1949-03-31

PRIVILEGE


Mr. A. L. Smith (Calgary West):: On a question of privilege, Mr. Speaker, I ask the indulgence of the house for just a moment.
I am the bearer of good news. In this morning's paper I saw that an oil well known as Schoepp Imperial No. 1, which is just north of Edmonton in a new field, had proven 470 feet of a productive horizon, was still pouring and going on. This is not a world record, but it is approaching it. In view of the fact that from a few feet you can get a commercial oil well, members of this house can well imagine the tremendous and favourable effect of the news which has been received. In view of the fact that millions of barrels at that depth can come from one acre of ground, the house can readily understand how happy I am, and how happy everyone else should be, that that great discovery has been made.



PRIVATE BILLS


[Stage Direction]
Bill No. 175, for the relief of Diane Grossman Botner.-Mr. Winkler.
Bill No. 176, for the relief of Rosina Templeton Mclndoe Corliss.-Mr. Winkler.
Bill No. 177, for the relief of Lily Tansky Dratofsky.-Mr. Winkler.
Bill No. 178, for the relief of Anna Rose-marin Barsuk.-Mr. Winkler.
Bill No. 179, for the relief of Christy Margaret Chisholm Cook.-Mr. Winkler.
Bill No. 180, for the relief of Maud Ross Travers.-Mr. Winkler.
Bill No. 181, for the relief of Mary McDowell Hyslop Forbes Cahill.-Mr. Winkler.
Bill No. 182, for the relief of William Jackson.-Mr. Winkler.
Bill No. 183, for the relief of Vera Mildred Holley Martel.-Mr. Winkler.
Bill No. 184, for the relief of Ruth Gorofsky Hall.-Mr. Winkler.
Bill No. 185, for the relief of Rita Latour Shugar.-Mr. Winkler.
Bill No. 186, for the relief of Margaret Martin Stewart Scofield.-Mr. Winkler.


Mr. Frederic Dorion (Charlevoix-Saguenay):: On a question of privilege, Mr. Speaker, since I have the honour to represent in this house the only constituency whose territory is neighbour to that of the new province of Newfoundland, I wish in the name of my constituents to extend to our fellow citizens, especially those of the Labrador coast, the most hearty welcome on the occasion of the entry of Newfoundland into our confederation.
During the last seven years, in the course of my visits to the extreme eastern part of my riding, I have had occasion to meet a good number of Newfoundlanders who already have had very close and friendly relations with our own people. Having had the opportunity of knowing them, I am sure they will become good Canadian citizens.
Many residents of the north shore are the descendants of settlers who came to our country from Newfoundland. That is the reason why the ties already existing between the people of the two countries will be tightened by the joining of Newfoundland to the other provinces.
(Translation):
We were good neighbours. Now we shall become members of a single family and it will be our desire to work together for the prosperity of a great country.
(Text):


Mr. Reid:: You must have changed your mind.



QUESTIONS

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


Mr. Harkness:: What is the total number of personnel employed at command headquarters across Canada showing (a) officers; (b) other ranks; (c) civilian employees?


Mr. Baker:: Service	(a)	(b)	(c)	Total
Royal Canadian				
Navy 	30	85	25	140Canadian Army	169	343	291	803Royal Canadian	Air Force..	332	482	291	1,105Total 	531	910	607	2,048
Questions




Douglas Scott Harkness: What is the total number of personnel at the army area or equivalent headquarters, showing (a) officers; (b) other ranks; (c) civilian employees?


Loran Ellis Baker: The Royal Canadian Navy has no organization similar to Army area and R.C.A.F. group headquarters.
(a)	(b)	(c) TotalArmy	
66	211	230	507Air	
34	146	19	199Total	
100	357	249	706



PERMITS FOR NEXT OF KIN TO VISIT WAR GRAVES OVERSEAS

Mr. Diefenbaker:: 1.	Are permits available to enable parents or widows of Canadian service men whose graves are in the British or American zone in Germany to visit such graves?
2.	If so, what is the procedure?
3.	If not, would the government give consideration to granting issue of such permits?


Mr. Pearson:: 1.	Permits are not generally available for
the specific purpose of visiting war graves. Recommendations may, however, be made to the military permit offices of the occupying powers in especially compassionate circumstances. Application in such cases may be addressed to the Department of External Affairs, Ottawa.
2.	Answered by No. 1.
3.	It does not lie within the competence of the Canadian government to grant permits to enter the occupied zones of Germany. The government, however, has on a number of occasions brought to the attention of the competent authorities the desire of Canadian relatives to visit war graves. Advice is now awaited from the government of the United Kingdom as to whether it will be possible to develop arrangements by which visits may soon be made to graves in the United Kingdom zone. While it is understood that military permit offices will not generally grant permits to the United States zone for the specific purpose of visiting war graves, it may nevertheless be possible for visitors to enter the United States zone as tourists under certain prescribed conditions laid down by the United States zone authorities.



FORESTVILLE, QUE., HARBOUR FACILITIES

Mr. Dorion:: 1.	Has the government acquired the harbour facilities at Forestville, Quebec?
2.	If so (a) from whom; (b) at what price; (c) under what conditions?
3.	Has the public free access to the wharf at Forestville?


Mr. Fournier (Hull):: 1.	Yes, except the breakwater at the west side of the harbour and the pulpwood flume and loading plant, located on the wharf.
2.	(a) Anglo-Canadian Pulp and Paper Mills, Limited.
(b)	$385,000.
(c)	The department undertakes to maintain wharf, berths, channels and navigation aids. In the event of minor repairs not exceeding $50 in cost, the company may proceed forthwith with such repairs, but thereupon shall notify the district engineer.
The company's flume and loading plant is to remain on the wharf as long as required for its pulpwood operations. The company will maintain and operate them and assume legal liability for any damages resulting from their operation.
General wharf tariff, as applied by the Department of Transport, is to be applicable to vessels and cargoes of the company.
The company may carry on its pulpwood operations, provided that in so doing there is no interference with navigation in the harbour or public use of the wharf. The company is to have reasonable priority, during the shipping season, in the use of the berth alongside the flume.
3.	Yes.



QUESTIONS PASSED AS ORDERS FOR RETURNS


VEGETABLE OIL


Mr. Hatfield:: 1.	What quantity of vegetable oil was imported into Canada from 1945 to date?
2.	From what countries was the vegetable oil imported?
3.	What quantity of vegetable oil suitable for the manufacture of margarine was imported into Canada?
4.	What was the value of same and from what countries was it imported?



POST OFFICE LOCK BOXES

Mr. Fair:: 1.	Did the government take over post office lock boxes on the 1st of October, 1947?
2.	If so, has the government collected rentals as from that date?
3.	Did the government pay postmasters for the boxes taken over? If so, when?
4.	If not, by what right has the government collected the rentals?
5.	When will payment for the boxes be made?



NATURALIZATION

Mr. Maclnnis:: 1.	To how many persons were naturalization certificates issued in the calendar year, 1948?
2.	What were the countries of origin of such persons and how many from each country?


Mr. McCann:: Return tabled.



CONTRACTS FOR SUPPLY OF SPONGES


[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: I should like to direct a question to the Secretary of State for External Affairs. Although I have no brief for the people concerned, has the minister any comment to make on the recent summary ejection of two Canadian citizens from the United States? Further, has the government, or any member of it, received a letter concerning this matter from a nonpolitical and certainly noncommunist group of Canadians attending Columbia university?


Hon. L. B. Pearson (Secretary of State for External Affairs):: The hon. member was good enough to give me notice of this question, which I think concerns an incident in New York last week end affecting three Canadians who were removed by United States authorities from a banquet which they were attending in connection with the so-called cultural and scientific conference for world peace which was being held in that city. The United States authorities have of course every right to prevent Canadians and others from entering their country. They have every right to deport Canadians and other foreigners who are in their country. We claim that right ourselves. However, in view of the fact that the circumstances surrounding the exercise of this right in the case of the three Canadians in question seem to have been, to say the least, unusual, and in view of the fact that only Canadians appear to have been interfered with at the banquet in question, I thought it desirable, when I noticed a reference to this matter in the press, to request at once a full report on the situation from our embassy in Washington and from our consulate general in New York. That report has been received, and I am examining it to see if any further action seems to be required.
Our interest in these persons was solely in the fact of their being Canadian citizens, and must not be interpreted as indicating approval of any political views they may
Inquiries of the Ministry hold, or endorsing in any way the conference they were attending.
As to the second part of the question, a letter was received this morning from Canadian students at Columbia university protesting against what they called "the highly arbitrary treatment of Canadian citizens on the occasion in question".


Mr. Graydon:: May I ask a supplementary question? Were these three so-called Canadians communists? Has the minister any information in that regard?


Lester Bowles Pearson: The three Canadians were Professor and Mrs. Barker Fairley, of Toronto, and John Goss, of Vancouver. I am not in a position at the moment to make any statement about their affiliation or otherwise with the communist party. There is evidence to support the view that at least some of them did have connection with the Labour Progressive party.


Mr. Hackett:: Were they not deported because they were said to be communists?


Mr. Coldwell:: Why were not communists from other countries treated in the same
way?


John Thomas Hackett: I should like to ask the Secretary of State for External Affairs if it is a fact that the three Canadians referred to as having been ejected from the United States were not so ejected because they were communists or reputed to be communists?


Lester Bowles Pearson: The three Canadians in question have not been ejected from the United States. One remains in that country, as a special lecturer at Columbia university. I would also point out that we have not questioned in any way the right of the United States authorities to deport anyone from their country. Nor have we protested in respect of this particular incident. All I said was that the circumstances surrounding the incident seemed to call for a report, if we could get it, from the United States authorities. We have received that report, and we are now deciding whether further steps are necessary.


[Stage Direction]
On the orders of the day:
Mr. T. J. Bentley (Swift Current):: I should like to address a question to the Minister of Agriculture. Will the minister tell the house whether the statement of the Canadian Broadcasting Corporation is correct, that Canada is importing from Australia 1,000 tons of butter which have been diverted from 3,500 tons consigned to Britain? If so, what price is Canada paying for this butter?

Inquiries of the Ministry Righi Hon. J. G. Gardiner (Minister of Agriculture): I did not hear the C.B.C. statement, but I have read the press item on which I presume the C.B.C. statement was based. There was no discussion in the news item about any importation of butter at the present time. What was discussed in the news item was a transaction which took place some months ago. A representative of the authorities in Australia was giving an explanation of it. No importation of Australian butter is being made at the present time. The statement that 1,000 tons of Australian butter is being brought into Canada from Australia is not true.


John Thomas Hackett: Is it not a fact that a large quantity of butter is being imported into Canada at the present time?


Mr. Gardiner:: No; no butter is being imported into Canada at the present time.


[Stage Direction]
BASIS OF QUARTERLY PAYMENTS FOR 1949 On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: should like to address a question to the Minister of National Revenue. Since this is the last day for the payment of the first quarterly instalment on income tax for 1949, can the minister tell the house whether new quarterly payment forms, T.7B, are to be made out in accordance with the new budget? If so, when will they be distributed?


James Joseph McCann: The forms which are available at the present time were based on the assumption that the rates of last year would be in operation. I suggest that those who make out the quarterly form should use the old form, but take into account the new deductions and new rates as outlined in the budget speech.


Gordon Knapman Fraser: May I suggest to the minister that he have the income tax form-


Mr. Speaker:: Order. I would ask the hon. member for Peterborough West to address his remarks to the Chair; and I wish to point out that when the Speaker is on his feet the hon. member should resume his seat.


Gordon Knapman Fraser: I wonder if-


Mr. Speaker:: The hon. member for Lake Centre.


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, I ask leave of the house to refer to a matter concerning which I should like to 

direct a question to the Minister of National Revenue. The other day the director general of assessments, Mr. Cotter, speaking on the farm forum broadcast, stated that there is no reason why farmers should not employ their children on their farms and pay them wages, and thereby be permitted to deduct such expenditures paid to their children in arriving at their income tax. He further stated that if no more than $400 was paid to any one child under that arrangement, the child would still remain a dependent. My question is this: Has any change been made in the income tax regulations which will permit a farmer to hire his own children and, upon producing receipts, to deduct those amounts in arriving at his net income? If so, will this apply to the 1948 income tax returns of farmers generally throughout the country? This is a matter of importance.


Mr. Speaker:: Order. The hon. member knows that questions on the orders of the day should be brief. The hon. member's question is a lengthy one. I suggest that he put it on the order paper.


James Joseph McCann: Mr. Speaker-


Mr. Abbott:: Mr. Speaker said the question should be placed on the order paper.


Mr. Speaker:: I have suggested to the hon. member for Lake Centre that he put his question on the order paper.


Some hon. Members:: No.


John George Diefenbaker: On a point of order, Mr. Speaker, this is a matter affecting farmers throughout our country, and it is of great importance.


Douglas Charles Abbott: It is nothing new; it has always been the case.


James Joseph McCann: With your permission, Mr. Speaker, I have prepared an answer to the question, as it perhaps is of some importance at this time. I thank the hon. member for Lake Centre for having given me notice of the question.
It is a fact that, under the circumstances outlined by Mr. Cotter, that condition can obtain. It should be kept in mind that it is permitted provided that the children, instead of outside help, are employed in productive labour, and that they are paid in cash. It must also be kept in mind that if those earnings exceed $400 the child ceases to be a dependent for taxation purposes. The $400 is applicable in years up to January 1, 1949; and if the new budget passes, as we all hope it will, the amount is increased to $500.


Mr. Rowe:: In view of the answer given by the Minister of National Revenue, can he tell

the house how old a child must be before a farmer may include him in his salary list?


James Joseph McCann: I have had no notice of the hon. member's question. I suggest that it is a sort of catch question. I would say, however, that he should be a child of such an age that his services would be of some use to his father.


William Earl Rowe: About six or seven.


Mr. Ross (Si. Paul's):: May I ask the Minister of National Revenue if the same regulation will apply to the children of storekeepers, and so on?


James Joseph McCann: Yes.


[Stage Direction]
On the orders of the day:
Mr. W. Garfield Case (Grey North):: Mr. Speaker, I should like to address a question to the Minister of National Revenue in connection with income tax. Are citizens of sixty-five years of age and over still entitled to a special exemption?


Douglas Charles Abbott: If the hon. member will look up Hansard of the day before yesterday, he will see that they are.


[Stage Direction]
1948 TAX
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: May I be permitted to adopt the unusual practice of paying a compliment to the Minister of National Revenue? We do not hesitate to complain about delays, but I hold in my hand the official assessment of my income tax for 1948. It is not even due until the end of the month, but it is finalized already. The speed of his department in this instance overwhelms me.



RELIGIOUS PERSECUTION


[Stage Direction]
On the orders of the day:
Mr. E. G. McCullough (Assiniboia):: Mr. Speaker, I should like to address to the Prime Minister a question of urgent importance. In my letter of March 9 I drew his attention to the religious persecution in Spain as outlined in Time magazine of March 7, 1949, at page 43. I would further draw to the Prime Minister's attention an article appearing in the Globe and Mail of March 31, 1949, headed "Spain's anti-red plea for aid against Franco."
Inquiries of the Ministry


Mr. Speaker:: Order. I would call the attention of the hon. member to the fact that when a question is put on the orders of the day, it should be brief.


Edward George McCullough: My question is this: Will the Prime Minister take steps to raise the issue of religious persecution and violation of fundamental rights of citizens in Spain before the United Nations general assembly which is to meet next month?


Right Hon. L. S. St. Laurent (Prime Minister):: I shall be glad to bring the hon. member's question to the attention of the Secretary of State for External Affairs, who is now preparing instructions for the Canadian delegation.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. H. G. Archibald (Skeena):: Mr. Speaker, I should like to direct to the Postmaster General a question of which I have given notice. Does the Post Office Department intend to make any changes in the rental system that it has inaugurated for mail boxes in rural post offices?


Hon. Ernest Bertrand (Postmaster General):: Mr. Speaker, with the permission of the hon. member, I will answer his question in writing. As 1 said the other day, there are many different kinds of post offices, and the answer would have to be lengthy.



WHEAT BOARD


[Stage Direction]
On the orders of the day:
Mr. P. E. Wright (Melfort):: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce. Is it the intention of the government to submit the annual reports of the wheat board for the years 194647 and 1947-48 to a special committee of the house at this session?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: The subject matter of the question will be considered by the government, and an answer will be given later.



WAR DAMAGE


[Stage Direction]
On the orders of the day:
Mr. Rodney Adamson (York West):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs

Inquiries of the Ministry about the payment of war damage claims of Canadian nationals. My question arises from an appeal made to me on behalf of victims who lost their all through the sinking of the Athenia early in the war. Will the minister inform the house or make a statement now or later as to the payment of claims for losses sustained by Canadian nationals through enemy action?


Lester Bowles Pearson: The question of claims arising out of war damage is one for the department of the Secretary of State. I will take it up with the Secretary of State upon his return, and endeavour to get the information for the hon. member.


Agar Rodney Adamson: I tried to get in touch with him before.



OLD AGE PENSIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: May I ask the Minister of National Health and Welfare whether any arrangements have been made since the matter was discussed in the house to make possible at an early day the payment of old age pensions in the new province of Newfoundland?


Hon. Paul Martin (Minister of National Health and Welfare):: The government has taken every action within its power. I cannot say any more than that at this moment.


Stanley Howard Knowles: Is the minister aware that there is an item for it in the estimates?



HOUSING


[Stage Direction]
On the orders of the day:
Mr. H. W. Timmins (Parkdale):: I should like to direct a question to the Minister of Reconstruction and Supply. Having regard to the increasingly acute housing problem in Toronto, as reported in the press of yesterday, brought about by a continuing movement of people into that city, can the minister report what progress has been made by Central Mortgage and Housing Corporation in the matter of a comprehensive housing project for the city of Toronto and surrounding townships?


Clarence Decatur Howe: The minister is not in his seat. I shall be glad to draw this question to his attention, and no doubt he will answer it later.



FORECLOSURES IN CALGARY

[Stage Direction]
On the orders of the day:
Arthur Leroy Smith: I should like to address a question to the Minister of Trade and Commerce, of which I have not given notice. Perhaps it should be addressed to the Minister of Reconstruction and Supply. According to a Calgary paper which reached me today, it is announced by Central Mortgage and Housing Corporation that in carrying out foreclosures the cash payments which have been made will be returned to the persons concerned. May I ask if that information is correct?


Clarence Decatur Howe: I shall be glad to direct the attention of the Minister of Reconstruction and Supply to the question.



AUDIBILITY OF DEBATE

[Stage Direction]
On the orders of the day:
Mr. G. A. Cruickshank (Fraser Valley):: Mr. Speaker, this is an urgent question, because I have only twenty-four hours in which to put it before the house. I wish to ask the Minister of Public Works whether prior to the entry of Newfoundland into confederation as the tenth province arrangements will be made to make it possible for members to hear questions and answers in this chamber?


Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, I understand this comes under Your Honour's jurisdiction; I shall communicate the question to you.



INCREASED PAY FOR WOMEN CLEANERS

[Stage Direction]
On the orders of the day:
Mr. John R. MacNicol (Davenport):: A few
days ago I asked the Minister of Public Works a question with regard to increased pay for the women cleaners in this building. Apparently it had a good effect, although at the time the minister said it did not come under his department. Evidently what he said has had the result of these women getting an extra $4 per month. Not knowing whom to thank, I thank him.



APIARIES


[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: I should like to ask the Minister of Agriculture if the government has given any further consideration to the question of a support or floor price for products of beekeepers and honey

producers, to which I referred earlier in the week.


James Garfield Gardiner: We have had a delegation of beekeepers in Ottawa during the last week, and have discussed their problems with them. Those problems are being given further consideration.



POULTRY PRODUCERS


[Stage Direction]
On the orders of the day:
James Garfield Gardiner: On Tuesday the hon. member for Nanaimo (Mr. Pearkes) asked the following question on the orders of the day:
I wish to address a supplementary question to the Minister of Agriculture. Can he tell me what the situation is with regard to fish meal? I understand that a similar shortage exists in that type of meal.
I answered by saying that I would take the question as notice. In answer to the question the following information is submitted.
On the Pacific coast the herring fishing season has just ended. Compared with the past two or three seasons, little herring was canned, the catch being used for oil and meal. Almost 31,000 tons of fish meal has been produced, which is the highest on record. Supplies for the markets served by Pacific coast fisheries are good. Prices remain firm, indicating that demand is also good.
Atlantic coast fishing is more or less continuous, the main outlet for the catch being the production of fillets. However, the heaviest fishing season is during June, July and August. Fish meal is produced from the scrap remaining after filleting, and the production is up considerably from the previous season. Supplies are at least equal to average, but firm prices indicate that demand is absorbing the output.


George Alexander Cruickshank: Will the production and supply of fish be reduced because of the introduction of oleomargarine?



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon City):: On
March 14 the house passed a motion, standing in my name, for the production of papers. I should like to ask the Secretary of State, who is not in his seat, if he does not now think that sufficient time has elapsed to justify the immediate production of the cor-
The Budget-Mr. Macdonnell respondence concerned. I notice that the Minister of National Health and Welfare is in his seat; in view of his interest in the subject matter of the motion I would ask him to expedite the return.


Paul Joseph James Martin: I shall be very glad to do that.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, March 22, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. J. M. Macdonnell (Muskoka-Ontario):: Mr. Speaker, in opening this debate some ten days ago I referred to the cyclical nature of the budget and pointed out that it followed a political not an economic cycle. I pointed out that there should have been tax relief a year ago but that the minister preferred to save up and present us with a lemon last year so that he could cut a melon this year. I referred to the fact that, whether or not there were employment projects, there were certainly electoral projects. I said that it seemed clear that it was not the needs of the taxpayers but the needs of the party opposite that was calling the tune. I said that the taxpayers had got what could only be called partial restitution. I called the budget a bribery budget and I said that the taxpayers would have little difficulty in seeing through this obvious vote-catching device.
This was in sharp contrast with what the minister had said. Abandoning his usual modesty the minister with a great flourish of trumpets boasted of various things. He pointed out that the tax reductions during the last five years totaled something like $1,300 million. He then referred to the reduction in the debt to which I shall refer a little later. He also made mention of various social security measures and wound up by saying, "I know of no country in the world that can show a better record."


Some hon. Members:: Hear, hear.


James MacKerras Macdonnell: Apparently there are some hon. gentlemen opposite who agree with the minister. I was surprised at his manner until I realized that of course this was the minister's swan song, that he had seen the writing on the wall, that he realized the government was being weighed in the balance and found wanting and that
2180	HOUSE OF
The Budget-Mr. Macdonnell this was his last chance to claim fame before the curtain fell.
I am an accommodating person. If anyone feels that the word "bribery" is too blunt, I am ready to offer certain alternatives.
I imagine that the minister is a clever angler, coming as he does from the eastern townships, and I suggest that he was astute in baiting the hook for the taxpayer. In these days when the Irish sweep is in everyone's mind, perhaps I might use a phrase from the turf and say that the budget is by Political Necessity out of Suffering Taxpayer.
I do not propose to take any more of the time of the house in referring to what I call these election projects. I would only remind the citizens of Cape Breton, and the veterans of Hong Kong, who have received long deferred and inadequate recognition of their services, that they are fortunate that this is an election year, because otherwise they might have had to wait long enough for their just deserts to be remembered by the government.
I now come to the question of tax reduction. I must frankly say that I think the minister did his best to spread the jam as far as it would go. We have an offering to small corporations; we have an offering to shareholders; we have an offering to the general body of income taxpayers; and we have reductions in various excise taxes. I said in my opening remarks, and I say again, that I particularly approve of the relief given to small corporations if that measure can be so devised as to be free from abuse. It seems to me that it is a very useful thing, because we need small new enterprises constantly coming into being in order to maintain our free system.
There is one thing that the minister did of which I cannot approve, and that is the increase in the normal corporation tax from 30 to 33 per cent. It seems to me that this is clearly a breach of faith with the provinces. The minister may say that perhaps the written wording is capable of some other interpretation, but I say that this kind of thing would not be done in the relations between individuals, and it should not be done either in the relations between governments.
As to excise tax relief, the minister has covered a lot of territory. We have jewelry, luggage, traveling bags, and, for the benefit of those who are mistakenly called the weaker sex, we have relief on cosmetics. There is relief for smokers, of which I myself do not approve because I am not a smoker.


Douglas Charles Abbott: Neither am I.


James MacKerras Macdonnell: There is relief for those who enjoy games of chance on coin-operated machines. Then there is a further device which I am sure, Mr. Speaker, must have gladdened the minister's heart, and which I am sure he regards as his ace of trumps. I refer to the retroactive feature, which made certain reductions retroactive to the first of January. If we look back to two years ago when the minister gave tax relief, it was not made retroactive then. It was put forward; it did not come into effect until July 1. Of course, Mr. Speaker, that was not an election year, and so there was no particular need to put it back. In fact it would have been rather a nuisance to put it back, but now the minister has learned and, of course, the political wheel has turned, the political cycle has arrived, and the minister feels that cash on the barrelhead is the thing. He may have heard of the remark attributed to J. P. Morgan when somebody in his presence referred to "cash or its equivalent." That great financier said, "There is no equivalent for cash." I think the minister may have had that in mind.
The minister realizes that the taxpayer will be not only pleased but also surprised to see his money making a return trip. I think there is no doubt that the minister must have thought that was a good one, that the taxpayer would actually be having money paid back to him. I want to remind the minister of one thing. Do not let him forget to put in that blue slip which says, "this comes to you with the compliments of the Liberal party".
I think we may assume, Mr. Speaker, that, when the minister started collecting dollars to go vote hunting, he scraped the barrel, because after all he was concentrating on the election. He was not worrying very much about what will come afterwards, and indeed I think that the fellow who comes into power afterwards may find that the cupboard is very bare.
His estimate of income for the year 1949 is based on the assumption that everything will go well. We have got to have good trade, good crops, no labour troubles.


Douglas Charles Abbott: Good government.


James MacKerras Macdonnell: We
will come to that later. As a matter of fact, the Minister of Trade and Commerce (Mr. Howe) also says that, provided the present government continues in power, all will be well.


Some hon. Members:: Hear, hear.


Gordon Graydon: There is a hollow sound over there.


Mr. Speaker:: Order.


James MacKerras Macdonnell: The
minister ignores the fact that there are certain storm signals flying abroad. In the United States things are not just as rosy as they were. It looks as if the boom was subsiding a bit, and if it does do not let us fool ourselves-it will affect us in Canada because we are more vulnerable by reason of the extent of our foreign trade.
As I say, the minister scraped the barrel, and he has found as much beneficence to distribute as he possibly could. Of course, we welcome tax reduction, and our complaints are only two. The first is that it was delayed until this year, and secondly we complain that it was in part wrongly distributed. We say that the minister ignored the needs of the group of taxpayers between $2,000 and $2,500 for married people and $1,000 to $1,250 for single people. We feel that this group is entitled to a higher priority. We feel the same about additional allowances for children. Last autumn our convention went on record to that effect. We did so deliberately, and after as careful investigation as we could make. We stand by what we did then.
Therefore we say that this group of taxpayers is in greater need than some of the others. For example, while it is a very nice thing that people who are traveling should have the tax taken off their tickets, and that people who use long-distance telephone service should have the tax taken off their accounts, we do not believe that their need is as great as that of the group I have mentioned. After all, a married man with an income of $2,200 a year has not very much left for traveling after he has paid for the necessaries of life, and he does not use the long-distance telephone very much. Therefore we say it would have been fairer if that group had been considered and given a higher priority.
I could mention other items in the excise group which we think might have waited. I believe further that some of the income tax relief which has been granted is not as much needed as relief to the group of taxpayers I have mentioned. If this was true last October when we passed our resolution, it is truer now because government policy has added somewhat to the cost of living of the class I am talking about. I say that some regard should have been had for those who have been hit hard by such things, for example, as the increase in the cost of bread. The particular class to which I have referred for which we appeal, and all other nonincome tax payers, outnumber all income tax payers. Therefore there is no reason in the world why they should not have been considered more than they were.
The Budget-Mr. Macdonnell
Another point I wish to make is that if relief had been given last year, and if the surplus this year had been the result not merely of continuing high taxes, but of doing a certain amount of saving, then the government might have been in a better position this year than it was in order to meet the needs of these people. We might have had more economy. But how can you have economy when everyone in the government service knows that there is a huge surplus?
Economy is not in the air; spending is in the air. We all remember the immortal remark made by the Minister of Trade and Commerce (Mr. Howe). I blush to repeat it, but after all it was an immortal remark, made some three and a half years ago when someone on this side asked if a million dollars-could not have been saved. "Yes," he said,, "we could have saved a million dollars, but what is a million dollars?" That was when we were having a deficiency in our national income. Imagine what the minister would say if he were asked that question now, with surpluses running into the hundreds of millions.
I ventured to tell the Minister of Finance (Mr. Abbott) last year that he would never get any economy until he rationed the various departments; but how can you ration departments when you have a surplus which in the last two years, including certain special figures, ran not far short of $2 billion? 1 do not suppose the ordinary head of a department can believe in the existence of such a thing as economy when he knows there are these hundreds of millions of dollars to play about with. And it seems to me just human nature, Mr. Speaker, to say, "What are a few tens of millions of dollars as against two billions or even $575 million?" Philip Snowden was right when he spoke about the danger of these surpluses, because when there are piles of money by way of surplus no. one is going to think very seriously about economy.
I think it is a great injury to have this-situation arise. Debt reduction, yes; of course we want debt reduction. But we do not want it in a hit-or-miss fashion. We do not want it just as the political cycle turns, but we want it on a sensible basis, regularly carried out and known to all.
To show how absurd the thing is, Mr. Speaker, I have only to point to the contrast between 1948 and 1949. I have tried to put it in the form of a simple algebraic equation; it has to be simple or I would not understand it. 1948: good times plus large surplus minus election equals debt reduction but practically no tax reduction. 1949: good times plus large surplus plus election equals tax reduction
2182

The Budget-Mr. Macdonnell without debt reduction. You see, it is like one of the simplest propositions in Euclid, one of those near the first of the book; but what a light it casts upon the refusal to give any reduction last year, and the keeping of it all until this year.
I said, and I repeat, that I think the minister made a genuine, honest attempt to spread the jam around as far as he could, and to ingratiate himself with as many people as possible. I confess that as I listened to him at first I was a good deal impressed; as I mentioned, I feared the appeal to cash, and I thought the taxpayer, even when he knew it was his own cash making a return trip, might be pleased and, for the moment, led away. But the more I have had a chance to reflect on this budget the more it seems to me there are great gaps. The jam was not spread everywhere; there are great holes in the net; many kinds of people were not -aught in it.
As I say, in spite of the minister's genuine attempt, in spite of the glee with which he told us how good his timing was, there are these oversights.
Moreover, I think the electors are becoming cynical, and I even wonder-though of course the minister would never admit this-whether "he has sometimes wondered if it would not 'have been better to give some relief last year, as he should have. At any rate, I am inclined to think that more and more taxpayers would accept the reasoning contained in a rather /good cartoon which appeared in the Toronto 'Telegram the other day. I hope the minister lhas seen it, because it is really very flattering. The minister is shown with a most insinuating and ingratiating smile. He is under the eye of a policeman-


Douglas Charles Abbott: I will subscribe to the
Telegram at once.


James MacKerras Macdonnell: tically no relief for the farmer in connection with those taxes. The farmer does not buy many expensive traveling bags. I suppose his wife buys cosmetics, but he does not go in very much for jewelry, so he is not greatly helped by this budget. He is a man who owns plant and equipment, an individual in business for himself, and he knows what commodity taxes mean. He knows, like many others, the burden of the eight per cent sales tax, which has not been altered at all.
The second group which has been neglected is that group covered in our resolution, and all other non-income tax payers who, as I have said, outnumber the income tax payers. These are all affected by commodity taxes. They have been given no relief; in fact their position is actually worsened by the budget, because at the moment the cost of some of their commodities has gone up. I heard a report of what a man in western Ontario had to say about this budget, and I have summarized it because it seems to me to describe the position very well. He said that the Abbott budget contained sunshine for all classes except the very large class- and as I said a moment ago I believe it represents the great majority of the people-who are scrimping along through the high cost of living period in the low income bracket, where income tax reductions do not mean anything at all. This man then refers to the increase in the price of bread.
Then I had a report from Nova Scotia which was very similar. There are many nonincome taxpayers in Nova Scotia, too, particularly in the country, and there they are interested largely in flour and tobacco. There is no relief as far as tobacco is concerned, and they found that the cost of flour went up from $1.05 to $1.25 the morning after the election, or rather after the budget; we have not reached the election yet. Sugar and molasses are up, also. Apparently this man is a bit of a wit, for he said, that when the taxpayer first saw this budget he thought it was pretty good; but when he took a second look at it he said, "Santa Claus filled the stocking but stole the Christmas tree." This same authority in Nova Scotia points out that the cost of feed has jumped, with bran up 20 cents and barley meal up 25 cents. So the dairy farmer finds himself between the upper and nether millstones, with higher costs and lower prices for his butter.
I have dealt with the effect on the taxpayer. Now I am going to deal briefly with the reasons mentioned by the minister for no relief last year. I feel sorry to have to take time on this, but the minister went to considerable trouble to explain it and it seems to me I should not wholly disregard that part of his speech. Of course it would have saved a lot of trouble for both the

minister and myself as well as for you, Mr. Speaker, and all hon. members if the minister had stood by his first unintentional explanation, which as we all remember was loudly acclaimed on this side of the house. The minister began to give this explanation: "A tax reduction last year would have come too early to be of real value-" and at that point he was interrupted by loud and sustained applause from this side of the house. It was only after some little time, and after the ovation had subsided following this unintentional revelation of the truth, that he was able to add, "to be of real value to the public as a whole."
It is only fair to the minister to say that he gave a much more elaborate explanation than that. I am now going to give you that explanation. Mr. Speaker, and I am sure you will be greatly interested in it. As reported at page 1794 of Hansard he said this:
. . . large tax reductions last year would have come too early to be of real value to the public as a whole, because-
And this is good.
-the public's expenditure, even without tax reductions, was large enough to buy everything available.
I should like to mention this to some taxpayers I know, and to tell them that they ought to be comforted to know that there were people who could buy everything available. I know what they would say, but I do not think I should repeat it here. I think they would have been still more annoyed if they had known that the minister went on to say, as reported at page 1794 of Hansard:
To have reduced taxes then-
That is in 1948.
-in order to let people spend more would have been a delusion.
I can only say again-


Douglas Charles Abbott: Read that part about the private treasuries.


James MacKerras Macdonnell: 
John Thomas Hackett: On rainy days.


James MacKerras Macdonnell: On
rainy days, as the hon. member for Stanstead (Mr. Hackett) points out. What I want to point out is that even then battle was in the air. The minister had smelt the scent of the election battle. And when he used the phrase "keep our powder dry", of course what he was saying was, "we have got to keep this money available for next year."
Now we come to 1949. On the face of it, it is extremely similar to 1948-prosperity practically unprecedented. Of course that was the story in 1948. But the action is

The Budget-Mr. Macdonnell entirely different. As I told you, in 1948 we had to put away for a rainy day; we had to keep our powder dry. But now in 1949 there is little or no debt reduction. One important reason given by the minister was this. He says we have paid off $1,600 million in the last three years. In a sense I think that is true. I think it is probably quite accurate to say that we have paid off creditors to the extent of $1,600 million. But I want to point out, Mr. Speaker, that this reason, although apparently solid and sensible, is largely illusory when you come to examine into the thing.
There is, I believe, an old adage, which says "save at the spigot and let out at the bunghole." If you look into this matter further, you will find that while we were paying off our creditors with the one hand, we were busy making some $1,200 million of advances with the other. Where did those advances go? They went to the United Kingdom and to other European countries, and I am glad that they did. But I do not believe that there has been anything but a moderate reserve set up against them. I do not believe the minister, even in his most optimistic moments, would tell us that we are likely to get that amount back in any foreseeable time, because I am sure the minister would be only too glad if he thought we could import enough goods from those countries in the next few years to pay for the goods that we would like to sell them in those years, apart from getting a lot of goods to make up for the advances which we have made.
But, Mr. Speaker, it is really wasting your time to deal with these economic considerations because, as we know, the minister had other and more weighty reasons in his mind. Last year, after all, we had no election and we could have an economic slogan: Tax and tax, pile surplus on surplus. This year, with an election in prospect, we have a political slogan: Cut and cut, elect and elect.
Let me emphasize that we are not objecting to the reduction. What we are objecting to is that it was not given last year, and that it is saved up to the eve of an election for this highly improper purpose.
Before I leave this attractive subject I just want to indicate that really the minister finally comes around and makes it unanimous by agreeing with us, as I shall show you in just a moment. After all the hair-splitting and tight-rope walking, the minister finally slipped and fell into the real explanation which appears at page 1795 of Hansard. where he says this:
Finally, sir, I should say that I have been led to believe in recent months-


Note that, Mr. Speaker: in recent months. -as no doubt other hon. members have, that most of the Canadian people would support and even welcome an enlarged measure of tax reduction this year.
Fancy that, Mr. Speaker. He has learned that in recent months, he says. The only question I can ask is this: Where were his ears all those other months? The answer is, I think, that the minister must have a deaf ear and that he must have turned that deaf ear obstinately to the people who were trying to tell him the truth. So there, Mr. Speaker, you have it plain and flat. The minister joins us and makes it virtually unanimous: the election is the thing that unlocks his heart.
I have been dealing so far with what we will call the vote-catching technique of the government; but I do not believe that the voters of this country are going to decide how to cast their votes in the next election on the basis of any handout given at this time, a little of their own money given as an act of deathbed repentance. I do not believe that the voters of this country are like that. I think they are going to judge the government by its capacity to administer their affairs.


Mr. Grant:: That is just wishful thinking.


James MacKerras Macdonnell: The
doctor says: "That is just wishful thinking." He apparently would not like to have that test applied.
The minister told us in that little modest outburst the other night that the government had been skilful, intelligent and prudent. That is an interesting claim and we shall examine it. I think everyone will agree, Mr. Speaker, that while we can adopt several criteria, the best criterion of all would be to take the way they have dealt with trade, because after all trade affects us all. Even the minister, when he is off guard, admits that foreign trade is in a rather precarious position. The trade question is the greatest challenge that faces the government. I suppose we can say, to copy Mr. Micawber, that if foreign trade is good the result is happiness, but if foreign trade is bad the result is something not far from misery.
Let us see what the Minister of Finance said about foreign trade. First he referred to trade with the United States which he said was favourable. In a way it is, although I shall have something to say about it later. Speaking about our export trade he said, as reported at page 1787 of Hansard:
We cannot be satisfied with its present situation or immediate prospects.
Further on he said:
To the extent that . . . markets are closed to us, we must develop alternative outlets.

Again he said:
We must persevere in working out the constructive solution through trade agreements on a wide nondiscriminatory basis.
In one of the school plays I read I remember that somebody made a remark and the answering comment was, "good sentences and well pronounced." We can say that to the minister, but at the end of it I would feel like saying: "So what? What do you do about it?"
The Minister of Trade and Commerce (Mr. Howe) is a hearty fellow. He says that Canada is on top of the world. Our gross national product is up a billion dollars over 1948, and as a result of a survey by his department, barring earthquakes, serious labour management troubles, or a change in government, he adds prudently, Canada can be assured that 1949 will be as prosperous as was 1948.
The Minister of Finance has some fears about external trade, but apparently the Minister of Trade and Commerce has none. I must admit that his opinion is a little discounted by the fact that he did not seem to know that any payments received for exports to Europe last year were as a result of the Marshall plan. When he was asked about that he just said he did not know from what source the money came. That struck me as rather odd. I think I told him the other night that since he was the man who was selling our products he might well have taken a little more trouble to find out where the money was coming from.


Douglas Charles Abbott: He did not care so long as he got paid.


James MacKerras Macdonnell: Actually I think the minister did himself an injustice when he said that. I think he knew more than he admitted. I believe it was one of those careless statements he makes, because he does not take the house too seriously. He does not really think that he need take very much trouble to answer our questions. I can only say that I hope he will do better next time, if there is a next time, as I am reminded.
The Minister of Agriculture (Mr. Gardiner) had something to say about it. First of all he said in London:
I am convinced that the world is not in any state of mind where it can be expected to agree that the manipulation of any system or systems of currency is going to be allowed to interfere with the will of those who have empty stomachs.
That seemed a sort of down to earth statement. I hoped that the minister would follow through on it, but I was a bit disappointed, because speaking here in this house, and telling us about the agreements which had been made, he was rather complacent about the situation. Later on, again speaking about the converting of sterling into dollars and dollars
The Budget-Mr. Macdonnell into sterling, he seemed to indicate that he thought we could do nothing about it, though he admitted that it would cause a little trouble in marketing our products. In the end his only suggestion seemed to be that if our customers were in difficulty we could go on financing them. Well, that is good. We have done a lot of it. It is an argument which I think every sensible man should keep his ear open to, but it does not seem to me to be any solution. It is only a palliative for the present situation.
Where does this leave the government? I suggest that we have had no real statement of the gravity of the situation. To do the Minister of Finance justice he hinted at it. Of course the Minister of Trade and Commerce just brushed it out entirely and there is no indication of any action. All we have are these vague phrases which we get from the Minister of Finance, amiable phrases, well meaning phrases, but no coming to grips with the matter. It seemed to me that the whole thing was reminiscent of a phrase which was in common use a good many years ago, and which some people who have the misfortune to be as old as I am can remember. I refer to a famous phrase attributed to the late Lord Oxford, "wait and see".
After these rather vague and milk-and-water statements, if I may say so, without causing offence to anyone, I should like to ask the house to listen to a rather fresh voice speaking from the outside world, speaking, as they used to say in the air force drill, loud and clear. This is a statement by the able correspondent of the Financial Post, and which is dated March 26. He says:
The harsh effects of economics are splitting the democratic world into two. As the United States. Canada, and their western Europe partners move closer together politically in the contract of the North Atlantic pact, there is an ever-widening economic gulf separating America and western Europe.
Ironically enough he says, in a way the Marshall plan has had the effect of demanding that they help themselves. He goes on to say:
So the friends across the Atlantic have been encouraged. if not indeed coerced, into minimizing their purchases for dollars and into increasing their trade with each other.
And again:
They're doing so well in enlarging trade among themselves . . . that they've . . . pulled down the currency curtain over the Atlantic.
He points out the difficulties which result from sterling being a high cost area. For example, he says that Britain pays thirty-two cents to thirty-four cents a pound in sterling for Argentine hides, against a price in the United States of twenty-four cents; that formerly Australia used to be Canada's third
2186	HOUSE OF
The Budget-Mr. Macdonnell largest outlet for newsprint, and that she is now required to buy Scandinavian newsprint at a price of $60 to $70 a ton above the Canadian price. That is all because of the exigencies of being in the sterling area. On the purchaser's side he points out that, whereas we used to buy nearly all our coffee in the sterling area, now, owing to the price differential, we have to buy it from the dollar area. Therefore the thing pyramids on itself and gets worse and worse. He also quotes the authoritative London Economist on this question of the high cost sterling area. This is what the Economist says:
Prices may be falling in the world markets, but the price of British imports continues to rise, because British purchases have been concentrated for currency reasons on the dearer markets.
Again he quotes from the Economist:
Britain in fact is in danger of becoming a permanent high cost importer.
After referring to one favourable factor, namely, that Britain is buying ninety million board feet of spruce in eastern Canada, which is a 50 per cent increase, he winds up by saying that on the whole the overwhelming evidence is unfavourable.
Then he asked this searching question, which I pass on with all the earnestness I can to the government: "Do we in Canada try to sit it out while our trade dries up before our eyes?" Again he asks, "How long can Britain and other non-dollar countries continue to hold their present currency levels?" And he answers, "Nobody knows."
Then he concludes with these challenging paragraphs:
The stimulus of Marshall aid Is driving Europe into its own trade shell, not out of it. Right now only a few are conscious of this danger and its fatal implications to multilateral world trade. Very soon the implications of this situation will dawn in the minds of millions of people in our North America whose livelihood and well-being depend upon the outcome.
Now, these blunt words, coming from a well-informed source, seem to me worthy of careful consideration, as against the rather veiled hints mixed up with Pollyanna optimism which is coming from the other side of the gangway. The Minister of Trade and Commerce (Mr. Howe), judged by his words, knows nothing except prosperity unlimited. And I would be much happier if he had not spoken in such an unlimitedly optimistic manner.
The Minister of Finance (Mr. Abbott) knows better, but he does not seem to do much except utter these amiable generalities.
I should like to bring this situation a little nearer home. Only the other day I spoke to a man who came from the West Indies just two or three months ago. This is what is happening in the West Indies-and it is not
[Mr. Macdonnell (Muskoka-Ontario).J

the least bit amusing. Our trade was something in the neighbourhood of $15 million before the war, and it grew during the war to nearly $60 million, because during the war we supplied them when nobody else could or would, and they came to look to our market. They liked us, and would like to continue trading with us. They have four and a half million people. But what is the situation? Our trade has now diminished to a beggarly $3 million, and even that is the result of a small concession given by the colonial office so that our Canadian products could go in there on a kind of token basis.
These are the illustrations I wish to give. They like our products and would like to trade with us, but they are in the grip of the sterling area. They want our flour, but they cannot have it. They have to take Australian flour. My friend ran into a businessman who was using Massey-Harris implements, and wanted more. At first he could not get them at all. Then he finally found a way of getting them. Where did he get them? He got them from Australia, not from Canada. Massey-Harris operates in Australia. He was not able to get them here.
As I said a moment ago, we have now got a slight concession, just a toe in the door. But while this sort of thing goes on the situation gets worse and worse.
Let me give one other illustration. In Port of Spain my friend went into a retail shop in which he found a man who said he wanted to sell Canadian shirts, but could not. He had to sell British shirts at 50 per cent higher because of the exigencies of exchange.
He visited the Dominican Republic, which is at the opposite extreme. The Dominican Republic is a hard-money area. As a matter of fact they look down on the Canadian dollar. They condescend to take the American dollar at par, but not our dollar. But the interesting thing there was in connection with apples. My friend found that apples cost 20 cents each. He asked whether any attempt had been made to get Canadian apples, or whether their sale had been pushed. He is an ex-Nova Scotian, and he pointed out that Nova Scotian apples were a glut. Upon asking whether anything had been done to push Canadian apples in the Dominican Republic the man with whom he was talking replied that he did not think so. In that I think that his informant was quite right, because I find that in the year 1948 apparently we sent only one hundred barrels of apples to the Dominican Republic.
In the face of this there is very little comfort to be had out of the minister's general statements-as I have read them. He says, "We cannot be satisfied with its present

situation or immediate prospects"; "we must develop alternate outlets"; "we must persevere in working out the constructive solution through trade agreements."
But all those generalities do not grapple with the main problem which is, as we know, restoring the convertibility of the pound. I am not going to resume the debate we already have had respecting the foreign exchange control board, but I do mention this point because it is most relevant. I say again, as I have said before, that on this the Minister of Finance is defeatist; and that until we have convertibility of the pound restored, which we hoped to accomplish two years ago, as will be recalled, all the other things are palliatives; and the longer the sterling area remains as the high-cost area, the worse the situation becomes.
I do not think it is an exaggeration to say that unless effective action is taken in that direction there is just no reason to believe that we can keep up our sales of products in western Europe at anything like their present level. Though the Minister of Trade and Commerce ignores it, our trade at present is maintained very largely by the Marshall plan.
Therefore I come back to this and when the minister boasts, as he does, about our rigid dollar, and all the government's skill in finding the ne plus ultra level at which to maintain it, I remind him that in order to maintain that he has had to establish quotas against the United States and other countries. In other words he has had to add fuel to the very flames he is trying to quench.
One other point. The minister talked a good deal about favourable trade with the United States-and that is all to the good. But do not let us forget that it is not on as firm a basis as we would like. In boom conditions all kinds of things "go." You can do business under boom conditions which cannot be done under other conditions. But there is a great deal of reason to believe that the boom is fading, and if that happens our markets will be affected in the United States. If that happens another need will arise about which we did our best to persuade the government during the debate on the foreign exchange control board. We will need to have American investments in this country, which have rescued us when we were in trouble several times before.
That brings me to what I said before about convertibility and about getting on toward freedom of exchange, and taking the steps which we urged upon the government to try to move the international monetary fund toward a broader base. I wish merely to repeat that the fundamental basis of the government's action is negative.
The Budget-Mr. Macdonnell
Happily not everyone is negative. We find that Hoffman, who is distributing Marshall aid, is not negative. He asserts that there should be realism in this matter, and Snyder of the United States treasury says the same thing. They take a constructive attitude. It seems to me a grand opportunity was offered to Canada, but up to the present time the government is not taking it. So I say I believe the government is failing to grapple with this situation, and that by its behaviour it is landing us in a mess.
I doubt very much whether the minister, or any other minister, will undertake to argue with the Canadian taxpayer that on the government's dealings, on their handling of the foreign trade situation, they are entitled to the votes of the Canadian electors at the next election. It would be easy to give other instances, but I do not propose to do so at this time.
Mr. Speaker, what are we to do in the face of a budget like this?


An hon. Member:: Vote for it.


James MacKerras Macdonnell: Are
we to approve of the fact that the government refused a tax reduction a year ago by reason of its election requirements and kept the taxpayers out of their money?
Are we to approve of the fact that in this budget the whole farming community has been denied any real relief, in spite of rising costs in connection with some of their necessities?
Are we to approve of the fact that nothing has been done for the very large class who are scrimping along in the low income brackets, who are non-income tax payers, and who, far from having relief under this budget, have their costs of living actually increased at the present time?
Are we to approve of the intellectual gymnastics of the Minister of Finance as we try to follow his explanation of when we reduce taxes and when we do not? Perhaps the best we can say of this is to use Churchill's phrase that "It is a riddle wrapped in a mystery inside an enigma."
I do not propose to confine my criticism to this or that point in the budget. My criticism is of the budget as a whole and of the government which approved it. What I criticize is the whole attitude of the government as shown by this budget which is full of inconsistencies and, what I think is worse, wanting in constructive power and equally wanting in the courage to face and grapple with the great dangers which face us.
It is the budget of an old and tired government which has produced rabbits successfully out of hats in the past and hopes that

The Budget-Mr. Coldwell now in extremis it can succeed in doing it again. But this time it is too late; I believe the hour has struck.
Mr. Speaker, I move, seconded by the hon. member for Calgary West (Mr. Smith):
That all the words after 'that" to the end of the question be struck out and that the following be substituted therefor:
"This house is of the opinion that the government does not possess the confidence of the country."


Major James William Coldwell: Mr. Speaker, before proceeding with my remarks on the budget itself I should like to join in congratulating the Minister of Finance (Mr. Abbott) upon the excellent way in which he delivered his budget statement. I think the house generally appreciated both the manner of its delivery and the style of the speech.
I want also to congratulate him upon having included in this budget a few elements of tax reduction which we have urged during the past years and which we feel were necessary and wise, particularly the raising of the income tax exemption levels in so far as they went.
I should like to thank the Minister of National Revenue (Mr. McCann) for the announcement he made this afternoon that farmers may now charge as a cost the value of what they pay their children for their labour. I think this should be allowed whether they pay or not, and I think also that a wife's labour should be considered. We have urged that in this house on many occasions during the last number of years.
As we moved in our amendment last year, as we felt then and as we do now, in view of the removal of controls, in view of high prices generally and high rentals for homes, then, as now, prevailing, we feel that the minister should have accepted the proposals made last year by the C.C.F. party-incidentally I would remind the official opposition that they were not supported at that time by the official opposition, either by vote or by speech-that the exemptions in the lower brackets should be raised to $1,250 for a single man and $2,500 for a married man. May I remind the official opposition that the reason we did that was the high cost of living, which in great part was due to their insistence upon the removal of the beneficial controls and subsidies which had been in effect during the war. Frankly, Mr. Speaker, my congratulations are going to end there.
A careful reading of the budget will show that the optimism regarding Canada's economic outlook which was expressed by the minister is, we think, not justified. Indeed a careful study of his speech will show that the minister does not really share the optimism which he expressed in this house the other evening. In neither present conditions,
fMr. Macdonnell (Muskoka-Ontario).]

nor the outlook for our country's economy, nor indeed the over-all nature of the budget proposals, is there anything about which this house or the people of Canada can really cheer.
Last year I said that the annual budget presented to parliament should be more than a mere outline of the government's receipts and expenditures. It should be a survey of our national economy, explaining present difficulties and pointing to dangers that may be appearing on the horizon. Having done that it should lay the basis for economic prosperity and progress in the years that follow.
We consider that at the present stage of development a national budget should include a national plan for the maintenance of full production and high employment. It should include provisions to enable the distribution of goods and services to, and their enjoyment by, all our people in a manner which would be both just to the producer and fair to the consumer. At this time it should also lay the basis for that comprehensive and integrated system of social security which the Canadian people need, but lack.
The present budget does none of these things. It seems to have been based, as has already been said, on a survey of the electoral needs of the Liberal party. It certainly is not based on a survey of the economic and social needs of the Canadian people. In short, it is a traditional, political, capitalist budget which makes a few concessions to the lower income group since they have many votes. But the main benefits of the budget go to the well-to-do who will gain most by the kind of tax reduction which the minister announced. In addition, the wealthy investors are given appreciable benefits by the concession on the taxation of dividends. It should be noted that the only indirect taxes removed are those on luxuries, such as the excise tax on jewelry and so on.
The burden of the hidden eight per cent sales tax which hits the farmer and the poorest section of our population the hardest is again left untouched. I remind the government that when the sales tax was raised in the 1930's by a Conservative government the Liberal party was bitter in its criticism of what some of their leading critics described as a most pernicious tax. This afternoon we listened to the leading critic of the Progressive Conservative party denouncing a tax which his party used to excess during the 1930's.
It is therefore significant that when the Liberal party is in power it maintains the highest sales tax ever known in the history of the country. Indeed the budget shows an alarming tendency to rely more and more on

hidden and regressive tax measures such as the sales tax. With complete frankness the minister admitted that in pursuing this course he was following the line of least resistance. As reported on page 1795 of Hansard, the minister expressed the belief that the income tax on individuals was the fairest and best tax to have. He then went on to say that the public does not like a level of income tax sufficient to meet our requirements so he was retaining substantial taxes on goods and services and taxes on corporate profits. In other words, because most of the public are unaware of the onerous nature of hidden taxes such as the sales tax they can be retained as a principal source of our country's revenue.
Those are not courageous nor are they admirable reasons for a wrong social policy. I think it is the duty of this party to protest and to enlighten the people of Canada on every possible occasion regarding the heavy burden borne by the poorest section of our population because of this sales tax. Finally there is conclusive evidence in the budget that the government has abandoned all pretence of planning for the future. The demands of big business, voiced in the house so largely by the Progressive Conservative party, and by powerful sections of the press which support them, have had an effect. Nearly all beneficial controls and subsidies are off. Profits are to govern unchecked. The future and well-being of our people are back in the clutches of monopolistic industry and finance. The lesson of the past is forgotten so that, if we face the possibility of an economic breakdown, there remain no plans or machinery to halt it should it come. Surely no one will deny that there are many great and urgent problems facing Canada today, and it is the duty of the Minister of Finance (Mr. Abbott) in his budget to deal with them as best he can through that medium.
The time at my disposal is limited, but I wish to discuss at least four of our major economic problems. They are first, and perhaps the most pressing, the present and possibly future loss of many of our export markets, particularly for our agricultural and natural products; second, the prospect of a not too distant collapse of our capital expansion boom with the consequent threat of another serious depression, and unemployment; third, a general falling off in the standards of living, of which I shall endeavour to provide some instances; fourth, the disastrous effects of high prices and inflation over a period of years on pensioners and others living on relatively fixed and low incomes.
To take them in turn and indicate the magnitude of the problems which should be tackled without further delay, I want to 29087-1391
The Budget-Mr. Coldwell refer first to the precarious position of our export markets. In the early part of his speech the Minister of Finance spoke of "the three major catastrophes, war, crop failure and widespread industrial stoppages." Let me add to the list another major disaster which may occur, namely, the situation which will result if we fail to reverse the present trend in the overseas marketing of our agricultural and natural products.
The minister is budgeting for a surplus of $87 million this year. Yet at the same time he suggests that we may need more than $200 million to finance our exports, an amount which I cannot find in his budget. He further suggests that we may have to borrow money in the fiscal year beginning tomorrow because his cash surplus of $202 million may not be enough to meet the country's needs. This is certainly a reversal of the principles laid down in the minister's budget speech of last year. Then we were told that the government was following a policy of cyclical budgeting under which substantial surpluses could be accumulated in good times to meet a possible deficit in bad times.
I know, of course, that the Progressive Conservative party has urged the minister time and time again, in season and out of season, to get rid of the surplus, and to stop preparing for a rainy day. Apparently they have convinced him that this is a good policy for an election year, although I was very interested this afternoon to hear their critic taking exactly the opposite point of view.
In order to maintain our overseas markets for the huge surpluses which we cannot consume in this country, we must do everything possible to encourage imports from countries which are our traditional customers, and particularly from the United Kingdom. Such a policy is certainly essential for the welfare of Canadian agriculture, and the C.C.F. will urge it and support it to the fullest extent. The government is now pinning its hopes for trade on a return to multilateral trading. That is a fine ideal, but the world economic-situation makes its attainment impossible at the present time. It is, therefore, not a practical trade policy for Canada at this moment. As long as convertibility of currencies remains impossible, Canada must maintain any volume of trade by adopting the forms of trading relationships which her customers require.
This means that bilateral agreements by our country are necessary to maintain our volume of trade. Our best customers are planning their trade through long-term agreements and bulk purchases by government agencies, merely because the world situation is such that they must do that in

The Budget-Mr. Coldwell order to get the supplies that they need. Of course this is a new pattern of world trade made necessary by present conditions, and we should not permit doctrinaire adherence to unworkable ideas to retard the prosperity of Canada's basic industries. That is exactly what I feel the government is doing in regard to trade.
Let me say that whenever convertibility is possible again I believe that an attempt should be made to promote world-wide trading relationships as freely as possible. But we are not within reach of convertibility. In the meantime, therefore, I believe we must do all in our power to build a larger and more balanced trade with the sterling bloc, and particularly with the country which has been our best customer for years, the United Kingdom. Is the government doing this? On the 18th of May last the Minister of Finance announced the extension of British preferential duties on cotton and rayon piecegoods to June 30, 1949. I want to quote a sentence from what he said at that time. It reads:
There will be an opportunity to review this whole matter on the basis of results achieved before that date.
But in his budget speech ten days ago, while the minister said, "I am not proposing any tariff changes at the present time," yet in his very next sentence he announced that he was not asking parliament "to extend the special temporary provisions regarding the duties on cotton and rayon piecegoods. These will expire on July 1, 1949." Surely this involves a very important tariff change because the removal of the British preference becomes effective on the first of July of the current year.


Douglas Charles Abbott: It was only for a year; it expires on the 30th June.


Major James William Coldwell: I know. The reasons for this action are not at all convincing. He tells us that the yardage of British cotton goods imported in 1948 was more than four times that imported in 1947. Surely this indicates that good progress was made during the past year, but in spite of that the British quota for textiles was not reached. Under the circumstances it would seem to be prudent to extend the special arrangements for another year to encourage the further expansion of British exports to Canada in order that they can obtain the necessary dollars with which to buy Canadian products. I repeat that such a policy is essential to Canadian agriculture. Yet what does the government do? It cancels the special encouragement to Great Britain and then goes on to increase the quotas generally giving other countries a larger share of the market before our best customer for agricultural products has had an ade-
IMr. Coldwell.]

quate opportunity to re-establish herself in this, her long-term pre-war market. I suggest a further extension be granted.
I believe that the government should also investigate spreads in prices of British goods after they reach Canada. There has been a great deal of criticism of the high prices of British textiles in Canada. We have been informed by people who were there that in Winnipeg a British trade representative stated that a woman's suit, available from the manufacturer in England for $45-I presume that would be made from utility cloth -costs the Canadian consumer $125 when laid down in this country. That is something which, if true, should be looked into. If spreads of this sort are permitted it is no wonder British textiles are expensive in Canada.
Then I should like to say one further word about trade. The European recovery program will not last forever. That is noted in the budget speech, of course. What will Canada do when ERP ends; or indeed-and I am sure the Minister of Agriculture (Mr. Gardiner) is anxious about this-if the United States should declare wheat a surplus commodity? We may be protected for a year or so, but after that, what? That is what we who represent prairie constituencies are asking ourselves. So I say it is parliament's responsibility, indeed the government's responsibility because it must give the house leadership, to prepare now for any of these eventualities and not wait until 1952. But the budget presents no proposals to meet any of these difficulties should they arise. [DOT]
The next major problem to which I wish to direct attention is the government's failure to do anything to control the capital expansion boom. In 1945 some five per cent of our gross national expenditure was devoted to capital investment. In 1948 this figure rose to twenty per cent. A high level of capital investment is desirable at times, but we need to examine closely the kind of expansion that has been taking place in the past year or so. There is a desperate need for housing, though the Minister of Reconstruction and Supply (Mr. Winters) was quoted in the Montreal Gazette of Tuesday last as declaring that there is no housing emergency in Canada. Let me remind him that there are few people in Canada whose incomes are sufficient to buy or rent a house valued at $15,000 or to pay, as you must in this city, $100 a month or more for an unfurnished one or two bedroom apartment in an apartment block. I notice one of the ministers pointing to himself and indicating that is what he is paying. In that case he should have some sympathy for the plea I am making. The minister of reconstruction

had better not repeat his statement of last Tuesday or he will undo for the Liberal party everything they evidently expect to gain by the introduction of this budget.
Most people are fully aware that the need for housing constitutes a real national emergency and a threat, I may remind the Minister of National Health and Welfare (Mr. Martin), to national health and welfare in this country. What we need, Mr. Speaker, is a low-rental housing plan; and in spite of the opposition of the Prime Minister (Mr. St. Laurent) to subsidized housing, reported a year ago, we shall have to provide it. I can assure you that if the people of Canada elected a C.C.F. government we would undertake it immediately.
Housing is needed, too, in our rural areas. This was brought out on March 17, when in reply to a question asked by the hon. member for Melfort (Mr. Wright) the house was told that section 15 of the National Housing Act, which was designed to benefit rural housing, had not been put into effect because of the "continued scarcity of certain building materials." What an excuse that is when in every city across Canada, including this city, we have seen the construction of theatres, breweries, bowling alleys, and commercial construction of all kinds. The shortages that have denied decent homes to our farmers and other people are caused by the building boom in luxury homes and commercial enterprises. Earlier in the session we were told, in answer to a question by the hon. member for Mackenzie (Mr. Nicholson), that up to the end of 1948 only one farm home had been built under the National Housing Act. The government policy, too, has permitted industry to centralize itself more completely in Ontario and Quebec at the expense of the west and of the maritime provinces. The government should have stipulated-and incidentally they did this in the United Kingdom- "No breweries, no theatres, no luxury building, no unnecessary commercial expansion will be permitted until we have made substantial progress in solving the housing problem and have built hospitals, schools and other badly needed public facilities." By the system of priorities in effect during the war something similar was done quite successfully and could have been continued while this grave national housing emergency lasted.
This is an example of what we mean when we say that both the government and the official opposition put profits ahead of human need as the guiding principle of their economic policies. Direction must be given by a national investment board, too, responsible to parliament; for fluctuations in capital investment over a period of years will spell disaster for the nation once again if it proceeds along
The Budget-Mr. Coldxoell the lines we have seen during the past year or two.
I wonder if the minister realizes that during his budget speech he referred twelve times- I counted them-to the "uncertainties," the "difficulties" and so on which face Canada in the near future. It is interesting to note that he used the word "uncertainties" five times in the course of his remarks. I have already drawn attention to some of these uncertainties. The Canadian Statistical Review tor February, 1949, pointed to the decline in real consumption by the consumers of this country in 1948. A month ago I asked for the per capita expenditure on consumer goods and services in each of a number of years, based on the dollar valued at its pre-war level, because this seemed to me to be the best possible index of the trend in the overall standard of living of this country. What do the figures show? They show that the real consumption per capita dropped by four per cent from $521 to $501 in terms of pre-war dollar value, as between 1947 and 1948. The minister spoke of producing a record quantity of consumer goods, but the figures show that, if we are producing more, we are consuming less. Surely this should be the red light indicating that we are not able to distribute that record production among our people. It indicates the failure of Canadian capitalism once again.
. During the past three years average wages have followed the cost of living-and I say "followed" and I mean "followed"-fairly closely; but the position of pensioners and persons on fixed incomes has sunk. Old age pensioners, for example, in spite of increases by both the federal and provincial governments, today have a value of not more than 95 cents expressed in the value of the 1945 dollar; but according to government statistics corporation profits have actually risen 75 pec cent since 1945.
There has been much discussion regarding: the factors which have caused the enormous-price increases since 1945. Let me point this out. Of the total charged by business for things produced in Canada, twelve per cent consists of corporation profits and ten per cent of indirect taxes. In other words, twenty-two per cent or almost one-quarter of prices is made up of profits and indirect taxes. Who benefits most from such an unjust balance in the economy? Certainly not the farmer; certainly not the consumer; certainly not the great masses of the people. Yet in face of this, excess profits taxes have been abolished.
In 1947 the minister said that profits before taxes were running at an abnormally high level and he added that, if business conditions were normal, competition and bargaining would reduce profits to normal levels, and.

The Budget-Mr. Coldweil under those circumstances repeal of the excess profits taxes would be justified. The tax was repealed in spite of rising profits in the economy. At that time, in 1946, profits stood at $1,421 million. Now the latest figures for 1948 show corporation profits at $2,174 million. This figure, incidentally, can be found in the appendix to the minister's own budget. The same figures indicate that the profits after taxes are up thirty-three per cent from one year ago. If profits were abnormally high in 1947, what are they now?


Edward George McCullough: They are fantastically high now.


Major James William Coldwell: There has been neither competition nor bargaining to reduce them. They are the results of monopoly and certain shortages. Let me remind the house that the C.C.F. was alone in demanding the retention of the excess profits tax. Had it been kept, greater social services or greater tax reductions would have been possible now.
Now of course the Progressive Conservatives are expressing their opposition to a small increase in the tax rate of corporation profits which have been raised on amounts of over $10,000 but only affect profits over $77,000. The minister boasted that the income [DOT].tax had been reduced by $177 million since 1945, but he reduced the excess profits tax Sby $466 million when it was discontinued.
The hon. member for Muskoka-Ontario *(Mr. Macdonnell) read part of a letter. I should like to read a letter I received the *other day. I think it is a good statement of the effect of this budget and of government ipoldcy on pensioners and persons with fixed tow incomes. This is what the writer says:
Am writing you to register a strong protest against the budget just brought down.
I am retired and consider myself lucky to have a small pension of $45 per month. There are, however, thousands of Canadians who get less than that and no doubt thousands more who get none at all and who have to depend on their meagre savings to see them through until they attain the old age pension age.
It was with eager anticipation that we waited to hear the details of the budget, hoping against hope that we would hear of some tax relief for our forgotten group, such as the removal of that iniquitous 8 per cent sales tax, elimination of the postage tax (we write a lot of letters) and the tax on tobacco (most of the men smoke even if we can't afford to). What a disappointment we got, when the details were finally revealed. There was not one single item of relief to us in the entire budget. In fact we are worse off than ever, as the price of bread has now gone up, on account of subsidy on wheat toeing removed.
While it is appreciated that the lower income taxes will benefit the small wage earner, it does us no good as we never had any income tax to pay. Then the luxury tax! Can you imagine any of us buying these items? Tax on railway fares, et cetera, mean nothing to us, nor does removal of taxes on soft drinks, chewing gum and candy bars, as we *cannot spend any of our small pittances on such as that.

It is hoped that I have made myself clear. I could not resist the impulse to write you ... I might add that we are looking forward to the coming elections.
Last year I described the budget as a "vinegar" budget. This year it has already been referred to as a "slot machine" budget. Besides the fact that the minister had seen fit to reduce the tax on slot machines, the whole procedure of taxes and tax reduction indeed looks like a slot machine. For ten years all Canadians have been playing the game of putting so much in the federal treasury in taxes, while cabinet ministers have said that some time we might get something back. But when the day came, as in all slot machine operations, some gained and some lost; and those who lost were like my friend the pensioner, whose income is so small that he did not receive enough to pay a tax, even on the level of low exemptions. But they have to buy bread like millions of others; they cannot get along without it.
I wish therefore, Mr. Speaker, to move a subamendment to the amendment already moved. Seconded by the hon. member for Vancouver East (Mr. Maclnnis), I move:
That the amendment be amended by inserting therein, after the words "this house", the following words:
"regrets (a) the failure of the government to remove the sales tax; (b) the action of the government in removing the subsidy on flour milled for domestic purposes, thus adding to the cost of living, and (c) the failure of the government, despite rising national income, to make any provision to improve the living standards of the millions of Canadian people compelled to live on income below the income tax exemption levels, and therefore . . .
And so on.
When parliament endorses this budget, the increases in the price of flour will affect every farm home where bread is baked, and every city consumer who buys from a bread wagon. Today in this city an announcement was made that the price of bread would rise from one to three cents a loaf in a day or two.
For years the western farmers subsidized the bread of this country. That subsidization was an imposition upon the wheat grower. Then for a brief period the government took over the subsidy and subsidized it. Now both the farmer in his consumption of flour and the people in their purchase of bread will be penalized.
If we examine the income tax changes, we find that they are not as generous as they appear to be on the surface. The minister said, as reported at page 1796 of Hansard:
Tonight I propose still further substantial reductions in this tax-
That is income tax.
-in the form of both reduced rates and Increased exemptions.

Everyone knows that increased exemptions have the effect of reducing taxes for all who pay income tax. But the budget does not reduce the rates in all brackets.
Last year the lowest rate was ten per cent. This year it is fifteen per cent. Actually the government has failed to give the first $500 of taxable income the consideration it received last year. I would appeal to the government to reconsider that matter and to make the tax as it was in that respect last year.
At the end of his budget the minister dealt with the Liberal record in the present parliament. He made a pre-election speech. A careful scrutiny of the Liberal record will show that the greatest tax relief has gone to big business-not this year but throughout the years-which is enjoying record-breaking profits, as I have already said-up seventy-five per cent in three years.
The least help in the way of tax relief has been given to those on low incomes-those who have been hurt most by the increased cost of living in which indirect taxes, the sales tax and the dropping of beneficial subsidies and controls have played an important part.
In the field of government expenditures, we note that old age pensions, family allowances, veterans' pensions and so on have not kept pace with the diminishing value of the Canadian dollar. No prevision has been made for health insurance, and the lack of a sizeable surplus prediction exposes the fact that the government has no intention of doing anything further about this problem in the foreseeable future.
I have no doubt that we shall hear health insurance promised again in the forthcoming election, just as it has been in every election since 1919, when it first appeared in the Liberal platform. The people should not forget that we have had thirty years of promises and little action. That is the Liberal record in this respect.
I have no time to go into the Conservative record which, with all their present promises, is a record of opposition to many of the social services that we now have in effect.
In his budget the minister said we are getting back to normal levels of tax revenue. If this is true and the budget speech indicated uncertainties, and indeed the end of the present boom, it becomes clear that no major increases in social service benefits or indeed for national defence, if we require it, will now be possible without increased taxes in the future.
Hence I assume that no matter what the Minister of National Health and Welfare may have promised, the Department of Finance has decided it shall not be fulfilled.
The Budget-Mr. Coldwell
No provision is made for subsidized housing. We can subsidize gold but not housing, milk or bread. What a strange sense of values is indicated in the government policy.
In conclusion, Mr. Speaker, may I say that while we welcome the few good features in the budget, we look beneath the surface and, seeing what is there, we must condemn the policy behind it.
Before I take my seat may I repeat that the Canadian economy, vulnerable in so many respects, is not helped by this budget. The farmers, and the people engaged in the production of natural products who must find markets overseas, will find little hope in this budget for them. The withdrawal in some respects of the slight advantages which have been given to the United Kingdom at the present time is a further barrier against the sale of our apples, of our salmon, and of our natural products. In almost every field in which the producer who works with natural products is concerned, grave unsolved problems confront us. Therefore I say that we of the C.C.F. must condemn the policy presented to this parliament in the 1949 budget.


Mr. Solon E. Low (Peace River):: Before I launch into a discussion of the budget I should like to direct a complimentary word to the lady member for Qu'Appelle (Mrs. Strum) on bringing into this house this afternoon some much needed colour. We like her new Easter bonnet.
Just a word or two, Mr. Speaker, relative to the subamendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell). It is almost identical with the type of amendment or subamendment which we would have moved had it been possible for us so to do, and naturally we shall support the subamendment.
During the past two months since parliament opened I have sat and listened to the proceedings with a great deal of interest, and I came almost to the conclusion that the Tories had caught the Whigs in swimming and had made off with their clothes; but the night of March 22 was a great night for the Whig team. Ernest Thayer would doubtless have described the scene in this house that evening in this manner:
There was ease in Abbott's manner as he stepped into his place,
There was pride in Abbott's bearing and a smile on Abbott's face;
And when responding to the cheers he lightly doffed his hat,
No stranger in the house could doubt 'twas Abbott at the bat.
Perhaps the resemblance to the famous Casey ceases at that point; perhaps it does not, but at any rate I should like to congratulate the hon. gentleman on the very healthy cuts he made at the ball, even if

The Budget-Mr. Low
there are many people who thought that he took three healthy swings and struck out. My personal opinion is that he was pretty much out of practice this time. He had two strikes against him already. In my judgment, had he tried a few cuts at the ball last year the chances are that he would have had his eye on it this time and he would probably have belted a home run and probably would have brought his whole team home to score. About the best that I can say now is that he might possibly steal home as a result of a pop fly and a couple of errors.
It is possible that this will be the last budget to be presented by the hon. member for St. Antoine-Westmount. I did not say that it is probable, mind you; I say it is possible. For that reason I am going to be just as generous as I possibly can in dealing with it. Most certain it is that the reversal from the previous policy of the minister proclaims in pretty loud language that this will be the last budget in this very interesting and historic twentieth parliament.
I approve the new trend of the budget, the new look. It provides some basis to hope that the Liberal government is beginning to yield to the insistent demands of the people for the results that the people are entitled to and that they want from the management of their affairs by their government.
We of the Social Credit group, Mr. Speaker, sincerely hope and trust that before this parliament is prorogued the trend that I have noted and mentioned will find a much more complete realization than it has found thus far in the budget itself.
I do not share the horror which has been described by some hon. members on this side of the house as having seized them because the new desirable trend in the budget stamps it quite positively as a pre-election budget. I declare that that trend is long overdue. This twentieth parliament, sir, is now in its fifth session. In each of the four preceding sessions this Social Credit group, which I have the honour to lead in this house, has consistently placed on record its criticisms of current budgets. In every single instance we have offered constructive alternatives to the proposals of the Minister of Finance. Had our proposals been heeded by the administration, then the needs of the electors of this country would long since have been recognized and satisfied to a degree far exceeding the limited, I say very limited, recognition that the Minister of Finance placed before us on Tuesday evening, March 22.
Our proposals are on record in Hansard session after session of this twentieth parliament. They are on record in Hansards of the nineteenth parliament, the eighteenth parlia-

ment and the parliaments ever since 1935 when my friend, the hon. member for Lethbridge (Mr. Blackmore), valiantly led this group. In all that time there is not on record a single attempt, much less a successful one, to establish by logic and reason, on a basis of fact, that effect could not be given to what we proposed in the way of financial reform calculated to bring relief to the electors in a measure far outstripping anything that has now been proposed by the Minister of Finance (Mr. Abbott).
Our proposal for a national dividend, for compensated price discounts and tax reduction is on record again this session in the debate in reply to the speech from the throne. But that does not mean that we are not delighted that at long last a move is being made in the right direction. And, what is more, we take quite keen satisfaction in what is implied by the fact that this change of granite ministerial heart comes to the administration as they have to face the electors in an election.
Why should there be satisfaction on our part in this? I will tell you why. In no nation in the world has integral democracy yet been realized. By that I mean democracy in politics, in economics and in social institutions. To some degree we admit that we in Canada do enjoy political democracy. We are lucky in that, too; because during the past few years we witnessed the collapse in nation after nation in Europe of even that degree of democracy which we now enjoy.
That is why I say it is heartening to have in the minister's budget something of tangible evidence that here in Canada the people still have some hold on the process by which they can demand results from those who administer public affairs in the federal field. To the extent that that is manifest in this budget and elsewhere, to that extent we rejoice in what remains to us of government of the people, for the people and by the people.
It seems to me there ought to be a lesson in this for the Canadian people. It should occur to them that if governments and representatives are prepared to listen to orders at a time when those representatives have to face the electors in a general election, then the people ought to find some way of estab-. lishing constant effective control over their government and over their representatives, so that they will listen to orders all the time.
Social Credit philosophy emphasizes the need for that kind of effective control by the people; and Social Credit policy provides just that. When that policy is applied in our national life we will have established in Canada true political democracy. Our progress can then be real and constant, instead

of spasmodic as it is today. We can then establish economic democracy; and I say we cannot until that time comes.
I think a taste of what was awaiting the Liberal administration, and what may yet be facing that administration, came from the people in the Ontario provincial elections last year. The Liberal party took a beating then. And the vote in that election as well as that in several by-elections since was a vigorous protest against last session's budget presented by Casey when the second strike was called against him.
I congratulate that group of six or more Liberal members, including those from Waterloo North (Mr. Breithaupt) and the then member for Algoma East, and others, on bringing in a quite forceful manner to the Minister of Finance the facts of the situation as they then obtained. I feel sure their protests, along with some others, perhaps contributed in some measure to the change of heart we have witnessed in the past year.
That is all to the good, of course. I was pleased, too, to hear quite a number of members on the government side of the house during the recent debate in reply to the speech from the throne bringing home to the Minister of Finance the needs of this time-although I must admit that I wondered why they waited until this late date to voice their demands on behalf of the people. I think all members in all parties, singly or in groups, should not hesitate to take every honourable means within their power to bring home to the government the needs of the Canadian people at any time.
I hope I can count on groups on this side of the house, as well as on the other side, and even upon the minister himself, to sponsor some of the proposals I shall make today as a result of my study of the minister's budget. In my contribution to the budget debate of 1948 I commented upon and protested against a tradition which had grown up through the years, through all the parliaments since confederation. I regret that this tradition seems to have fastened itself upon the house. May I repeat that protest now.
I refer to the assumption that a budget, once it is presented to the house, is immutable and unchangeable, and that the prestige of the administration is bound up in the observance of that tradition. I believe that is not a good condition for Canada. No minister of finance can possibly be great that way. If the minister and the government were willing to accept sound proposals for changes calculated to bring greater good and happiness to a much larger number of Canadian people, then they would rise to a degree of greatness rarely achieved by ministers of
The Budget-Mr. Low finance in the history of the world. I do not care from what side of the house such proposals come, so long as they are calculated to bring greater good to a greater number of Canadian people. If they are good, then I believe the minister and the administration ought to be ready to enact them.
Relative to this point, it was with considerable satisfaction that I heard the minister's comment when he was speaking of the difficult problems he faced in finding an equitable method of dealing with the taxation of long accumulated surpluses of family corporations. His reference, as reported at page 1800 of Hansard, is in these words:
I am not prepared to make specific proposals for enactment at this session of parliament. I hope that there may be an opportunity of having a plan of the type mentioned discussed when we are in committee.
I take it from what the minister has said that if an accessible plan is forthcoming as a result of those discussions in committee, no matter from what side of the house it comes, it will be enacted at this session. To do so, I suggest, would be a most desirable expression of confidence in parliament as a whole, something new and refreshing that would raise the prestige of parliament as an institution. Particularly would this be so if the spirit to which I have referred, to a reasonable and sensible degree, would underlie the presentation of all proposed enactments, no matter from what side they may come.
We are too prone to be bound by party traditions, and it is not good. With this in mind I ask now to turn to a discussion of certain specific items in the budget, and more particularly to some which are not included. I cannot deal with all of them. The budget is a comprehensive review, and necessarily I must limit myself to certain specific items. My colleagues, I take it, will deal with other matters which I do not mention.
I would say that no measure is likely to contribute more to a realization of general proposals made in the speech from the throne than enactments proposed in the budget speech. In this session therefore I think it should be expected that the budget, more than anything else, would pave the way to a realization of that very commendable and desirable objective set out in His Excellency's speech from the throne, where he said:
It is the view of my ministers that a steady advance towards the goal of social justice for all is an effective safeguard against the influence of subversive doctrines.
That is a most worthy statement of objective. We Social Crediters prefer to call for social justice to each and to all. I think that in those circumstances where justice is said to be provided for all that the forgotten man must most endure.

The Budget-Mr. Low It seems to me that the feature of this budget is limited increases in exemptions from income tax and still more limited reductions in rates. We all appreciate these things very much, but as the hon. member for Muskoka-Ontario (Mr. Macdonnell) has said, it is merely giving back something that has been taken away by highway robbery methods. We realize that communists in this country would call the minister's budget a bourgeoisie budget, and I think that was emphasized somewhat by the hon. member for Rosetown-Biggar (Mr. Coldwell). We believe that it is very wide of the mark in bringing to realization the proposed objective in the throne speech, namely, to safeguard against the influence of subversive doctrines by extending social justice to all. Let me remind the government that communism thrives on setting up the proletariat against the bourgeoisie, on contrasting the condition of the labouring, producing, underfed, forgotten, low-income peoples, the classes that were never able to secure or to earn enough to be included in any income tax bracket, the all too numerous classes in this country, with the idle bourgeoisie. This budget plays right into the hands of the communists and the lines of their propaganda.
Not one particle of consideration is to be found for the poor among the poor, for the labourer, for the farmer; all the consideration seems to be for the middle and upper income groups. Why in the name of common sense does the Minister of Finance continue to impose the heavy burden of the eight per cent sales tax, a tax which is imposed at the manufacturer's level and which bears so heavily against the poor? There is no relief for them whatever. Year after year we in this group have fought this uneconomical and undesirable tax because we know that it pyramids costs so much that it burdens the consumer beyond his endurance.
Sales and other hidden taxes increase the cost of living and force the workers of this country to demand increased pay. That in turn results in further increases in the cost of production and pushes up the everlasting spiral of the cost of living. The minister expects that he will get from the sales tax something like $400 million in round figures, but I venture the assertion that it will cost the consumers of Canada not less than $600 million. That works out at the rate of $50 for every man, woman or child or $200 for the average family of four. I realize of course that every family of four would not pay that much through this hidden tax because the poorer families are so limited in the volume of what they can purchase. However, it is a burden on these poor people out of all proportion to the burden upon any other income group.

We declare that the lower income groups in our country must be given relief at this session if this parliament is to give any substantial recognition to the idea of social justice for all as an effective safeguard against the influence of subversive doctrines.
The sales tax could and should have been abolished last year. The Minister of Finance in his budget speech attempted to build up a good argument to show that it would have been unwise to have given substantial tax reductions last year. The main burden of his argument was that the supply situation then was such as to make reductions in 1948 a dangerous thing. But the sales tax was one impost that could have been removed last year without the slightest danger, even with the supply situation as it was. The removal of the sales tax by the government would have made possible very substantial reductions in the cost of living to people in all income groups. The inflationary pressures would therefore have been eased somewhat. I feel perfectly sure that the minister cannot refute that statement.
This year of course several methods of giving relief to the Canadian people presented themselves to the mind of the minister and no doubt they combated strongly in his mind for preference. The minister could very well have given the same increases in exemptions as are provided in the budget. But if instead of the reductions in the rates that remained he had slashed into the sales tax he would have succeeded in giving fair relief to all income groups in our society without in any way endangering his budgetary position. I repeat most emphatically that by so doing he could have given material assistance to a most needed reduction in the over-all cost of living. I do not intend to burden this point here because I have mentioned it in several speeches already during the session.
This is one most important omission which the people of this country are going to remember and that recollection may cost the minister and the government very dearly when they face the country at the forthcoming election. If the sales tax is not to be removed at this session, and even if it is, then justice demands that at least old age pensions be increased with the means test removed, and that some reasonable consideration be extended to the disabled. In addition, subsidies should be provided for items like bread and milk. Already the price of bread has increased in various communities across the country as a result of the removal of the subsidy on miller's wheat. Milk increased one cent per quart yesterday in a number of communities. We protest most vigorously against the removal of the subsidy on miller's wheat for Canadian consumption. It seems to us to be a queer kind of result from a

budget that seeks to disarm communist propaganda and to achieve the desirable objective of social justice to all.
I noted from the press last night that the minister of health announced changes in the family allowances. While that is all to the good, while it may be a forerunner of something more substantial, it is only a sop at the very outside to the great income group that is forgotten in this budget, and a belated one at that. However, it does give us hope that a new view has been taken by the minister and the administration that the budget is not immutable and unchangeable when it is brought before the house.
Before turning to other considerations, on behalf of the Social Credit group I want to register an unqualified protest against the principle of continuing the sales tax at the manufacturer's level. This protest applies also to the absurd procedure that was outlined in the budget the other night whereby the 25 per cent purchase tax on jewelry and related articles, which had been levied at the retail level, is now being moved back from that level to the manufacturer's level with the rate reduced from 25 per cent to 10 per cent. This procedure is nothing more or less than the converting of an ultimate purchaser's tax into a hidden sales tax. This will tend to establish as a fixture this type of taxation on many more things which Canadians have to buy. Let me assure the minister that my protest in this respect is not at all against the taxing of luxuries; it is simply that by hiding the taxes at the manufacturer's level we are extending the principle of hidden taxes which do push up prices and cause all sorts of difficult problems to arise in our economy.
I know that the minister will say that when these taxes are applied at the retail level every purchaser squawks each time a purchase is made. Doubtless he will have in mind the fact that governments are much more fond of taxes which enable them to pluck the goose painlessly. I sympathize with them, but I trust that when the minister concludes the budget debate he will either yield to the general demand of Canadians with respect to the sales tax being removed or have some more satisfactory explanation for retaining it, and its allied excise, processing and turnover taxes, than was outlined in his speech of last Tuesday, from which I should like to quote this small portion:
The public in peacetime will only tolerate a level of income tax that is far short of enough to yield the revenues that Canada requires now and is going to require in years to come.
In other words, the minister says to the poor man with reference to these hidden taxes, "You are too dumb to protest these
The Budget-Mr. Loiv taxes that you cannot see, and therefore you will just have to keep on paying them."
A careful study of the minister's speech reveals some interesting evidence of a departure from the rigid horse-and-cart economic and financial outlook that has been so common with most of his predecessors. I want to congratulate him most heartily on this new attitude, and I do so sincerely. Quite a number of the things that the minister said in his speech indicate that he has been giving some independent study to the very great and pressing problem of how to achieve an economy in which there is optimum production and optimum consumption, the two basic essentials of a strong, happy, united, and peaceful Canada. I think I am right in saying that he must have inclined an ear to some of the principles of the economics of abundance that Social Crediters have been propounding so consistently and so vigorously over the past fifteen years. Here is one evidence, to be found at page 1786 of Hansard:
It seems to me that the time has now come when our objective-
I want you to note that he says the time has now come. Why it had not come before is anybody's guess, but it would indicate that he had not realized that it should come.
-should be to sustain our present high levels of output, avoiding the evils of unemployment on the one hand and further inflation on the other . . . The best opinion I have been able to form leads me to believe that we can hold the current levels if we, and others in like position, act sensibly.
In other words, the minister realizes now that depressions result from wrong policies that have been made and followed by men. He thinks that there need not be a depression if we act sensibly. We agree with him one hundred per cent, but we believe that the minister will have to go much further yet and declare that, as long as he has direction of financial policy, he will use it and see to it that all forms of taxation and other restrictions that discourage and hold down the level of production of wanted goods and services will be removed; and secondly, that he will see to it that the supply of mass consumer purchasing power is maintained at a level that will ensure optimum consumption of the materials and services that we do produce. If he does those things, he will be acting sensibly. Moreover, he will be discharging the responsibilities of his high office as no other minister of finance in Canada ever has.
Again, on page 1789 of Hansard, column 2, the hon. gentleman is reported as saying:
In some cases, we can observe the occasional emergence of surpluses and of bargain sales by retailers, something which we had almost forgotten to be a normal part of business at certain seasons of the year.



NEWFOUNDLAND


Louis Stephen St-Laurent: May I take just a moment to remind all hon. members that the program for the ceremony of tomorrow appears in this afternoon's newspapers. It will commence at twelve o'clock sharp on parliament hill, at the main entrance of the centre block. It will consist of a broadcast of that part of the ceremony

The Budget-Mr. Mclvor which will take place in St. John's, to be followed immediately by brief addresses and by the first mallet strokes to carve the emblem of Newfoundland on the frontispiece of the arch of the peace tower. The whole ceremony is intended to last about three-quarters of an hour.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at seven-thirty o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. Daniel Mclvor (Fort William):: In rising to give my impressions of this budget, Mr. Speaker, may I say that some of the things I have heard said about it, by those who agreed and those who did not agree, reminded me of my early training. I came from a country where the people speak good English; in fact, some people think they speak the best English in the world in the city of Dublin. But whether that is true or not, when I came to this country I found it difficult to understand certain expressions of speech. Amongst the men in the boarding houses I heard expressions like "he's crazy"; "that makes me mad"; "I guess"; and "you bet"-and when the man did that, I did not see any stakes. When a man was said to be crazy, I did not see him looking any different from anybody else; and when he was mad, he was smoking his pipe of peace. I found that those were current expressions. I found another expression, namely, the word "some" in the expressions "he's some sport" and "he's some man". When I hear hon. members say that it is a bribery budget, I just take that as an expression of speech.
I do not think that hon. members think the Minister of Finance (Mr. Abbott) is guilty of bribery. But in the sense in which it is stated, I think I might use the expression of a great teacher: Let him that is without the sin of bribery cast the first stone. Any man who sends out a Hansard or anything he gets free from this government is guilty of bribery in some way.
The budget was said to be a political budget, and it is. It is a dandy. But it is doing nothing more than carrying out the wishes and meeting the needs of the people. I have not heard of anyone who wants to

have turned back again the exemptions that were granted to him. It is said to be an election budget, and it is. It is a dandy election budget. I do not know that any other party of any other complexion in this house could have done much better. Then, it is a popular budget because it helps everybody. I do not think there is anyone in Canada who is not exempt in this budget. It is a popular budget because it helps the man with the small income. A Winnipeg paper said that it has popularity written all over it. It was possible because of the courage, foresight and thrift of the past administration. They prepared for it. If the Minister of Finance were here, I would say "thanks" to him, for several reasons. If I did not say "thanks" to him I would lack gratitude and heart.
I sent the minister some telegrams and they meant something. I also sent him a good many letters telling him that I thought that the exemptions of the income tax payers should be raised; that the small businessman should certainly have far more consideration; that the business tax should be reduced; and that the whole range of nuisance taxes should be reduced. Three years ago I stood up in this house and stated that the jeweler's tax was not altogether fair because there were sold by jewelers necessities that should have been exempt even in wartime.
What has happened? When I say "thanks" to the minister I want to be able to prove my reason for doing it. In reply to these telegrams and letters which we and many others sent, we find that thirty-two per cent of the taxpayers, totaling 750,000, have been exempted altogether from tax-paying. Therefore we have a right to say "thanks". The next largest cut in taxation is with regard to soft drinks; $24-5 million has been lopped off the soft drinks. I am sure the boys and girls and some men and women all over Canada will say "thanks" to the minister. Those who pay for their sleepers will say "thanks" because of the reduction in the taxation on transportation, which is S17 - 9 million. The taxes of those who bite on a candy bar have been reduced by $16-6 million. Those of us all over Canada who have a sweet tooth say "thanks" to the minister. No doubt it is a popular budget. I wonder how the imagination of the opposition can carry them along to find many defects in this budget. I can admire them in their ingenuity and in their ability to twist the English language to suit their needs if they can make it anything other than a popular budget.
There are three things about this budget that stand out and that appeal to me. First, it will help to maintain a high level of employment-this is quite evident-and pros-

perity will continue. We have the word of the minister himself that prosperity will continue.


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: Is he a prophet or a son of a prophet?


Daniel (Dan) McIvor: Next spring, when the minister brings down his budget-


Some hon. Members:: Hear, hear.


Mr. Ross (Souris):: Which minister?


Mr. Speaker:: Order.


Daniel (Dan) McIvor: Anybody who thinks differently has not as good an imagination as I have.
The minister has prophesied before. We judge a man by what he does, by what he says and by what he produces. His former prophecies have been fairly close to the mark. The second thing that this budget shows is that trade is a basis for prosperity. It pledges the government to a maximum of trade with the whole world. It wants Canadians to buy more from the United Kingdom and to sell more to the United States. To any man who does not see logic in that policy, I say there is something fallacious about his thinking. It did show the reasonableness and the necessity of high taxation in a time of economic boom. That is the time for people to pay taxes and pay off their wartime debt. Last year the minister showed good sense in keeping money where it would help to reduce taxation and keep down inflation. Everybody knows, as I do, that picture shows and entertainment places of all descriptions have sprung up in different cities throughout Canada. Why? Because it paid; because working people had money to spend. Why is it that so much money is spent in Canada on the beer business? Because people have money in their pockets to spend. Therefore was it not quite reasonable for the minister to take off a slice of this money and help to pay off the war debt? I think high taxation is most commendable in prosperous times. Just think, $1 billion-I cannot imagine a billion of money. I know what twenty-five cents and $100 are; but when it gets up to a million it is hard for me to understand. I never saw a million in one place in my life. When it comes to one billion I just cannot comprehend it. The sum of $1,600 million war debt has been paid off since the war. That reduction took place since the wartime peak in taxation. The reduction in taxation amounted to $1,300 million. That is a wonderful feat to take place during the time when Canada was being changed over from war to peace industry, when men in the forces and men engaged in war work had to be transferred into peacetime industry. It is an outstanding
The Budget-Mr. Mclvor feat of the government and it is certainly commendable. I shall use the first slang word I used after coming to this country. It is certainly "some" budget.
I have two or three suggestions to make to the minister for his next budget. First, the mining industry of northern Ontario needs some consideration. Whether it should come in the form of a reduction in taxation or from a rise in the price of gold, I do not know. I leave that to the ingenuity of the Minister of Finance and the other ministers with him, which includes the Minister of Trade and Commerce (Mr. Howe), because he knows what is needed.
I make this suggestion because I remember the depression-and this is one of the reasons why I consented at one time to a group of enthusiasts allowing my name to go before a convention. I did that because of the dastardly-I should not use that word-because of the depression. I went out into the country thirty-five miles and had a dinner of boiled wheat with no sugar on it and very little milk. The mother of the home was ill. During the depression the mines in northern Ontario-and the hon. member who will follow me knows that very well-Geraldton and Long Lac, and the mines north and northeast of Port Arthur, employed many men from both Port Arthur and Fort William and paid them good wages. Mining in northern Ontario has earned some consideration from the minister and they should get it before he brings down his next budget.
I would suggest to him how he can spend a little more. Tell the Minister of National Health and Welfare (Mr. Martin) that he must raise the old age pension rate. I promised that I would give expression to the resolution passed by a group of old ^ge pensioners -and there were not many of them as well dressed as I am, and I am not very particular about my clothes. The means test should be removed. The age limit should be sixty-five. With the aid of the provinces the old men and the old ladies should get $5d a month.
I have said in the house, Mr. Speaker, that if the Liberal party were left in power long enough the old age pensioners-


Mr. Nicholson:: We would all be dead by then.


Stanley Howard Knowles: All on the means test.


Gordon Graydon: You are now preaching the funeral service.


Daniel (Dan) McIvor: I hear you but I do not heed you.


Stanley Howard Knowles: You will heed the voters of Fort William at the next election.

The Budget-Mr. Rowe


Daniel (Dan) McIvor: If the Liberal party is left in power long enough the old age pensioners will be getting $50 a month. But I am afraid of what the opposition will say. When the Minister of National Health and Welfare brings down his finding and removes the means test, lowers the age limit to sixty-five and, with the provinces, raises the old age pension to $50 a month, I am afraid somebody will say that it is bribery. If it is bribery let us have it, and let us have it soon.
I commend the minister for increasing family allowances. I do not forget that during the depression our Rotary club in Fort William sent free milk to the public schools for children whose parents could not afford to buy milk. The increase in family allowances will help to cure that. This increase in family allowances is telling young men and maidens that when they get married it will be a great thing to have half a dozen happy bundles from heaven.
I perceive too, Mr. Speaker, that there are members on your staff who should have an increase in salary. I am not going to exaggerate but I would say that the stenographers in the house should be on superannuation.


An hon. Member:: And family allowances.


Daniel (Dan) McIvor: I am not going to go any further along that line. In closing I congratulate the minister on his courage and common sense last year in keeping taxes up, and I congratulate him and thank him just as heartily now for reducing them.


Stanley Howard Knowles: That is the irony of it.


William Earl Rowe: It is
always a pleasure to listen to our genial friend, the hon. member for Fort William (Mr. Mclvor). I know that he speaks with sincerity, but I shall not discuss the soundness of some of his references to the budget. I realize, as he does, that on any occasion a budget is a very important document. It has grown in importance as the years have gohe by. I have listened to many budgets in this house, Mr. Speaker, as you have; and the budget today is probably of greater importance than ever before. It concerns the lives of our people more than ever before. With centralization of government, and all that is involved today in the administration of our national affairs, the budget has grown to be of even greater importance than it has been in years gone by.
I quite appreciate, as you do, sir, that in the discussion of the budget we are expected to discuss the government's fiscal policies or lack of policies. We understand what is indicated by the budget, what we might expect from it. We realize it involves many matters which are controversial from a poli-

tical point of view, having regard to whatever political attitude one may have to the conduct of our affairs.
However, before I proceed to set out some of those features in the budget which appear to me to be unique changes from those policies which I have always understood the party to your right, Mr. Speaker, to follow, may I place before the house an issue which I feel is not one of political controversy.
After all, we saw within the past week that as a House of Commons we have been able to deal with matters with a great degree of unanimity when a common purpose, such as the great purpose of peace, is involved. We will recall the almost complete unanimity indicated in the house when the Atlantic pact was under discussion.
The issue to which I shall now refer, second only in importance to the Atlantic pact at this time, is the forthcoming conference of prime ministers of the British commonwealth to be held in London durfng the Easter recess. It does seem to me that when we realize the situation in the world today, and when we realize that the trade within that commonwealth is rapidly slipping away from us, we must recognize that these issues are of vital concern to every thoughtful Canadian.
I observe that the London Daily Telegraph states editorially that it hopes the Prime Minister of Canada (Mr. St. Laurent) will be at the commonwealth prime ministers' conference in April. It states that his presence would make for the authoritativeness and completeness of those discussions. I quote:
Nevertheless it is hoped he will be able to make the journey. The subjects to be reviewed are of supreme importance and his presence would make authoritativeness of their discussions complete.
It goes on to say:
No one can foretell how the grandsons of the members of the coming conference will feel about their common interests and connections; nothing should be done that will hamper them in adapting institutions to their own ideas.
Mr. Bevin is reported only yesterday in the Daily Telegraph to have said that it was of vital importance to the whole of the commonwealth of nations that the prime ministers should be present at that conference, not only because of the danger threatening the western world, but because, so far as the commonwealth is concerned, of equal importance is the falling off of trade and the changing attitude of the United Kingdom government toward trade with Canada particularly.
May I suggest that, after all, Canada is the senior and the greatest dominion, the largest partner in the commonwealth. Let me take this opportunity to urge upon the Prime Minister, in view of this press report, the necessity of his attending the conference. I notice

that the Prime Minister has stated through the press that if necessary he would attend in person. It is further stated, however, that if he felt it unnecessary he would send the Secretary of State for External Affairs (Mr. Pearson). I feel that in keeping with the national dignity of Canada, in keeping with the importance of this situation, when every other commonwealth nation is being represented by its prime minister, the Prime Minister of Canada should be there.
Then, there are several other important reasons. There is the matter of our future trade relations with the United Kingdom and other sections of the empire. The prime ministers of those other commonwealth countries will be there. The rapid and continuing deterioration of our trade is alarming everyone today who has paused to think of what may happen in the future.
We can see a possible economic crisis in Canada, especially in connection with agricultural marketing, unless those markets, today being lost so rapidly, are recovered for us. I urge that the Prime Minister consider seriously before he sends any new member of his cabinet, no matter how bright he may have been in other fields of activity, to represent this country. He would be the only deputy attending, and would be representing the largest dominion and the one most concerned.
During the past ten years we have negotiated for primary products over one hundred and twenty-four contracts with the United Kingdom government. Twenty-two of those were in force at one time. Today, with the exception of our wheat agreement, we have only three. These contracts negotiated with Canada were for periods averaging one or two years. Not only have we lost those contracts, but we have failed to fulfil some of them, and they have been curtailed accordingly-to a point which, I am sure, must concern ministers in the government, if they pause to realize what is happening.
Everyone in this country is concerned with what this may do to the agricultural economy of Canada. That crisis will materialize just as surely as night follows day if this government fails to rouse itself to a realization of the situation which is falling about them, and which they seem to accept so complacently at this time in a hush-hush fashion before election time, apparently wishing to say nothing about it.
The Minister of Agriculture (Mr. Gardiner) went over to Great Britain last December, I believe it was, to see what he could do about the situation. He came back with less than he took with him. It is apparent that there is no use sending the Minister of Agriculture, because the result of his last trip indicates
The Budget-Mr. Rowe that the more trips he makes the fewer markets he gets for Canada.
The Secretary of State for External Affairs is certainly no more fitted to represent the primary industry of Canada than is the Minister of Agriculture. At least the Minister of Agriculture is politically astute, even if he has not shown much business capacity in dealing with this problem in Great Britain.


James Garfield Gardiner: I got all I asked for.


William Earl Rowe: You did not ask for enough, then. That is proof that the minister is not a good trader. I know he is a good politician; but I have no confidence in his business ability, so far as selling our agricultural production is concerned.
And, bearing in mind the vote of want of confidence we have before us, I am not so sure that I have any greater confidence in any of the other gentlemen on the front benches than I have in the Minister of Agriculture-and that is at least some slight compliment to him.
The fact of the matter is that the United Kingdom has turned and continues to turn away from Canada, so far as buying these products is concerned. She is buying her stores of food products from other countries -products which formerly she bought from us. The United Kingdom is, as hon. members must know, one of the most stable markets for agricultural products this country has had since confederation.
Let me repeat that while at one time we had twenty-two contracts with the United Kingdom for the supply of agricultural products, we have only three at this time, with the exception of our wheat contract. Yet Great Britain has made over forty contracts with foreign countries, some of which are behind the iron curtain. She has made contracts with Russia; she has made contracts with Poland; she has made contracts with Holland and with Denmark, and with many other countries. She has traded materials in a wholesale national bulk barter deal on a long-time basis. She has exchanged steel and coal and precision tools and heavy factory equipment that we needed in Canada during the past two or three years. Anyone who knows anything about business realizes that these markets are slipping away from us.
There has never been a conference of commonwealth prime ministers as important for the future life of the primary producer in Canada as the one to be held in London during the Easter holidays. Yet the Prime Minister is not going to attend. Perhaps this is another emergency. Every time they want to get some fictitious bill through parliament

The Budget-Mr. Rowe we are told there is another emergency. Perhaps the Prime Minister will tell us what the emergency is that he cannot attend this conference. I hope that the future welfare of the great agricultural industry of this dominion, and of our primary producers and industrial people who are looking for increased trade with Great Britain, does not depend upon one of the junior members of the government. When such an experienced hand as the Minister of Agriculture (Mr. Gardiner) has failed, why send a boy to do a man's job?
It has been stated that there is a dollar shortage, but it has also been stated that by 1952 Great Britain does not expect to have a dollar shortage. Yet she has made ten-year agreements with these other countries. I take second place to no one in this house in my allegiance to the British commonwealth of nations. My people came from Great Britain and I have every regard for that country. As was said yesterday, it gives me a thrill to hear "O Canada" sung, but it gives me a greater thrill to hear "God Save the King." I love the British empire and-I think every hon. member has the same feelings- I am proud that I am a British subject. But with all respect to the mother country, I say that the hour has come when we should know what her policy is going to be. We should know whether these lines of sentiment that have been binding us to her are still holding. We should know whether she is going off on a new state-planned socialist trend. We should know whether or not she is going to help us in the sale of our products. Before you took the chair, Mr. Speaker, you were one of the old-time Liberals who believed in the Liberal policies of long ago. Now in the twilight of your political career it certainly must mean something to you to see the way ;he government is drifting toward the socialization of our lives.
We are seeing a political courtship. We have heard how the hon. member for Winnipeg North Centre (Mr. Knowles) has already received his income tax return from this government. I have been here longer than my socialist friends and 1 want to warn them about the groom they are flirting with at the present time. I remember seeing in that same corner some years ago members of the western Progressive party but they were absorbed entirely by the party to your right. You will remember those days, Mr. Speaker. The members of the government have divorced themselves from their old principles. They want to follow on in the way they are going with the blueprint and fashion plate of the socialist party before them.
When the wedding day will be, heaven only knows. Will it be in June or October?

I notice from the British papers it is rumoured that the government has moved up the election date by three months in order to deal with the conclusions of this all-important conference of British commonwealth prime ministers. In London they consider that that is important enough to warrant the presence of all the prime ministers, but here in Canada the government say that they will just send one of their boys over to represent this country. Now that they have moved the election up three months I would like to know when they intended to have it before it was moved up. However, that is a top secret that will likely be known by the Grits in London before it is known by the Tories in Canada.
I suggest to the Prime Minister in all sincerity that there is a necessity for his attending this conference. It is vital so far as our security from a military point of view is concerned. Never in the history of this country have our markets been more seriously threatened. The British papers have said that the Prime Minister can speak with greater authority than anyone else in representing us. I urge upon him that he should find out if it is the policy of the British government to continue to negotiate long-term trade contracts for products which were supplied until recently by Canada.
We are part of the British commonwealth of nations, by sentiment it is true, but we have also built up a great trade through the empire trade agreements. Now they propose to pay more money to countries in the sterling area and ignore us. Not only are they making contracts for two years; they are making them for ten years. They are casting the die for the future. Why is this divorce occurring?
The government has been trying to mimic the socialist government of Britain in their state planning. But they seem to be breaking away from them because they figure that the conference of British commonwealth prime ministers is not so important. They do not seem to figure that this trade is most important. They have been carrying on a type of policy such that no one knows where they are going. I believe that Britain could well be asked to tell us what we can hope for in the future.
As I have said, contracts have been made with Poland, Russia, Hungary and other iron curtain countries, as well as other countries outside the iron curtain. The prime ministers of other commonwealth countries evidently have been asked by Britain to purchase as much as they can in the sterling bloc. In other words, they have been almost told by Britain to purchase in the sterling bloc. Are we to be placed on the Indian list so far as empire trade is concerned? These are mat-

ters that concern the life and hopes of every young man who is starting in business in Canada. What is the emergency? What is the trouble?
Those are things the Prime Minister of Canada should want to know because I assure him that the people of this country want to know. They want to know what is happening. Great Britain is to lend Russia $36 million which will be spent to purchase non-military supplies in the United Kingdom. These heavy materials are to go behind the iron curtain. I know I am on dangerous ground when I criticize the policies of another country, but I think it is important to bring to the attention of the Prime Minister any policy that affects the life of this country.
I think if I were in the Prime Minister's place I would not send anyone else over there to represent me. I would go myself and ask the Prime Minister of Great Britain, the Prime Minister of Australia, the Prime Minister of New Zealand, and every prime minister there, what this is all about. I would ask them if they have formed a bloc against Canada. I am not going to blame the Minister of Agriculture (Mr. Gardiner) for everything. He made a poor deal. I have made some poor deals in my life, but I never made as bad a one as he did. If I had I would have gone broke, and everybody associated with me would have been broken.
This is a trend, Mr. Speaker. The Prime Minister went to Washington. If he can go to Washington why can he not go to London? After all, I think the Prime Minister is a busy man, and I know it is only because he has other appointments and other business to attend to that he has been forced to leave the house at this particular time. If I were Prime Minister I am not sure that I would spend all my time listening to him, or any other member who might be with him on the front benches over here. Therefore I realize that it is only a coincidence that he has left the house at this point. He will likely be back.
I am glad that the Prime Minister was able to take time enough from the discharge of his heavy responsibilities to be in the house to listen to me urging him to attend this important conference. I say in all seriousness that I hope he will attend.


An hon. Member:: I think he is on his
way now.


William Earl Rowe: I feel, Mr. Speaker, that I do not need to enlarge on what has happened in the British market. On another occasion I have mentioned that to the house. Hon. members, especially in this particular section of the house, have stressed upon the Minister of Agriculture the dangers that lie immedi-
The Budget-Mr. Rowe ately ahead for agriculture, and I am not going to enlarge on them at the present time.
I should like to deal briefly with some of the issues that might be considered even more controversial. My friend, the hon. member for Fort William (Mr. Mclvor), is quite correct. I am glad that there is one clergyman on the other side of the house who seems able, when he is on his feet, to tell the truth with more clarity than many of the other speakers. I have always appreciated the hon. member for Fort William, and when he said tonight that it was a dandy election budget I think the people of Canada will agree that it was.
I remember being in this house in 1940, and on June 24 of that year I heard a budget speech delivered. I am wondering on what grounds the party to your right, Mr. Speaker, is going to appeal to the country, probably three months before they intended to do so. They have had cyclical budgeting. The Minister of Finance (Mr. Abbott) can hardly say the word "cyclical" himself, and he does not understand it after he has said it, because he changes it from day to day. We have had all sorts of signs of change and change and change from those who sit to your right, Mr. Speaker. I have here the remarks that were made by the Minister of Finance in 1940. I shall quote them exactly, because while it is bad enough to misquote a man who is in the house, it would be worse to misquote one who cannot be here. In 1940 our good friend, the late Hon. Mr. Ralston, said:
We realize that increases in indirect taxes disguise the burdens imposed by the war, but they are much more likely to distribute these burdens harshly and unfairly.
We have seen reductions in taxation, and the reductions in taxation have been emphasized. Some people have called it a sunshine budget; others call it a sundown budget. I think it will be sunset as far as the government is concerned. We were told by the Minister of Finance the other night that the taxpayer is going to be saved $369 million in a full year. Even though the year is not quite up he is going to make it as attractive as he can, especially if an election is going to be held soon, and we are told that there will be a saving of $323 million anyway. Yet at the same time we are taking from the taxpayers in sales tax alone over $390 million directly, and no one knows how much it costs the consumer indirectly. The sales tax is probably the most vicious type of indirect taxation.
In the budget speech of 1941 Mr. Ilsley had this to say:
As my colleague said when discussing the increases in personal income taxes which he proposed
2206	HOUSE OF
The Budget-Mr. Rowe
in the budget of June, 1940, this is the tax which in principle most approximates ability to pay. We realize that increases in indirect taxes disguise the burdens imposed by the war, but they are much more likely to distribute these burdens harshly and unfairly.
There, Mr. Speaker, we have two former ministers of finance who saw the dangers of indirect taxes, that they would be distributed harshly and unfairly. In another case Mr. Ilsley said that this type of tax was easy to collect. I believe he said "very collectable and very productive", but I remember his saying that it was not the type of instrument that he wished to use because it was taking from the people something they did not understand they were losing. He emphasized that this tax, while comparatively easy of administration and collection, and extremely productive, had marked defects as a fiscal instrument.
This is the point I wish to make, Mr. Speaker: What is the fiscal policy of the party to your right? Somebody says that they have none. They used to have one. Years ago when I first came to the house they claimed to have one. When Sir Wilfrid Laurier led them they claimed to have one. Now there is a new era of state planners taking control, and they seem to have lost their fiscal policy, or have changed it according to the election year.
Last year the Minister of Finance said practically the same thing with reference to indirect taxation. I can well remember that, when our party put on a two per cent sales tax, the ex-Prime Minister almost wept. He said that they certainly would remove it or change it. They changed it as soon as they came into power by putting it up to six per cent, and then later on to eight per cent. Then they said it would have to be kept on because of the war. The war has been over now for four years, and it is still on.
If indirect taxation was so harsh and unfair in those years, what is the result now? In 1940, when the Hon. Mr. Ralston said that indirect taxation was harsh and unfair the total revenue from taxes in Canada amounted to $468,271,000. Now the indirect taxes of this dominion amount to $1,072,360,000. If the extraction of $468 million from the people in total tax revenue was harsh, cruel and unfair, now, just before an election, the extraction of $1,072,360,000 in indirect taxes alone is not very kind to the electors who are being fooled by this budget, if anybody is. It is quite apparent from these figures, Mr. Speaker, that the two previous ministers of finance realized that these indirect taxes simply disguised the burden and distributed it more harshly and unfairly; but that seems to have been completely ignored by the present government.


Last year the Minister of Finance (Mr. Abbott) said we had reasonably good prosperity but that we could not lower taxes because if we did so the people would have so much money to spend that the cost of living would go up. With the tendency toward centralization and state bureaucratic planning it is not strange how quickly men come to believe that they can handle someone else's money better than that person can handle it himself. Surely the time has come when the Minister of Finance does not need to tell the farmer on the back concession that he cannot judge whether he needs a new roof on his driving shed, or a new henhouse. Surely the time has come when he and the Minister of Agriculture (Mr. Gardiner) and the Minister of Trade and Commerce (Mr. Howe)-who is a little better than either of the other two in controlling the lives of the people of Canada-should get together and decide that they can trust the people with their own money. But, they say, ''We can handle it better, because we are handling more of it." This has gone on and on; it has pyramided, until now we take from the people of this country $2,441,650,000 in a year, though I can well remember that when I first came to this parliament the yearly revenue of the government was about $340 million.
I do urge the government to stop, look and listen and mend the error of their ways, as far as extravagance go.es. How can they hope to persuade the people not to be extravagant when today they are taking from those same people more than they ever took in the past; when they have taken $1,600 million more than was required to run the country during the last four years; when the cost of government is higher than in any other peacetime period in our history; when we have more civil servants than we ever had before. I see some of those civil servants in the galleries this evening.	We have some
very fine civil servants, but it is hard to distinguish them because there are so many working for the government now. They are almost falling over each other in some departments. We are adding bureaucrats every year, imposing a colossal burden upon the country.
We were all glad to hear from the hon. member for Fort William (Mr. Mclvor) this evening. He is a kindly gentleman; but whenever he rises we know the government is a bit worried, because he can always be depended upon to stand by them, even when the going is tough. It is true that in this budget, just before an election, the government is handing some of the money back to the people. It is true that there has been a change in policy. Last year the Minister of Finance said he

would not reduce taxes because we were enjoying so much prosperity. This year he says we have even greater prosperity and that he believes this prosperity will continue; yet this year he reduces taxes. I would join with the hon. member for Fort William in his belief that this was certainly intended to be a dandy election budget.
Now I urge the government to take cognizance of what is going on as far as trade and as far as taxes are concerned. Only an election year could bring about these drastic changes. In 1940 the sales tax brought in $140 million; today the government takes about $260 million more from the people of Canada in sales tax than it took in 1940, and at that time they called it a vicious principle.
I urge the government to consider our position in reference to trade and the distance we have gone in state planning, what you might call socialized agriculture. It all fits in with the wide swing to the left, the courtship to which I have referred; and if hon. gentlemen who sit to my left would swing a little to the right I think the marriage could be consummated in the not too distant future. In the interval the Minister of Agriculture and his state planners are riding on a cushion of $324 million of ERP money, of which $216 million was earmarked for the purchase of agricultural products in Canada, together with $235 million loaned by this country for the purchase of agricultural products. If at a time when we have this amount of money to spend we cannot save our markets, what are we going to do later on, when we have no such assistance? Not only will the farmers have their cellars full of potatoes they cannot sell; not only will the canning factories be loaded up with raspberry jam, as they are now; but you will be tearing out apple trees in various districts because you cannot sell the apples. If the United States declares wheat a surplus product, what are we going to do with our wheat? Are we trying to copy the British planning; or is that planning the reason the British markets are slipping away from us? Where are we going to sell these products? This country never needed leadership and stability as much as it does now. It never before so badly needed a man with enough courage to turn back to the right and talk realities and tell the people the truth, even at election time. You do not get very much for nothing in this world.
I believe my time has almost expired, Mr. Speaker, so I must conclude shortly. In the United Kingdom we have seen the spectacle I have referred to. I repeat that I take second place to no one in my admiration for Britain and the gallant battle she has carried on in the last few years. I take second place to no one in my admiration of her leadership
The Budget-Mr. Rowe in the industrial life of the world, which continued for almost a hundred years. But her first mistake was made even before the first war, when the famous Asquith socialism was brought into operation. At that time Britain began to lose her grip on the industrial leadership of the world. So it was not only the two great wars through which she passed that brought her to her present position; the socialist doctrines that have been followed have played an important part. If that is not true, with all the state planning, the national socialism, the nationalization of this and that industry, why is it that everybody is working yet everybody is rationed? Look at this great continent of North America: look at this country of ours. The Minister of Agriculture and others paved the way in western Canada many years ago; and they did not do it by asking for sops from the government, though the minister has thrown out a good many since. It was not done that way, and no one knows it in his heart of hearts better than the minister. Now, whether the election is in June or October, he knows he has lost the confidence of the people of this country, and hopes and prays to God that he may be saved from the avalanche and the debacle we will have to clean up when we form the next government. Why is it, Mr. Speaker, that today 41-7 per cent of the entire national income of the United Kingdom is taken in taxes, in order to kid the people that it is being handed back to them in various ways?


An hon. Member:: Tell us about the British by-elections.


William Earl Rowe: My hon. friend is back on the question of an election. Let me tell him that in the United States, where the standard of living is twice as high, they take only 26 per cent of the national income in taxation; while in Sweden, a model in many respects, they take only about 18 per cent. So I urge the government not to be influenced by the gibes of those to my left. It is better to go down to defeat alone than to carry socialism further and go down to defeat with a partner more socialist than you are. To my hon. friend who has interrupted me I say he must be a great admirer of the Right Hon. Herbert Morrison. But on September 5, 1945, Mr. Morrison-who maybe is not as socialisti-cally inclined as you are but leans toward that dangerous path that you have been following-said this: "We've left behind the scarcity economics of a capitalist world." What did he say in January, 1949, only four years later? What a difference just a few years make! Indeed, in this government what a difference just a few months make! In January, 1949, Mr. Morrison says: "Don't promise the moon unless you are able to deliver the goods, and it is pretty doubtful

The Budget-Mr. Zaplitny if you can." That is why I am going to vote for the amendment expressing want of confidence in this government, feeling sure myself that the people of Canada have lost confidence in this government and are looking for the type of leadership and stability that has been so emphatically, eloquently and clearly displayed by the greatest leader in this house, the leader of the party to which I have the honour to belong.


Mr. F. S. Zaplitny (Dauphin):: I cannot hope, Mr. Speaker, to emulate the hon. member who has preceded me in the eloquence that he has displayed. I always admire the facility with which he can speak in such a rapid-fire fashion. In his time he must have been a wonderful auctioneer. If he was not one, he would have been a good one, particularly if he had something to sell.
The hon. member made a few references to the party to which I have the honour to belong, and warned the government or the Liberal party that they were going down the road to socialism. He also issued a warning to this party, for which we are duly thankful, that we may be swallowed up by the Liberal party, as was the Progressive party at an earlier date.


An hon. Member:: Do you not think you will be?


Frederick Samuel Zaplitny: He referred to the Progressive party as the blushing bride that was absorbed. May I inform him, in case he is not up on his Canadian history, that in Manitoba where I am a little bit closer to the coalition than he is, and can see it at first hand, it is not the C.C.F. party which is in danger of being absorbed, but rather the Progressive Conservative party of that province which is in the coalition up to its ears and does not know how to get out of it.


Gordon Graydon: You were in too. Remember Farmer.


An hon. Member:: He soon got out.


Gordon Graydon: He was in for two years before he got out.


Mr. Castleden:: That is more than you can do.


The Acting Speaker (Mr. Golding):: Order.


Frederick Samuel Zaplitny: The hon. member for Peel (Mr. Graydon) has already got an explanation of that.


Gordon Graydon: It was not very good. I checked it up afterwards. Farmer was in too long for your argument to stand.


Stanley Howard Knowles: How long were you in?


The Acting Speaker (Mr. Golding):: Order.


Frederick Samuel Zaplitny: There is no danger of this party being absorbed by the present administration because on all fundamental issues and on all economic issues this party has stood four-square for certain policies which are not being followed by the present government, and that is more than can be said by the official opposition of this house. I would not say that unless I had some chapter or verse to back it up with. The hon. member who preceded me made a fine speech about the evils of the sales tax. I do not recall the exact words he used but they were words which condemned it squarely; and to that extent may I say that I agree with him wholeheartedly. May I also remind him that last year on May 27, when the vote was taken on the C.C.F. amendment to the budget, we had moved in this house that the exemption levels be raised for income tax purposes, and also that the sales tax be removed-


James Arthur Ross: What else?


Arthur Leroy Smith: Read it all.


Gordon Graydon: Socialism with it.


The Acting Speaker (Mr. Golding):: Order.


Frederick Samuel Zaplitny: When the vote was taken on May 27-


Gordon Graydon: Would you read the amendment, or are you afraid to?


Arthur Leroy Smith: Read it all.


Gordon Graydon: Are you afraid to read it?


Frederick Samuel Zaplitny: I have not the slightest fear of any one of the hon. members, or of all of them put together.


Gordon Graydon: Do not boast too much.


Frederick Samuel Zaplitny: Let me finish what I was saying. When the vote was taken on May 27-


Gordon Graydon: What amendment was that?


The Acting Speaker (Mr. Golding):: Order.


Gordon Graydon: We have a right to know what the amendment was.


The Acting Speaker (Mr. Golding):: I would ask the hon. member to refrain from interrupting the member who has the floor.


Gordon Knapman Fraser: We want to know what he is talking about.


Gordon Graydon: We want the amendment read.


Frederick Samuel Zaplitny: The amendment to which I referred called for the raising of the exemption level for single persons to $1,250, and for married persons to $2,500. It also called for the removal of the sales tax and other excise taxes, and it called for the establishment of a public investment board.


Gordon Graydon: That was the brick in the bouquet.


Frederick Samuel Zaplitny: I hope that my friends are satisfied now. What does the record show? The record shows that when the vote was taken the Progressive Conservatives lined up solidly, every one of them, to defeat that amendment which would have accomplished what they are crying for today.


An hon. Member:: So did the Liberals.


Gordon Graydon: It would have accomplished socialism. That is the brick in the bouquet.


Frederick Samuel Zaplitny: So did hon. members across the way. That is quite correct. Talking about the sales tax in particular, I was amazed to hear my hon. friend who preceded me condemn it in such round terms. As a matter of fact, earlier today I heard the hon. member for Muskoka-Ontario (Mr. Macdonnell) also oppose the sales tax. It ran through my mind at the time-and I went back, checked it up and found that I was quite correct-that the former financial critic for that party who has either retired or has been deposed, the hon. member for Rosedale (Mr. Jackman), advocated actually that the sales tax be increased. He was doing that on behalf of his party, I take it, because if I turn back to March 24, 1943, I find these words at page 1522 of Hansard. First the hon. member for Rosedale asks: "Why was the sales tax not increased?" Then he goes on a little later as follows:
If the people have the money In their pockets, the great majority will spend it, and the government will get the revenue through the sales tax. As long as the worker can handle the money, as long as he can jingle it in his pocket, his incentive to work is not likely to be destroyed.
That was the advice given by the Progressive Conservative party as to the sales tax. All you have to do is hand money to the worker so that he can jingle it in his pocket for a while, then put on the sales tax and take it away painlessly, and he will never know the difference.


James Arthur Ross: That was his own personal opinion.


Mr. Probe:: He was either speaking for your party or he was lying.


James Arthur Ross: Who was lying?


The Acting Speaker (Mr. Golding):: Order.


Arthur Leroy Smith: The expression has just been used by the hon. gentleman here that somebody was lying. I ask him to withdraw that remark right now. It is not parliamentary.


Frederick Samuel Zaplitny: Mr. Speaker,-
The Budget-Mr. Zaplitny


Arthur Leroy Smith: Not you, but the gentleman behind you; and I use that word "gentleman" advisedly.


John Oliver Probe: I did not use the word "lying", Mr. Speaker, with respect to the party. I said that either the hon. member for Rosedale in his position as financial critic for the party was speaking for the party or he was lying.


Gordon Graydon: I did not hear those words.


John Oliver Probe: I did not say he was lying. If he happened not to be speaking in his role as financial critic, perhaps he was speaking with conviction.


Arthur Leroy Smith: If you are
honest, you will withdraw that remark. I will tell you this. When you say that, if you say you are in order, I will tell you that you are lying.


The Acting Speaker (Mr. Golding):: I would ask hon. members to refrain from interrupting the speaker. It is not at all fair to him.


Mr. Sinclair:: It is a good show for us.


The Acting Speaker (Mr. Golding):: The hon. member who has the floor has a right to present his case. I think every hon. member is interested in maintaining the decorum and .dignity of the house, and it can be done only by everyone acting with dignity and decorum.


Arthur Leroy Smith: Can an hon. gentleman say, of someone else in this house, that he is lying? That is what the hon. member did; and if he is a gentleman, he will withdraw that remark.


John Oliver Probe: If the hon. member for Calgary West feels that the word was offensive I will withdraw it.


The Acting Speaker (Mr. Golding):: I would ask hon. gentlemen to let the hon. member make his speech.


Frederick Samuel Zaplitny: Thank you, Mr. Speaker. I am sometimes amazed how quickly my hon. friends to the right rise up in arms when some criticism is made of their previous stand. All I was pointing out was the stand that they took on a particular question. I was not using any strong language that I was aware of. I did it in the most kindly way I knew.


Mr. Maclnnis:: That is what they do not like.


Frederick Samuel Zaplitny: I am at a loss to know why all the howl of pain.


Gordon Graydon: We were trying to defend the next government; that is all.


Frederick Samuel Zaplitny: I was going to point out, in case the hon. member for Rosedale (Mr. Jackman) felt that in 1943 he was speaking

The Budget-Mr. Zaplitny at a time when the nation was at war and that that was a justification for advocating an increase in the sales tax, that that was not the case in 1946. On July 9 of that year he again spoke in this house on that subject and used these words in connection with the sales tax, as reported at page 3299 of Hansard:
Very few of our people today know there Is already a sales tax imposed at the wholesale level. Such a tax does not discourage the worker from working, and there is fairness in a tax policy based on the principle that the more one spends, the more one pays.
Then he added this gem:
There is nothing obligatory about paying a tax if one does not purchase.
It is obvious, of course, if we can get along without buying we will not have to pay any sales tax.


Donald MacInnis: The hon. member for Rose-dale would not know that.


Frederick Samuel Zaplitny: To keep the record clear, let it be understood that the Progressive Conservative party not only voted against the motion of this party last year to remove the sales tax, but actually-


Gordon Graydon: Keep to the facts.


Frederick Samuel Zaplitny: I am keeping to the facts.


Gordon Graydon: No, you are not.


Frederick Samuel Zaplitny: If you will listen you will hear them. In the past the party advocated an increase in the sales tax. In case it might be thought that the hon. member for Rosedale was speaking only for himself, and was not in a responsible position, which would indicate that he was making an irresponsible speech in this house, may I refer hon. members to the history of the sales tax itself. In 1931 the sales tax stood at one per cent. In that year the Conservative party-it was not progressive officially at that time-the Bennett administration raised it 400 per cent. They made it 4 per cent. Perhaps it was Mr. Bennett's personal idea, I do not know. Perhaps he was not doing it for the party. Perhaps it was just a funny notion that he had, but in 1932 we find that he got the same notion over again and raised it 50 per cent, making it instead of 4 per cent, 6 per cent. Then the Liberals took over. The Liberals took over in 1935 and on the second day of May the following year they raised it to 8 per cent and that is where it has remained until this day. There is the whole history of the sales tax and the action of the various parties on it.
In reading or listening to the present budget one can hardly escape the impression that once again more than half of the Canadian people have been almost completely


disregarded. It is easy enough for the hon. member for Fort William (Mr. Mclvor), or any other hon. member on the government side, to rise in his place and say it is a dandy budget, it is a fine election budget. We all know that; but it is again left to this party to speak for more than 50 per cent of the Canadian people who are not within the income tax brackets at all, and whose situation today is worse than it was a year ago because the cost of living has gone up. To them the thing that stands out the largest in the whole budget is not the action taken to cut income tax rates or to raise exemption levels, because they were not paying income tax anyway, but the fact that the subsidy of forty-six and a half cents a bushel on wheat going into flour has been removed, which means another increase in the price of bread.
There are many people in Canada who already are finding it pretty hard to make ends meet with the prices of bread, milk and other commodities as they are today. It is not only unfair to the consumer but it is unfair to the producer, because the farmers of this country are going to find it difficult in years to come-and this difficulty is now making itself felt-to dispose of their products. If the government is to take action which will raise the domestic price of these products to the consumer, it means that they will sell that much less of their products. Of course there are those who do not believe in subsidizing. In one of his speeches not so very long ago the Prime Minister (Mr. St. Laurent) himself said that he would not be a member of a government which would subsidize housing. That would seem to indicate that he looks the same way on subsidies on food products as well.
I may say frankly to the government that if they accept the philosophy that all subsidies should be removed, then they are going to have to make many changes in all the statutes of this country, because our whole tariff system is based on subsidies. Much of our industry today operates on a subsidy basis. If they are going to extend subsidies to the steel interests, to the gold mining interests, and put up tariff walls to protect the manufacturing industries, they cannot stop there and say that they will remove the subsidies on food products, because that is grossly unfair to the primary producers of Canada.
A criticism has been made of this budget, and I think rightly so-although I am not inclined to use the strong language that was used today in calling it a "bribery" budget- that it was designed to influence the voters at the next election. We had an admission of that from one of the Liberal members this evening who spoke very frankly.


Mr. Mariin:: Perfectly legitimate.


Frederick Samuel Zaplitny: We have had other instances in the past of political parties attempting to influence voters. Earlier in this session I referred to an article written by the hon. member for Quebec South (Mr. Power), one of the finest members of the house, who spoke out very frankly and admitted that in the past both the Liberals and the Conservatives have bought votes with cash on the barrelhead. Whatever may be said about that system itself, at least it is an honest system. You pay the cash and you get the vote, maybe. Some of the experiences have been that they were not always sure of the votes they bought, and that in itself had a tendency to hold them back from spending too much money. But now the government has struck with a "new look" in politics. Instead of spending party funds, all they need to do is to squeeze the taxpayers for two or three years and in an election year give some of it back to the voters and say, "what fine fellows we are." I am sure that the people of Canada, the taxpayers of this country, are not going to look kindly upon that kind of tactics. They expect from the people in public life a certain amount of frankness. If the Liberal party feel that they have done the proper thing in the last few years, let them place their record before the people and let them be judged by that record. To attempt to influence the voter by giving him something which was taken away from him, and making it appear as if he were receiving a present, does not speak well for the high level to which politics in this country should aspire.
I come now to agriculture. It can be fairly said that this budget leaves the farmers out in the cold. About all that happens is that those farmers who did pay income tax of substantial sums may be relieved of part of the burden. But that was not the most serious feature of taxation, nor the thing that the farmers objected to most. What the farmers have been objecting to most for a long period of years is the cost of production of the things which they have to produce. This year, that is worrying the farmers more than it has been for a long time, because the prospects are that the price of farm produce is going to come down. When he arrived back from England the Minister of Agriculture (Mr. Gardiner) spoke to the organized farmers of Canada and warned them that the prospects are they must expect less money for their grain, their livestock and all their other products. We have only to look at the price of butter to see where the trend is leading at the present time. Farmers know that it is a two-sided question. The farmers of 29087-140
The Budget-Mr. Zaplitny Canada have always been very fair in approaching the question of prices and markets. They have never asked for all that the market could bear. There were opportunities for farm prices to rise to much greater heights than they did, had that been permitted by price ceilings, but the organized farmers and individual farmers in this country never pressed the government to allow the prices of farm produce to go beyond reasonable levels.
What the farmer wants most is stability. He is not asking for an opportunity to profiteer from his fellow man. He asks only for the opportunity to earn an honest living and to receive full remuneration for his labour. That is why the cost of production to farmers is just as important as, and in the next few years will be more important than, the prices of the produce they sell. The farmer realizes that the price he receives for the surplus products to be exported will be largely governed by the conditions in those markets to which they are shipped. And the only way in which he can receive better prices than those markets command would be through government subsidies. That being so, farmers realize that the only way they can remain solvent and in production is to keep costs of production down to a reasonable level, in order to produce at a reasonable price.
At the convention held last summer by the Liberal party the Minister of Agriculture (Mr. Gardiner) made a speech. Resolutions were passed-I have copies of them. I have looked through those resolutions carefully, and I find that the two things they did promise in definite terms to the farmers of Canada were that the cost of production would be reduced by government action, and that stable markets would be found for surplus production for the next several years.
Let me say that those are just the things the farmers are wondering about. What has been the result? Has the government taken action to review the cost of production? One has only to ask what happened in connection with freight rates. They went up 21 per cent; and hardly had that been done when the railways applied for another increase of 20 per cent, which is now being considered. If that is allowed, the farmers will pay 41 per cent more in freight rates than they did a year ago.
Certainly that is not going to reduce the cost of production either for the western farmers or for those in the east. Then, what about the price of farm implements? All those things enter into the cost of production. Yet, from year to year, since the ceilings have been taken off, the farmers have seen those costs climb. Today, when we have reached a point where the prices of farm products are

The Budget-Mr. Zaplitny almost sure to come down, those costs of production are either rising or remaining stationary. This government has not redeemed its pledge to the farmers to reduce those production costs. Neither have they redeemed their pledge to find suitable markets for the surplus products offered by the farmers of Canada. We in the C.C.F. party suggested to the governments some time ago that in order to look after surplus production both of prairie farmers and farmers producing apples, livestock and other products, the government should be prepared to assist in making bilateral trade agreements with various countries which would be prepared to exchange their products for the primary products of Canada.
Replying to that in his budget the Minister of Finance said the government was absolutely opposed to any such arrangement, and used this as an excuse for not doing it.
The third practical objection to this line of approach is one in which most, but not all, members of this house will agree. It is that the application of a policy of barter, bilateral deals, and discrimination requires widespread governmental control of private trade, and even the extension of trade by agencies of the government itself.
Let me pause there to ask the minister what is wrong with the government's becoming an agency for trade in disposing of our primary products? Is that not what the wheat board is constituted to do at the present time? If the philosophy of the Minister of Finance were followed to its logical conclusion it would mean that we would have no wheat board in Canada. Because if the minister is opposed to the government's becoming an agency for buying or selling primary products, then he is of course opposed to the wheat board's handling of grain.
Then at a later point the minister said in his budget speech:
It is apt to lead to more government buying and selling, frequently involving subsidies and trading losses.
Let me say to the minister that, if he thinks a government can save money by avoiding subsidies at certain times in the marketing of primary products in this country, he will find that if another major depression comes- and it will come if the farmers of this country cannot dispose of their products-it will cost the government far more in the form of relief, and bring far less benefits to all concerned than a few well-placed subsidies.
So much for agriculture. There are other very serious omissions from the budget to which I wish to refer at this time. People have been led to believe that this year the government was going to announce an overall social security program which would provide greater benefits for those receiving old age pensions, provide assistance for those

who are crippled or disabled, and also provide a general national health plan. We in this group have been waiting impatiently for some such action on the part of the government, to show that this is going to be done. We felt that perhaps when the budget was brought down the government would reveal its plan in this respect.
Again we have been disappointed. We find there is nothing in the budget to show that provision is being made for an over-all social security program such as was promised as far back as 1945 by the administration, and hinted at every year since that time.
We find also that one of those things which some of us have urged over a period of time has been left out entirely-no mention made of it-and that is some form of financial assistance to the provinces for educational purposes. Let me hasten to say I realize as well as anyone that education, from the standpoint of administration, is in the hands of the provinces. Nor do I wish to raise any controversy about provincial autonomy. But there is nothing in our constitution which would prevent this or any other government in Ottawa making substantial grants in aid to the provinces for the purpose of raising and equalizing educational standards.
In order to put this party's stand on the record so far as that question is concerned, let me quote the resolution passed by the national convention of the C.C.F., held at Winnipeg last summer. We say:
While fully recognizing that education is rightly under provincial jurisdiction, a C.C.F. government, in its first term of office, will collaborate with the provinces to provide and equalize educational opportunities for all Canadian children. It will make every effort to make sufficient funds available to help the province to:
1.	Ensure that the necessary schools and colleges are built and equipped.
2.	Provide, by scholarships and otherwise, financial assistance to deserving students.
3.	Assure teachers an adequate salary.
4.	Assist adult educational programs on a broad scale.
5.	Encourage musical and dramatic art, the arts and crafts, and assist recreational and physical fitness programs.
We feel that that is a reasonable program to expect at this time from the federal government. The other day the Minister of National Revenue (Mr. McCann) made an announcement of the government's policy with respect to television-a most important announcement. Let me say that I agree with him; television is important enough to remain as a public utility, on the same basis as the Canadian Broadcasting Corporation.
This however happens to be a field of education which, to say the least, staggers the imagination. If television were applied in this country for broadening and raising educational standards it would do a great

service not only to this generation but to all future generations. It is the most revolutionary means of communication we have today. The development of television has not been carried out in Canada, but this is a field into which the federal government could enter with great propriety and spend the large sums of money necessary to make television available to the schools of the country. No one will deny that there is no single municipality, school district or even province that could attempt to give that kind of service to the schools because of the great capital expenditures that would be involved. In this connection the federal government could properly enter into the field of education and provide the necessary facilities, both at the broadcasting and receiving ends.
I know that this will sound revolutionary to some hon. members when television is not yet in commercial use, but let us not forget that only a few years ago we did not have jet-propelled planes or atom bombs or many of the things that are realities today. It is not expecting too much to say that it will not be long before television in the United States, which is now on a commercial basis, will be put to social and educational uses. Under a properly controlled public utility setup television can play a great role in the enlightenment of future generations.
Another omission from the budget which I regret is one in connection with a public investment program. This was referred to by the government in 1945 when we were led to believe by the speeches made, particularly by the Minister of Agriculture (Mr. Gardiner), that the government was planning to spend large sums of money in the prairie provinces to develop our natural resources and expand our secondary industries. I am disappointed to find that there is no provision in this budget for that kind of work.
Those who know the prairies realize that the farmers are in a precarious position. Given one or two years of drought or some other condition that causes a crop failure and many of the people there find themselves in a bad financial state. One reason is that we do not have sufficient secondary industries or industries of a processing or manufacturing nature to absorb the shock of a crop failure. We are dependent too much upon one type of economy.
On the other side of the scale we find that in eastern Canada there is a large concentration of working people in the cities. During the war there was a great housing shortage and much overcrowding and congestion. On the other hand, we have the wide-open spaces on the prairie, we have the climate and we have everything to make life comfortable.
29087-140J
The Budget-Mr. Zaplitny Those of us who have lived on the prairies for a number of years cannot understand why one would want to live in a city in eastern Canada. However, there may be two sides to that question.
The fact remains that we have an unbalanced economy. There is too great a concentration of people in eastern Canada and there is too great an expanse of space in western Canada. Something should be done about it, not only to relieve congestion in the cities of eastern Canada but to help to develop our great resources and the possibilities that we have on the prairies. When I refer to the prairies I do not want anyone to think that they are just flat, open spaces. The fact is that we have prairie land, we have park land and we have mining districts, such as those in northern Manitoba and northern Saskatchewan. Then there are the oil fields of Alberta and the coal fields. We have in western Canada the possibilities of a great industrial area.
I attended a meeting outside the house at which the Minister of Agriculture spoke and he told the meeting that there was no reason why there should not be 15 million people in the three prairie provinces within a few years. I see no reason either, unless the government is not willing to supply the capital necessary to give an impetus to the development of our natural resources. If that is not done both the Minister of Agriculture and I will be pushing up the daisies for a long time before there are 15 million people on the prairies. There are great possibilities there but they require capital for their development. The federal government could properly go into those areas and develop those industries.
It has been suggested that there should be a steel rolling mill in one of the prairie provinces. Someone will ask whether we have the iron ore there. The fact is that northern Manitoba has ore of all kinds. The ground has hardly been scratched there. We should have copper and zinc refineries as well as for other metals found in the northern parts of the provinces. There should be a flax fibre plant to utilize the flax straw that is going to waste today. There are large areas that could grow the finest type of flax for that purpose. There should be an oil processing plant. The prairies use large quantities of paint every year which is brought from eastern Canada. Yet we produce the seed that makes the oil that makes the paint. Freight must be paid on that seed when it is sent to the east and then on the paint when it is brought back.
All these things require development and the federal government should take a bold step and invest public moneys for the devel-
2214	HOUSE OF
The Budget-Mr. Marquis opment of these natural resources in the public welfare. The people of this country have a right to expect that the government will be more than a bunch of bookkeepers. When the budget comes down all the government seems to be concerned with is seeing that the figures are added up correctly. When the Progressive Conservative financial critic criticizes the government it is only because he thinks they could have done a better bookkeeping job. We in this part of the house feel that the government should be more than a bookkeeping agency for the people of Canada. It should have the initiative and courage and boldness to go into new areas, to develop new resources, to start new industries and to provide a growing and expanding economy for our great country.


Mr. Eugene Marquis (Kamouraska):: Mr. Speaker, after having listened to the speech of the hon. member for Muskoka-Ontario (Mr. Macdonnell) this afternoon I decided to put a few remarks on the record. I crave the indulgence of the house for my English. I shall do my best to make my remarks in English because I want hon. members of the opposition to understand what I am saying in answer to their speeches.
First I want to say that I was amazed at the speech of the hon. member for Dufferin-Simcoe (Mr. Rowe). I admit that he is possibly a good speaker on the hustings, but I was surprised that he expressed so much fear of the right hon. Prime Minister (Mr. St. Laurent) that he desires to have him leave the country during the Easter recess.
I may tell him that the Prime Minister knows what is best for Canada. He knows where he should be the year round in the best interests of the welfare of this country. He will be where it is best for the country that he should be.


Gordon Knapman Fraser: On the hustings.


Eugène Marquis: If it is necessary for the Prime Minister to go to London, I do not think it will be necessary for him to invite the hon. member who mumbled over there.


Gordon Knapman Fraser: I did not mumble.


Eugène Marquis: I am glad that he has identified himself. Nor do I think it will be necessary for the Prime Minister to invite any other member on the other side of the house. The hon. member for Dufferin-Sim-coe returned many times to that point. He urged the Prime Minister to go to London. He said that Canada should be represented by the Prime Minister, and that the Prime Minister should not send one of his boys over there. The Leader of the Opposition (Mr. Drew) sent one of his boys to say that to the Prime Minister tonight. He did not come here and say that to the Prime Minister.


I was greatly amused in listening to his remarks because so much of them did not concern the budget. The hon. member for Dufferin-Simcoe referred to contracts with the United Kingdom. I do not know if he would prefer to have many more contracts, but I might remind the house of the stand that his party took on the measure sponsored by the Minister of Agriculture (Mr. Gardiner) which was passed by the house recently. I understood that they were against the contracts. The hon. member should not grieve over the fact that the Minister of Agriculture has not concluded as many contracts as hon. members opposite desire.
The hon. memher had a lot to say about what he called political speeches. I do not know how I should describe the speech he made tonight. I do not know whether it was a constructive one, if there were any suggestions for the government to put into effect, or if it was merely a speech to raise a fuss and to try to impress some of the voters of the country. I hope that the voters will read his speech, and I rely entirely on their sound judgment to decide as to its merit.
I should like to refer now to the speech delivered by the distinguished member for Muskoka-Ontario on the budget. He was supposed to criticize the budget. I took notes of what he said, and I think one can summarize his argument in this way. He said that it was a very good budget but that it was bad for them because they fear that an election will be held this year. If you will refer to Hansard you will see that on the night the Minister of Finance (Mr. Abbott) delivered his speech on the budget, the hon. member for Muskoka-Ontario asked if there were any taxes left. That was an excellent appreciation of the good policy of the government. Continuing this afternoon, it was pretty hard for him in view of the drastic conclusion he had arrived at the other night.
If we want to understand the attitude of the Progressive Conservative party on fiscal policy we must refer to their attitude in the past since the beginning of the last war. I was not in the house before 1945, but I read the newspapers, I referred to Hansard, and I became acquainted with the attitude of my hon. friends. They constantly demanded higher and higher expenditures for war purposes. They made their demands in good faith, and they were probably trying to help the country to win the victory over the enemy as soon as possible. Nevertheless at that time they did their best to contribute towards augmenting the expenditures of the country. They attacked the government because they said at that time the government was too lenient. They said that people

did not enlist quickly enough, and that the government did not spend enough money for munitions and supplies, for grants and loans to other countries, and so on. If the government had followed the suggestions of the hon. members in the official opposition what would have happened? The debt, instead of being over $16 billion at the end of the war, would have been about $20 billion or $25 billion. What would be the attitude of those hon. members today in the face of such a huge debt? Would they ask the government to reduce taxes? The answer is no. They would be obliged to ask the government to maintain high taxes on the people of Canada in order to meet the huge obligations that would be facing this country. That would be the situation of the country and of the government.
At the end of the war the government did the best it could to give fair and just treatment to the veterans, and our veterans charter seemed to be the best in the world. My hon. friends of the opposition did not find that sufficient. Pensions were not high enough; pensions should have been paid not only to veterans but also to those indirectly connected with war occupations. Public works should have been undertaken everywhere.
A few days ago when a motion was before the house to go into committee of supply the hon. member for Lake Centre (Mr. Diefenbaker) asked the Minister of Agriculture and the other members of the cabinet to spend hundreds of millions of dollars for a gigantic plan he submitted to the house. Other hon. members rose and submitted demands of the same kind. Now they are saying taxes are too high, that the government should have reduced taxes more and more.
As for controls, at the end of the war and as a consequence of the war there was a great scarcity of certain commodities. The government had to take control of those commodities and distribute them among the people. My friends of the Conservative party fought for the removal of controls. If the government had agreed to their requests then, monopolies would have hoarded the commodities and sold them at prohibitive prices to the more fortunate people, depriving the working people and poorer citizens of this country.
Since the end of the war this government has made a splendid record. It has achieved the tremendous task of consolidating our national debt and reducing it by the tremendous amount of more than $1,500 million. During less than four years the government has demobilized our armed forces, converted our war industries into peacetime industries,
The Budget-Mr. Marquis developed our internal and external trade, given generous pensions to our veterans, contributed to the economic revival of European countries, and established a vast program of social security in Canada. I think the Minister of Finance (Mr. Abbott) was more than justified in saying that no country in the world can show a better record. If since the beginning of the war this country had been administered by the self-boasting geniuses of the opposition, it seems to me the economic and social situation in Canada would be more comparable to that of the years 1930 to 1935 than that of the years 1945 to 1949.
In his criticism of the budget the hon. member for Muskoka-Ontario (Mr. Mac-donnell) referred more to the budget of last year than to the budget of this year. If he wants to examine the records of the two parties he should examine them for the last twenty-five years, let us say. The Liberal party, with its two leaders in thirty years, shows a magnificent record of achievements before the war, during the war and since the war. The Conservative party, which changed its name and is now the Progressive Conservative party, in the same period of time has had half a dozen temporary, acting or not-acting leaders, and in 1935 was ousted from power for lack of clear-sightedness, lack of competence and lack of comprehension of public affairs. This is the straight and brief record of both parties for a quarter century.
But let us come to the criticism put forward by the hon. gentleman. He says this is a bribery budget, but at the same time stresses the fact that the Liberal government has failed in giving married people an exemption of only $2,000. He says his party has promised an exemption of $2,500. Where is the political bribery-in a real, sound reduction, or in a fictitious promise the Conservative party will never make effective? Because they will not be more successful under this new temporary leader than they were under the other, forgotten ones.


An hon. Member:: You will be surprised.


Eugène Marquis: I am not easily surprised; I
think the hon. gentleman is more likely to be surprised than I am, but he should be accustomed to that, so his health will not suffer if he is defeated at the next election. If I am not mistaken, he forgot to mention the exemption for children; he forgot to refer to the family and social aspects of this budget. I prefer to see an exemption of $2,000 for a married couple, with an additional exemption of $150 per child, plus the family allowance exempt from taxation for a family of six or eight children under sixteen, than an exemption of $2,500 for childless married people.

The Budget-Mr. Marquis
I thank the hon. gentleman for the following remark. In referring to the budget of the Minister of Finance he said, "This comes to you with the compliments of the Liberal party." He should have said, "with the compliments of the best government we ever had in Canada." He should have added that good and progressive measures always come with the compliments of the Liberal party and the Liberal government. Family allowances have come to this country with the compliments of the Liberal government. The adjustments of family allowances will come this year with the compliments of the Liberal government. Old age pensions have come in this country with the compliments of the Liberal government. The health program has come with the compliments of the Liberal government. More than that, the unemployment insurance plan came to this country with the compliments of the Liberal government. This government may not be perfect, because there is nothing perfect on this earth; but if the hon. member will refer to the political history of Canada for the last twenty or twenty-five years he will see that social measures, good administration, the consolidation and reduction of the debt, always came with the compliments of the Liberal government.
In his remarks the hon. member pointed out that the Minister of Finance was under a disadvantage in not representing a farming constituency, thus insinuating that the present budget does not take care of the farming population. I have the advantage of representing a farming constituency, one in which perhaps nearly all the residents are farmers. There is no city, there is no town. In my constituency there are only parishes composed of farmers and workers. I was born on a farm. When I was young I worked on a farm, and I myself own a farm. I am surprised at the remarks of the hon. gentleman. If there is some group which can criticize this budget, may I say that I do not see how the farmers of my country can criticize a budget which provides exemptions for their average income, exemptions for their large families, and provides at the same time such great social benefits. The government has undertaken to increase the family allowances and to assure stability in prices of farm products.
In raising the exemption to $2,000 for married people and to $150 plus the family allowance without any charge for children under sixteen and to $400 for children over sixteen, it seems to me that this government has given substantial relief to the farmer whose income is not high and who is generally the head of a large family. I have here comparative figures with regard to income taxes which will be levied in 1949 in the United States,
tMr. Marquis.]
the United Kingdom and Canada. If I may have the consent of the house to do so, I will table these figures.


The Acting Speaker (Mr. Golding):: Has the hon. member that consent?


Some hon. Members:: Agreed.


Eugène Marquis: The figures are as follows:
(Translation):
Comparative tables of taxes in Canada, the United Kingdom and the United States
Rates of tax	in Canada:	Married without	Married with two children (below 16 years ofRevenue	Single	children	age)$ 1,200	$ 30.00	2,000	150.00	4,000	510.00	$ 320.00	$ 269.00100,000	1,960.00	1,660.00	1,582.00Rate of tax in the United Kingdom:	1,200	126.00	42.00	2,000	342.00	324.00	90.004,000	1,060.00	396.00	720.0010,000	3,600.00	3,476.00	3,260.00Rate of tax in the United	States after deduction of	10 per cent for charitable gifts, medical expenditure, and so forth:	1,200	99.60	2,000	232.40	132.80	4,000	603.04	464.80	265.6010,000 (Text):	2,123.68	1,621.44	1,360.96According to these figures you	will see that
the taxpayers whose incomes are under $10,000 are those who in our country are more protected and better taken care of.
The hon. member for Dufferin-Simcoe (Mr. Rowe), who can naturally express himself in English far better and far more easily than I can, put on the record a few particularly flashy sentences, and I took note of one of them which was: "Do not promise the moon unless you deliver the goods".
In almost fifteen years, this government has never made large promises. It had to meet the war burden. It had to meet the attack of the opposition when it was fighting this terrible war. It succeeded in maintaining economic stability, order and peace in this country; in preventing subversion and communist attack; it had sent to prison those who were found to be traitors to their country. During that time hon. members of the opposition strongly questioned the attitude of this government and of the Prime Minister (Mr. St. Laurent) who was then Minister of Justice, because he had some citizens put behind bars and kept in secret pending an investigation which concerned the security of the state. If this government had left those people free, perhaps it would have been impossible to find out what kind of organization was trying to reinforce itself within the walls of Canada. As one of our hon. friends says now, perhaps

we could never have been able to see that day when Christian democracies are able to send their prime ministers or their representatives to sit around the peace table to discuss the security of our Christian nations, to unite for the benefit of those who want to maintain their faith, their traditions and their creeds, who want to maintain their system of economy and their policies. If the government had not succeeded in arresting those people, perhaps this country would now be in a critical situation.
I referred a few minutes ago to the words of the hon. member for Dufferin-Simcoe (Mr. Rowe) in which he said: "Don't promise the moon, unless you are able to deliver the goods". How often have we recalled in the house all the goods that this government has delivered to the country. We never promised the moon. We never promised what the hon. gentlemen dared to promise at their convention, namely, to give more social security, to give more tax exemptions, to give larger old age pensions, to lower the age limit to sixty or sixty-five and to decrease the taxes in this country. How can a party which did not make an outstanding success of public affairs from 1930 to 1935 perform such a miracle in politics, by giving all that to the people and reducing the taxes in this country? I believe sincerely that these words apply to my hon. friends who promised the moon, but who will never be able to deliver the goods.
I know that my hon. friends of the opposition are gentlemen, and I congratulate them on the efforts they are making to criticize a good administration. I understand that it is an extremely hard thing to do. When the hon. member for Muskoka-Ontario (Mr. Mac-donnell) this afternoon had so much difficulty in finding some good argument against the present budget, I said to myself: This is the best approval of the government's policy.
(Translation):
Mr. Speaker, I regret that the short time at my disposal does not allow me to discuss at very great length the budget now before the house. But if I may make a brief outline of that document, I shall say that the government of this country has made genuine efforts to stabilize our country's economy and reduce our debt considerably. Now that the danger of war is disappearing and that we are beginning a new era, the government is in a position to grant substantial reductions. At the end of the war the taxpayers of this country had to carry a heavy burden. It was difficult for the government to reduce taxes immediately because of the post-war re-establishment which had to be made. There was also the matter of the veterans' pensions. An uncertain period had to be faced.
The Budget-Mr. Marquis
Nevertheless in order to increase the hopes and courage of our people and to allow them to face the post-war period, in 1945 the government reduced taxes by $300 million.
In 1946, as rapidly as demobilization was proceeding, taxes were again reduced by $266 million. By 1947, when demobilization was completed, war industry was practically reconverted to peacetime activity and the government then reduced taxes by $265 million. The year 1948 marked what I might call the end of the war period, but the government felt bound to ask the Canadian taxpayers to accept for one more year pretty heavy taxes, so that it might draw up a plan for the future. However, it still reduced taxes by $92 million. This year the government keeps up its policy of the last few years by granting a tax reduction amounting to $369 million. No election was in the offing in 1945 when the government abolished taxes which were yielding $300 million. An election had just been held, and we had been victorious.
In 1946, there was no talk of elections. With respect to tax reductions, this budget compares favourably with those of 1945, 1946 and 1947. Moreover, Mr. Speaker, it is fitting to point out to the members of the opposition that last year the government lowered the tax rate on estates under $50,000. The government has always concerned itself with protecting the small taxpayer. This year, the budget favours those in the lower income bracket. The government has also reduced taxes levied against corporations with an income of less than $10,000.
The hon. member for Muskoka-Ontario (Mr. Macdonnell), however, has not seen fit to mention these tax cuts that relieve the small taxpayer.
Reducing the debt by $1,625 million since the war means $625 per family of three children; 771,000 persons are now exempt from taxation while 2,750,000 benefit from tax reductions.
Exemptions granted small industries mean that 30,000 out of 40,000 will obtain reductions. The opposition's financial critic did not mention those facts this afternoon.
Mr. Speaker, I notice my time is drawing to an end. I would like to bring to the attention of my colleagues the situation-


Mr. Speaker:: I am sorry to interrupt the hon. member, but I must inform him that his time is up.
2218	HOUSE OF
The Budget-Mr. J. A. Ross


Eugène Marquis: May I have two minutes?


Gordon Graydon: Go ahead. Go ahead.


Mr. Viau:: That is right.


Eugène Marquis: Mr. Speaker, even though at the present time I consider the government's fiscal policy to be a guarantee for the future of this country, I feel that what is more important is the moral well-being of the nation and those principles which must guide the conduct of each and every one of us in public life. I think it is fitting to ask every member here, whatever his political affiliation, not to make a political football of those principles which must direct us, the principles of unity, of love for our country, of faith in our country's capacity to combat subversive doctrines.
I urge my colleagues, should an election be held this year or next year, not to make a political ladder out of the question of communism. Let us not forget that we are entrusted with the responsibility of representing, not only the workers, but all the citizens, all the heads of families, the Christians of this country. To make communism a political weapon is to tear ourselves asunder, to destroy ourselves, to prevent ourselves from reaching our goal. But if we unite to discuss the various political problems, from an economic viewpoint, if we adhere to the leading principles which would make of our nation a Christian nation, faithful, united, well then, Mr. Speaker, I am convinced that the purpose of the North Atlantic pact will be achieved and that Canada will live in peace with the other nations. And should the world revolutionary elements attack us-which God forbid-we shall through courage, strength and the help of God win victory, peace and security.
(Text):


James Arthur Ross: Mr. Speaker, may I first of all compliment the Minister of Finance (Mr. Abbott) upon the presentation of his sundown budget of March 22, which he delivered in splendid fashion at that time.
First of all I should like to make mention of the fitting ceremonies which I believe are to take place tomorrow both in Newfoundland and in this capital city, welcoming Newfoundland as the tenth province of this great nation. Tomorrow will be the first day of April, and also the first day in the history of an even greater Canada.
In this connection I should like to read a telegram received yesterday from a gentleman of the cloth in my constituency. This telegram, dated at Lyleton, states:
Lyleton churches, schools, women's institutes, etc. wish you convey to Newfoundland representatives the sincerest good wishes of southwestern Manitoba


trusting increased prosperity for our new sister and for enlarged Canada more influence in promoting world peace. Sunday we sing God Guard Thee Newfoundland, as Newfoundland sings O Canada. If no Newfoundlanders at Ottawa please forward to St. John's.
W. D. Bayley, Minister
That, it seems to me, manifests the spirit among the people of this nation, particularly those from the far-flung prairies, situated so far from the new sister province to become part of this great nation tomorrow. I am sure the ceremonies will be fitting to the occasion, and I add my word of congratulation at this moment.
May I also endorse what was said by my colleague the hon. member for Dufferin-Simcoe (Mr. Rowe) when he spoke in this debate this evening. I, too, think it is most important that our Prime Minister attend the conference of commonwealth prime ministers to be held in Great Britain during the latter part of April. This is even more true when, as has been pointed out during this session, we have lost many markets in the United Kingdom for our agricultural products, and other markets are becoming more precarious every day.
Certainly I am sure every agricultural producer in Canada would wish that the Prime Minister would be able to attend the conference in person so that he might put in his word, and find out what we may expect to happen in connection with future markets for the products of this country, particularly agricultural products. I do not think there was ever a time in our history when it was more important that the Prime Minister should personally attend a conference than that he should delegate one of his ministers, particularly a junior minister.
In presenting his budget the Minister of Finance (Mr. Abbott) has certainly demonstrated not only that large tax cuts were possible but that they could have been made progressively in substantial amounts for the last three years without damaging his debt reduction program. Income tax exemptions and various tax reductions were not in the true sense reductions, but were in fact refunds of unnecessary revenues collected from the people in the three years I have mentioned. These reductions were not the result of government savings, as the people realize today. They represent surpluses the government has been collecting over and above its reasonable and justifiable needs. The reductions are made at a time when expenditures are being increased daily. They do not represent any effort on the part of the administration to economize or to return to peacetime efficiency. The public are reasonably charitable towards governments during wartime. They realize that much

must be done in a hurry. However, we have now reached a time almost tour years after the conclusion of the war. This year the Minister of Finance has a surplus of $575 million; last year it was $670 million and the year before $373 million. Thus in three years the federal government through taxation has taken from the public a total of $1,618 million more than it needed.
In 1946-47 the minister should have made tax reductions he is now making, and had he done so he could still have had a surplus of $5 million. In 1947-48 he could have made the reductions he now makes and have had a surplus of $302 million; and in 1948-49 he could have made the tax reductions he now makes and have had a surplus of $203 million.
The funded debt of Canada now stands at a total of $15,600 million, and the debt interest of 1946 was $464 million. In 1947-48 it was $455 million and in 1948-49 it was $463 million. The figure for the last year is of course an estimate. Thus the interest on the debt which we pay this year is $8 million greater than what we paid a year ago.
A year ago the minister made a great deal of the necessity for cyclical budgeting, and at that time went to great lengths to prove just how necessary it was. All that has now been disregarded and thrown to the winds. As was so well said by the hon. member for Muskoka-Ontario (Mr. Macdonnell), it has been clear throughout the last year that this was not an economic cycle at all, but that it was a political cycle, something which is so evident on all sides throughout the country today.
As the hon. member for Muskoka-Ontario pointed out, the Minister of Finance was prepared to produce a lemon in 1948 in order to cut a melon in 1949. That was pointed out as likely to happen long months before the budget was presented.
A great majority of the citizens of Canada are not in the income tax brackets. That has already been pointed out in the debate, and the subject was dealt with at considerable length by the hon. member for Kamouraska (Mr. Marquis), who has just taken his seat. He pointed out that he is a farmer; he says he was raised on a farm and spent his life there, and that he sees in the budget assistance for the farmers. The hon. member did make reference to the exemptions for both farmers and members of their families. In one respect I would offer my thanks to the government for the announcement made today; because every year since I have been a member in the house hon. members of this party, including myself, have asked for greater consideration in the matter of exemptions for farmers' wives and members of their families who actually performed productive
The Budget-Mr. J. A. Ross work on the farms. In answer to the hon. member for Lake Centre (Mr. Diefenbaker) the Minister of National Revenue (Mr. McCann) did say today that it is now possible to pay one of the younger members of a family up to $400 for production work, and still show that child as a dependent for exemption purposes.


Douglas Charles Abbott: That has always been the case.


James Arthur Ross: Since when?


Douglas Charles Abbott: Even since the income tax has been in force.


James Arthur Ross: If it has always been the case, then many inspectors in the country have not allowed it. I know personally that that is the case. It certainly was never publicized until it appeared in the Rural Co-operator the other day as a result of one of these farm forums. I imagine that few hon. members knew it before. I do know that it was not allowed by many inspectors of the department. If the minister wishes to challenge that statement he will have to produce better proof.


Douglas Charles Abbott: It has been allowed to anybody who claimed it.


James Arthur Ross: It has not been allowed to anybody who claimed it. I know personally that it has not been allowed. I know something about the feelings of the farmers in regard to income tax. My trading centre is a town of only 800 people and there were four of these inspectors living there at one time last summer checking up farmers' income tax returns. A member of parliament hears a great deal about grievances when you have a set-up such as that.
I respect the opinions of other hon. members even though I do not agree with them, but I do not think there is a great deal in this budget for the farmers of this country. Like the previous speaker, I have spent most of my life on a farm, having been raised on one.
I have said already that the majority of Canadian citizens, even with the present budget, do not find themselves in the income tax brackets. The retention of the eight per cent sales tax is a serious black mark against this budget because that tax affects every consumer in Canada. The farmer with the large family referred to by the hon. member for Kamouraska is affected to a greater degree when purchasing the essentials of life, both in food and in clothing, than is the farmer without a family. It is a hardship and it certainly has added greatly to the cost of living.
This sales tax of eight per cent is imposed on many manufactured and processed articles,

The Budget-Mr. J. A. Ross and it is pyramided on the markup in every transaction between the manufacturer or the processor and the ultimate consumer. The result is that the ultimate tax is more costly to the consumer than the eight per cent provided for in the act.
During the course of his remarks the Minister of Finance (Mr. Abbott) referred to the further payment being made to the producers of wheat in this country. Although he did not say so, the inference could be taken that that was a gift from the treasury of this country. I want to point out that the added payment of twenty cents per bushel on wheat produced and delivered to the Canadian wheat board between August 1, 1945, and August 1, 1950, which will make the payment $1.75 per bushel basis Fort William, is simply a distribution of the producers' own money which has been accumulated from the sale of class II wheat to countries other than the United Kingdom. That is how the money that is to be distributed this spring came to be there. Here are the average prices for wheat according to the Department of Trade and Commerce:
per bushel
	OO
1948 (first 5 months)	 2.36J
At that time the Minister of Trade and Commerce (Mr. Howe) said that 95 per cent of the 1948 crop had been sold. Here is what the Canadian wheat board handled of the different crops:
bushels
1945		 237,000,000
1946		 335,000,000
1947		 270,000,000
1948	(estimated)	 320,000,000
The difference between the average prevailing price of the amount of wheat handled and the $1.75 per bushel which the farmer will receive, less any future adjustments, totals $748 million. That is the amount of money the wheat producers of Canada will be out less any future adjustments that may be made by the Department of Trade and Commerce. If the producers had received the prevailing prices during the first four years of the pool, and if the 1949 crop is 300 million bushels- that would be more than the average for the past four years-the farmers could afford to give away their entire 1949 crop and be $273 million better off.
I put these figures on the record because in announcing the payment the Minister of Trade and Commerce said that it was well known that the Canadian wheat farmer would receive more money than the farmer in any other part of the world. There was some comment in a Winnipeg paper wondering what the minister meant by that statement,

and they said that probably he was referring to the average for that pooling period. That is the situation as of today. It has been a costly business for the wheat producers of this country.
I know that the wheat situation and the United Kingdom wheat deal have been discussed at different times in this house. I remember the hon. member for Provencher (Mr. Jutras) discussing the stand I took at the party convention last fall. I happen to have in my file a Free Press which contains headlines on the front page expressing wonder why the delegates to the national Liberal convention held in this city last summer were not allowed to discuss this wheat deal. It never came up on the floor of the convention. I am sure that if it had been the satisfactory deal that some members of the government would like the people of this nation to think it is, it would certainly have been discussed with some gusto at that national gathering of Liberals last summer. No reference was made to it at that time.
This matter affects the prosperity of every individual within Canada, more especially those living in the prairie provinces. I care not what their occupation may be, whether they are school teachers, bankers, garage men, merchants or whatever it may be, either directly or indirectly they are servicing the agricultural industry which produces so much of the essential food for mankind. This is particularly true of the residents of the prairie provinces, no matter what their occupation may be. Therefore most of these people do have a grievance in connection with this matter.
On several occasions during this session the Minister of Agriculture (Mr. Gardiner) has discussed the production of rye and he stated that he was the culprit in connection with the handling of it.


An hon. Member:: Wet or dry?


James Arthur Ross: This is the cereal; it is not processed yet. The minister pointed out the varying prices that had prevailed. While I probably should not be speaking personally,
I do know something about the production of rye. Ever since I started farming for myself in 1920 I have missed only one year when I did not have some winter rye. I am sure the Minister of Agriculture will agree that it does fit into a diversified farming program. I have grown it for early spring and late fall pasture for cattle even though I may not harvest it. But we do generally take the cattle off in May or around the first of June and harvest the crop. The average price from August, 1945, up to February of this year, which is the same as the pooling period for wheat-true enough the price was

up to $4.47-5/8 in 1948-was $2.72 per bushel. That is almost $1 a bushel more than the price of $1.75 for wheat under the pooling arrangement. May I add further that in normal years prior to the outbreak of the war, when all grain was handled on the open market, the usual prevailing price of rye was around 80 per cent or 85 per cent of the prevailing price per bushel of wheat. Year in and year out that was about the approximate comparison, and I think it is rather significant when you compare that with the handling of wheat by the agencies throughout the pooling period. While we are discussing the matter of pools, and more especially for the benefit of my good friends to the left, some of whom are always very antagonistic to the profit system-


Mr. Gillis:: Not to a reasonable profit.


James Arthur Ross: May I say that they have also advanced some rather odd ideas about cooperatives in this country. I have before me an article that appeared in the Rural Cooperator under date of February 22 of this year. The article is headed "Consider selves true capitalists". My friends to the left not only argue against profits but they are always arguing against the capitalist system. Therefore I think this article is rather interesting. It reads:
Farmer co-operatives are "off the farm" business, financed by farmers to service agriculture and to help to provide consumers with quality products at fair prices, Dr. Karl D. Butler, Washington, president of the American Institute of Co-operation, told the Ontario Association of Agricultural Societies in Toronto on February 10.
"Farmer co-operatives, as we view them in the United States, are a definite and integral part of the capitalistic system," Dr. Butler said. "Farmers are in business to feed and clothe people and it is their intention to make a living doing it," he said. "This means, in a capitalistic economy, such as we have in the United States and Canada, that they need to operate for a profit."
I think it is well that we understand that, because on the whole co-operatives render splendid service in this country.


Clarence Gillis: Who gets the profit? Not one or two people.


James Arthur Ross: The members of the cooperatives.


Clarence Gillis: Definitely.


James Arthur Ross: They profit. I shall read a little further, seeing that you are in some doubt about it.
Farmers consider themselves capitalists in the truest sense of the word, he said, and added that farmers either own land, or want to, and, in support of their co-operatives, invest in facilities to provide needed services for themselves. Both co-operatives and other business enterprises emphasize the profit
The Budget-Mr. J. A. Ross motive as the principal business incentive, Dr. Butler said. The main difference is in who profits from the operation, he added.


Some hon. Members:: Hear, hear.


James Arthur Ross: Therefore it is a capitalist system, and it is for a profit.


Mrs. Strum:: I should like to ask if the hon. gentleman will permit a question.


James Arthur Ross: Certainly.


Gladys Grace Mae Strum: Will the hon. member say that the socialist country of Great Britain has many co-operatives, or that co-operatives thrive under a socialist government?


James Arthur Ross: They certainly have plenty of co-operatives, and they have a lot of nationalization in Great Britain today, too. They are certainly having their own difficulties over there.


John Thomas Hackett: We have been feeding them.


James Arthur Ross: We have been making a great contribution through our co-operatives in Canada, a contribution which I do not believe the hon. member will tell any farm audience she believes should have been made by the farm producers of her riding in filling the United Kingdom-Canada wheat agreement.


Gladys Grace Mae Strum: Just what do you mean by that?


James Arthur Ross: I mean exactly what I put on the record, that food producers of the country should not have been called on to make the contribution they have had to make in subsidizing the consumers of Great Britain and of Canada.


Gladys Grace Mae Strum: What does that include?


James Arthur Ross: The hon. member will have an opportunity to make her own speech. I am not going to be able to complete my forty minutes before adjournment this evening if there are any more interruptions, so I will proceed. If I have any time left I will endeavour to answer any question that the hon. member may put to me, or I may even visit her in her own riding this summer.


Gladys Grace Mae Strum: I will handle you the way I handled Perley.


James Arthur Ross: After all, I am told that the hon. member visits my riding at times. The gentleman to whom she referred has passed on, I am sorry to say, but I expect to be very much alive when she comes around to visit me this summer.


An hon. Member:: There is a gentleman.


James Arthur Ross: The hon. member
brought up the question. Earlier this evening some of the socialist members said that
2222	HOUSE OF
The Budget-Mr. J. A. Ross any member who spoke in the house spoke for his party. That being the case, I remember a speech made in the last session of this parliament, which can be found at page 1621 of Hansard for 1948. The hon. member for Prince Albert (Mr. Bowerman) said then:
We are driven to this conclusion-the only thing that will solve our present social and economic problems is absolute Christian socialization of the means of production and distribution of all the necessities of life.


Gordon Graydon: Does that include the farmers?


Mr. Bowerman:: That would include everybody.


Gladys Grace Mae Strum: What is the hon. member quoting from?


James Arthur Ross: Hansard; I gave you the page and the date.


Gladys Grace Mae Strum: What was the hon. member quoting there?


James Arthur Ross: I have my own notes here. I do not carry Hansard around.


Stanley Howard Knowles: I do not wonder your face is red.


Arthur Leroy Smith: Your neck is red; I will tell you that right now.


Donald MacInnis: There are different kinds of red.


James Arthur Ross: I referred to the contribution that the farmers of Canada have made in providing foodstuffs both for Great Britain and for this country, and I want to add that, according to the Sanford-Evans statistical report-and they are a pretty reliable firm-for the first full calendar year following the war, 1946, United States producers received some $378 million more for an equal amount of coarse grains and livestock marketed than the price that Canadians have received during that year. That is only for one year, and is an added contribution made by the farm producers of this country on coarse grains and livestock. I think that is a very great contribution, too. As I say, that was for the full year following the completion of the war.
Whether the federal election be held in June, July, or whenever it is this summer-


Stanley Howard Knowles: Careful.


James Arthur Ross: It is not in my hands but I think I can guess the date. We know that this government has lost many of the best markets for agricultural products, and that the new incoming government will certainly inherit many real problems, especially with regard to markets, as a result of this administration.
I should like to say a few words, Mr. Speaker, protesting the proposed removal of the T.C.A. headquarters and personnel from

Winnipeg. I am sure that all members, not only from Winnipeg but from the province of Manitoba, have received wires and letters from various organizations protesting this proposed move. May I say that, with respect to geography, the future national defence of the country, and for many other reasons, Winnipeg city is the logical place for the location of the T.C.A. headquarters. Winnipeg is located approximately halfway across the southern part of Canada, and has long been recognized as the gateway between eastern and western Canada. Why it should be proposed to move the headquarters and personnel to either coast is more than I can reason out myself. I sincerely trust the authorities will give every consideration to this problem, and will retain and extend the headquarters in Winnipeg. If certain things happen a few years hence, of which we are rather fearful, I am sure the movement of the headquarters from the city of Winnipeg will be greatly regretted. Many of us have approached the minister in connection with this matter, and he has told us that it is a question of internal administration, but I do hope this government will look into it very carefully before the move is permitted. I am sure all hon. members from the province of Manitoba, irrespective of party, will support the stand I am taking, since any such move will affect many people in Winnipeg and, I think, the system from coast to coast as well. So it is an important problem.
Undoubtedly I shall support the nonconfidence amendment moved this afternoon by my colleague the hon. member for Muskoka-Ontario (Mr. Macdonnell). I have already pointed out the situation that will be inherited by the new government that will come into office after the election, as a result of the policies of this administration, irrespective of the budget we have been discussing today.
On motion of Mr. Weir the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said:	Tomorrow we shall take, first,
interim supply for Newfoundland, and then proceed with the further supplementary estimates. We hope to conclude that in the afternoon and get royal assent tomorrow evening. At seven-thirty we shall take up private and public bills until eight-thirty, and then continue with the budget debate.
Motion agreed to and the house adjourned at 10.25 p.m.

Friday, April 1, 1949