this organization, which is obviously a small one, can actually exercise any authority and whether it has weight to do the things which the minister says it does, or whether, as a matter of fact, it is simply a conduit pipe. Is the minister satisfied that it is exercising authority and doing the things he indicates are being done?


James Joseph McCann: If I had time I think I could prove conclusively that it has saved a good deal of money. When I look over the record from the time it was established and take into account the number of requisitions that come before it, I can say there has been a definite and positive saving. Going back to 1943, our record shows that we have saved $375,725.40 on this type of material alone, such as ink, stationery and furniture that is moved around from one department to another. There must be some sort of check and this is the only one we have.
With reference to the quantity of paper that is used in divorce proceedings, that is a matter which does not come under the jurisdiction of this department.


James MacKerras Macdonnell: Whoever can do it, it should be done. I would suggest to the minister that he satisfy himself that this department is really exercising authority and is not simply acting as a rubber stamp for what it gets from other departments, because that is what I would fear.


James Joseph McCann: 
James MacKerras Macdonnell: That sounds good.


James Joseph McCann: The saving is four times as much as the money it costs to operate the office, and that is worthwhile.


John Ritchie MacNicol: Keep it up.


[Stage Direction]
Item agreed to.
International short wave broadcasting station-
SO7. Maintenance and operation, $1,711,500.
Douglas Gooderham Ross: I wish to ask the minister a couple of questions. The other day he spoke with reference to this subject. He wishes to maintain the independence of the C.B.C. by continuing to collect the radio licence fee for each radio set. I wonder what

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difficulty he would have in getting licence fees from all those people throughout t'he world who listen to our short wave, because he cannot very well collect those. That brings up the question whether it is not better for us to do as we are doing at the present time in connection with the Short wave, that is to say, taking money out of the consolidated revenue fund and giving it to the C.B.C. to do a good job. I do not think anyone can say that they are not doing a good job of broadcasting various things for the people of Canada over trans-Canada and dominion networks, and what does seem so strange to me is that we are collecting only half the radio fees that we should collect in this country. I would say that on the average it is less than half. _ The thing is more or less ridiculous. I urge the government again to give the C.B.C. an allowance on a per capita basis for the population of Canada, which I believe would be about forty cents, instead of having all this nonsense. That would be sufficient. It might be well for the minister to let us know a little about what the 83,066,000 in the supplementary estimates is for. That is capital expenditure. Perhaps he could outline the whole thing. I should like to hear from him with reference to this farcical enforcement of the collection of the $2.50 radio fee in this country.


James Joseph McCann: The estimate submitted shows a slight increase in estimated expenditure for 1948-49 as compared with 1947-48. The amount for 1948-49 is $1,786,500. The increase is caused, first, by proposed staff appointments; second, proposed expansion of service; and third, necessary transcription service. With regard to the proposed increase in staff appointments, this ds particularly applicable to the European section, and the need for it can be understood by a reading of the statement included in the appended- notes at the end of this budget.
Briefly, the situation is that in some sections of our service we are able to secure to good advantage material for programs from freelancers. In other sections this is not the case. In the United Kingdom section, for instance, a great deal of free-lance material is available and is used. Such material is not equally available in the European section, since there are not a large number of free-lance writers with the necessary language qualifications available in Canada and, when they can be found, the fees charged for their work are very high. This makes it increasingly necessary to have in our European section staff members who are capable of producing their own material in the languages required.
Regarding the expansion of service, we anticipate that this will take place during the remainder of the period 1947-48 and in 1948-49. When the 1947-48 estimates were prepared, an increase in service was envisaged, namely the opening of a broadcast service to South Africa, Australasia, Belgium, Russia and Latin America. Only part of these plans has to this date been realized. We have established daily service in Spanish to Latin America. A halfhour program weekly is now transmitted to Australasia. We have made some test transmissions to South Africa. At present active consideration is being given to -the establishment of a regular service to Russia. Consideration is being given also to the advisability and the feasibility of service to South Africa and to Belgium in both French and Flemish. If these additional services are established

and certainly some of them will be-there will be a considerable increase in staff. This increase has been provided for in the budget estimates presented herewith.
As regards transcription service, it is to be noted that there is an increasing demand for and use of Canadian program material for relay over foreign broadcasting stations. The cost of making transcriptions is high, and therefore a separate amount is included in this budget under the "performers' fees" item to cover the requirements of this important service.
I might give the committee a little information in reference to this international short wave. Our physical plant is in Sackville, New Brunswick. It was built in 1942 and is owned outright by the crown, but is operated for a fee by the Canadian Broadcasting Corporation. No licence fees are collected from anybody with respect to international short wave; all the expenses come out of the money of the taxpayers. The situation is different in connection with the Canadian Broadcasting Corporation, It was set up by the government, and those persons in Canada who pay for radio receiving licences and commercial firms who pay licence fees may be said to be the owners of that system. They are the sole contributors to it. International short wave, on the contrary, is the property of all the people, all the taxpayers; and out of the appropriation we are asking parliament to vote this year this service will be continued.
The total hours of service are approximately 141/a a day. We have different sections which we call the United Kingdom section, the Caribbean section, Australia, New Zealand and the southern Pacific, Latin America, the French section, and the European section, which takes in Czechoslovakia, Holland, Germany, Norway, Sweden and Denmark. We employ ten lan-
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guages in the transmission of programs to the different countries, including English, French, Spanish, Portuguese, Dutch, German, Swedish, Danish, Norwegian and Czech. As hon. members can well imagine, if we are to transmit programs or information in ten languages, we must have people who speak those languages. They are people with special qualifications, and their fees are fairly high. Occasionally we broadcast programs in Italian, Greek, Polish and Russian.
From the opening of the international short wave service in 1945-that is when it was opened, though construction was commenced some time before-to the end of 1947, over forty thousand individual messages have been received from listeners all over the globe. In September, October, November and December of 1947 we received 8,357 letters. In January of this year alone we had 3,836 letters. It is notable that, in connection with the programs we were broadcasting to Czechoslovakia at about the time of the uprising there, we received, from September to December, some 2,522 letters. Letters have increased in number since January of this year from all countries except Czechoslovakia, where they are not now allowed to send letters to this country.
The projected expansion we have in mind for the international service is to Italy, Yugoslavia, Poland and Belgium. A careful study is being made of a possible news broadcast to Russia. The problems are, of course, the difficulty of obtaining reliable and competent personnel, and of getting reliable information with respect to listening in Russia and possible response to our service.
It might be well to bear in mind that pressure was brought to bear upon the government to build this station during the war years in order that it might be used to communicate with our men and women in the defence services in Europe. It is credited with being the finest international short-wave station in the world; certainly it is the No. 1 station of the western world. The service is very much appreciated. It is a non-revenue instrument, and on that account we ask parliament to vote this amount of money to carry on the service for another year.
I might give a breakdown of these costs:
Performers' fees	 $500,(XM)
Salaries	 615,000
News services	 47,000
General operating overhead	 315,000
Transmission lines	 31,000
Tubes and maintenance	 30,000
Crescent street-Sackville line	 42,000
Improvements to leased properties ...	10,000
Supervision charges	 81,500

That makes a total of $1,711,500, and in addition we are asking $75,000 for capital improvements.


Douglas Gooderham Ross: Plus $3,000,000; plus $66,000, which I think should be considered also. Those are in the supplemen-taries, and that is why I say we have to take them all together.


James Joseph McCann: Then, Mr. Chairman, would you please call item 804?


Douglas Gooderham Ross: Call them together.


Some hon. MEMBERS:: Eleven o'clock.


William Henry Golding: Do hon.
members wish to deal with all these items? We have items 307, 308, 804 and 805.


Douglas Gooderham Ross: They are together.


Some hon. MEMBERS:: Eleven o'clock.


William Henry Golding: Is item 307 carried? Carried.


Some hon. MEMBERS:: No.


James MacKerras Macdonnell: No, item 307 is not carried.


James Joseph McCann: My officers have been here for almost a week-


An hon. MEMBER:: So have we.


James MacKerras Macdonnell: We have been here for six months.


James Joseph McCann: An important meeting of the Canadian Broadcasting Corporation opened in Montreal today. The general manager and other officers would like to be at that important meeting, at which the monthly business of the corporation is taken up. If we could have another ten or fifteen minutes I think I would be able to give the information in reference to these items. However, I am in the hands of the committee.


Mr. HANSELL:: I am prepared not to call it eleven o'clock, if it will accommodate the minister and his officials. I have no desire to make a long speech, but only to ask one or two questions.


Mr. MacINNIS:: On the point made by the minister, if he can satisfy those members who want to take part in this debate in a space of 15 minutes, I am willing to stay that long. But it does not look to me as if he can.


James Joseph McCann: I might be over-optimistic.


Angus MacInnis: I am afraid you are.


Stanley Howard Knowles: Eleven o'clock.


Clarence Gillis: Try it for fifteen minutes.

Supply-National Revenue


William Henry Golding: Go ahead.


Ernest George Hansell: I should like to ask the minister in respect of this item, which I find explained on another page-


James MacKerras Macdonnell: Eleven o'clock.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

John Ritchie MacNicol: What is the business for tomorrow?


Mr. FOURNIER (Hull):: Tomorrow we shall continue with the Department of National Revenue, in which there are only four items left. Then we will take Public Works, and the remaining departments.


Stanley Howard Knowles: And there is nothing left but estimates?


Alphonse Fournier: There are some divorce bills to be considered at some time during the day.


John Ritchie MacNicol: I suggest that they be left until the last.


Donald Methuen Fleming: Is the government not proceeding with the annuities bill?


Stanley Howard Knowles: No.


Edmund Davie Fulton: What about the estimates of the Department of Finance.


Alphonse Fournier: We shall begin
with National Revenue and Public Works, and then the remaining departments.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply]:



DEPARTMENT OP NATIONAL REVENUE

[Stage Direction]
298.	Internal inspection and verification, $1,680,772.
299.	District offices, $21,856,266. Miscellaneous-
300.	Amount to be paid to the Department of Justice to be disbursed by and accounted for to it for customs, excise and income tax secret investigation services, $15,000.
General-National film board, including the motion picture bureau-
301.	General administration, $181,443.
302.	Technical services administration, $89,467.
303.	Production of films, including authority to finance temporarily work performed for other public authorities or other agencies as the public interest requires, $735,000.
304.	Distribution of films, $772,000.
305.	Production and distribution of other visual materials, $128,000.
306.	Government office economies control division-administration, $10,678.
Taxation division-
801.	General administration, including authority to create positions and make appointments, within the division, notwithstanding anything contained in the Civil Service Act and the said positions and staff so appointed are hereby wholly excluded from the operation of the said act-further amount required, $399,918.
802.	Internal inspection and verification- further amount required, $101,118.
803.	District offices-further amount required, $4,510,372.
[Stage Direction]
Tuesday, June 29, 1948